<PAGE>

--------------------------------------------------------------------------------

                       SECURITIES AND EXCHANGE COMMISSION
                              Washington D.C. 20549

                                    FORM 10-K

                ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
                       THE SECURITIES EXCHANGE ACT OF 1934

(Mark One)
[X]  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
     ACT OF 1934 for the fiscal year ended June 30, 2000.

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
     EXCHANGE ACT OF 1934 for the transition period from __________ to
     ___________.

                         Commission File Number 0-26779

                                  FTD.COM INC.
             (Exact name of registrant as specified in its charter)

             Delaware                                  36-4294509
-------------------------------------    ---------------------------------------
  (State or other jurisdiction of        (I.R.S. Employer Identification Number)
   incorporation or organization)

         3113 Woodcreek Drive
       Downers Grove, Illinois                          60515
---------------------------------------  ---------------------------------------
(Address of principal executive offices)             (Zip Code)

        Registrant's telephone number, including area code (630) 724-6200

           Securities registered pursuant to Section 12(b) of the Act:
                                      None

           Securities registered pursuant to Section 12(g) of the Act:
                 Class A Common Stock, par value $0.01 per share
                                (Title of Class)

         Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months and (2) has been subject to such filing
requirements for the past 90 days. Yes [X] No [ ]

         Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [ ]

         The aggregate market value of the registrant's Class A Common Stock,
par value $0.01 per share, held by non-affiliates of the registrant as of
August 15, 2000 was $15,841,667. As of August 15, 2000, the number of
outstanding shares of Class A common stock, par value $0.01 per share, of the
registrant was 8,259,614 and the number of outstanding shares of Class B
common stock, par value $0.01 per share, of the registrant was 40,395,000.

                      DOCUMENTS INCORPORATED BY REFERENCE:

Proxy Statement (to be filed) accompanying the notice of the annual meeting of
FTD.COM INC.'s stockholders to be held on November 14, 2000 (Part III hereof).


<PAGE>

                                     PART I

ITEM 1.  BUSINESS

GENERAL

         FTD.COM INC. ("the Company" or "FTD.COM") is an Internet and
telephone marketer of flowers and specialty gifts, which began selling
products directly to consumers through the 1-800-SEND-FTD toll-free telephone
number in 1993 and electronically to consumers through the WWW.FTD.COM Web
site in 1994. The Company offers same-day delivery of floral orders to nearly
100% of the U.S. population. The majority of floral orders are fulfilled by a
group of independent FTD florists who adhere to FTD.COM's quality and service
standards. The Company offers over 400 floral arrangements and over 600
specialty gift items, including gourmet gift baskets, holiday gift sets, bath
and beauty products, garden products and stuffed animals. Product offerings
are available at prices ranging from $17.99 to over $200.00.

         The Company is a majority-owned subsidiary of Florists' Transworld
Delivery, Inc. ("FTDI"). FTDI is a wholly-owned subsidiary of IOS BRANDS
Corporation ("IOS"), formerly known as FTD Corporation. The Company was
incorporated as a Delaware corporation on May 19, 1999 and at such time began to
retain its own earnings. In consideration for the receipt of 40,920,000 shares
of Class B common stock (as adjusted to reflect a 12-for-1 stock split on July
30, 1999), FTDI contributed to the Company the assets and liabilities relating
to the consumer floral order and specialty gift product business.

FORWARD-LOOKING STATEMENTS

         This annual report on Form 10-K contains certain "forward-looking
statements" within the meaning of the Private Securities Litigation Reform
Act of 1995. These forward-looking statements reflect the Company's
expectations regarding its results of operations, performance and business
prospects and opportunities. Words such as "anticipates," "believes,"
"plans," "expects," "estimates" and similar expressions to identify these
forward-looking statements, but are not the exclusive means of identifying
these statements. The forward-looking statements reflect the Company's
current beliefs and expectations and are based on currently available
information. Accordingly, these statements are subject to various risks,
uncertainties and other factors that could cause the Company's actual results
of operations, performance, business prospects and liquidity to differ from
those expressed in, or implied by, these forward-looking statements. Actual
results of operations, performance, business prospects and liquidity could
differ materially from those expressed in, or implied by, these
forward-looking statements as a result of the success of FTD.COM's marketing
campaign; 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; actual growth
rates for the markets in which the Company competes compared with forecasted
growth rates; the Company's ability to meet its liquidity requirements from
currently available sources of liquidity; the availability of additional
liquidity, if needed; the Company's ability to increase capacity and
introduce enhancements to its Web site; and the existence of system failures.
Additional risks, uncertainties and other factors are described in the
Company's Registration Statement on Form S-1, as amended (File No.
333-78857), under the caption "Risk Factors." The Company makes no commitment
to disclose any revisions to any forward-looking statements to reflect events
or circumstances after the date of this document that may bear upon the
forward-looking statements.

PRODUCT OFFERINGS

         The Company sells both floral arrangements designed by FTDI as well as
traditional floral arrangements that are chosen by the customer. Specialty gifts
include a wide variety of products including gourmet gift baskets, holiday gift
sets, bath and beauty products, garden products and stuffed animals. These
products are available at a wide range of price points. The following table
illustrates a sample of current product offerings.

<TABLE>
<CAPTION>

  PRODUCT TYPE                     PRODUCT EXAMPLES                                           RETAIL PRICE RANGE
  ------------                     ----------------                                           -----------------------
  <S>                              <C>                                                        <C>
  FTD Branded Products             FTD-Registered Trademark- Anniversary Bouquet              $24.99 to $99.99
                                   FTD-Registered Trademark- Thanks a Bunch-Registered Trademark- Bouquet
                                   FTD-Registered Trademark- Birthday Party-Registered Trademark- Bouquet
                                   FTD-Registered Trademark- Winnie The Pooh-Registered Trademark- Bouquets  (licensed)
                                   FTD-Registered Trademark- M&M's-Registered Trademark- Character Bouquets  (licensed)
                                   FTD-Registered Trademark- Mickey Mouse-Registered Trademark- Bouquets  (licensed)

  Traditional Floral Arrangements  Roses and other mixed flower bouquets                      $29.99 to over $200.00

  Specialty Gifts                  Hickory Farms-Registered Trademark- Products               $17.99 to over $200.00
                                   NFL-Registered Trademark- , MLB-Registered Trademark-,
                                   NASCAR-Registered Trademark- and
                                   NCAA-Registered Trademark- Gift Baskets
                                   Crabtree & Evelyn-Registered Trademark- Products
                                   Build-A-Bear Workshop-TM- Teddy Bears
                                   Blooming Cookies-TM-
                                   Oneophilia Wine Accessories
</TABLE>


                                       1

<PAGE>

         FTD BRANDED PRODUCTS. Each year, FTD designs floral and specialty gift
products for significant occasions, such as birthdays, anniversaries and major
holidays, including the most popular floral holidays of Valentine's Day, Easter,
Mother's Day, Thanksgiving and Christmas. The Company typically offers
approximately 15 special occasion products at any one time. FTD also seeks to
enter into licensing arrangements with other popular consumer brands with the
goal of developing new and innovative products. In this regard, FTDI has
developed relationships with companies that have well-recognized brand names,
such as The Walt Disney Company and M&M/Mars, Inc. The Company typically offers
four to six products in this category throughout the year and frequently
introduces new products for specific holidays.

         TRADITIONAL FLORAL ARRANGEMENTS. Consumers can also purchase
traditional floral arrangements, such as roses and mixed flower bouquets. The
Company typically offers over 400 products in this category throughout the year.

         SPECIALTY GIFTS. The Company also offers specialty gift products in
key categories such as plush toys, gourmet gift baskets, bath and beauty
products, garden products and stuffed animals. Included in these specialty
gifts are products from leading brands, such as Hickory Farms-Registered
Trademark- , NFL-Registered Trademark- , MLB-Registered Trademark-,
NASCAR-Registered Trademark- and Crabtree & Evelyn-Registered Trademark- .
The Company offers over 600 products in this category throughout the year.
These products are shipped directly from the vendor's manufacturing
facilities or a third party distributor to the consumer.

TRANSACTION EXECUTION

         The execution of an order consists of the following steps:

         ORDER PLACEMENT

         -    INTERNET ORDERS - Once a customer has selected a product, the Web
              site prompts the customer to enter a credit card number and
              provide other relevant information, including the address of the
              recipient and any special delivery instructions. This information
              is then transmitted over the Internet to the servers that process
              the orders, including florist selection, and communicate with the
              Mercury Network, which is a scalable, redundant network that
              transmits orders and facilitates communication with and among FTD
              florists, manufacturers and third party distributors. With respect
              to the Mercury Network, the term "redundant network" means that
              several checks and balances exist to ensure that a customer's
              order is processed in a timely manner. The Mercury Network is
              owned by FTDI.

         -    TELEPHONE ORDERS - A sales representative collects the relevant
              order and credit card payment information. This information is
              then transmitted to the servers that process the orders and
              communicate with the Mercury Network, as described above.

         ORDER FULFILLMENT

         -    ORDERS FULFILLED BY FLORISTS - Orders are routed, via the Mercury
              Network, to the selected fulfilling florist. The fulfilling
              florist fills the order by delivering the floral order directly to
              the recipient.

         -    ORDERS FULFILLED BY MANUFACTURERS OR THIRD PARTY DISTRIBUTORS -
              Orders are routed via the Mercury Network or another predetermined
              method to the manufacturer or third party distributor. The
              manufacturer or third party distributor of the specialty gift
              order then sends the specialty gift order to the recipient through
              an express delivery service such as United Parcel Service or
              Federal Express. These items typically arrive in one to two
              business days depending on the delivery method chosen by the
              customer.

TRANSACTION ECONOMICS

         Orders placed through the Company's Web site or 1-800-SEND-FTD
typically are paid for using a credit card. Generally, when a customer makes
a purchase that will be fulfilled by an FTD florist, the Company processes
the order, charges the customer's credit card and transmits the order to the
Mercury Network, which is owned by FTDI. The Mercury Network then transmits
the order to the fulfilling florist. The Company recognizes 100% of the order
value as revenue and recognizes the associated costs for fulfillment and
processing services when an order is fulfilled. Processing services costs
primarily consist of fees due to FTDI for processing services and amounts due
to the third party call center that processes orders through the Company's
toll-free telephone number. In addition, the Company charges the customer a
service fee of $6.99 for floral orders placed through the Web site and $9.99
for floral orders placed through 1-800-SEND-FTD, prior to any promotional
discounts. Additionally, a commission of $5.00 is paid to the Company by FTDI
for each floral order that is cleared through the FTD Clearinghouse. Orders
that are not fulfilled by an FTD florist, such as holiday gift baskets, are
fulfilled by a manufacturer or third party distributor based on a
pre-negotiated price. The Company charges the customer shipping and handling
fees for these specialty gift product orders. Amounts charged to customers
for the product and shipping and handling are recorded as revenue while the
pre-negotiated price of the product and the costs incurred for shipping and
handling are recorded as costs of fulfillment and processing services. The
Company does not receive a commission from FTDI for these orders.

COMPETITION

         The consumer markets for flowers and specialty gifts are highly
competitive and highly fragmented. The number of e-commerce Web sites competing
for consumers' attention has increased rapidly during the past several years.
The Company competes with marketers of flowers and specialty gifts who sell
through various channels, including retail stores, the Internet, the telephone
and catalogs. The primary competitive factors in the floral and specialty gift
markets are brand recognition, trust in the


                                       2
<PAGE>

brand, Web site content and ease of use, price of products and services,
fulfillment capabilities, customer services and reliability. The Company's
principal competitor is 1-800-FLOWERS.COM, Inc.

COMPETITIVE STRENGTHS

         The Company benefits from the ability to utilize the FTD brand. The
Company believes its URL, WWW.FTD.COM, is commercially attractive and easy
to access.

         The Company believes the fulfilling florist network and its quality
control standards are significant competitive strengths. Through a network of
independent FTD florists, who fill the majority of the Company's orders, the
Company can provide same-day delivery of flowers to nearly 100% of the U.S.
population for orders received by 1:00 p.m. in the recipient's time zone. To
fulfill the customers' orders, florists must adhere to FTD.COM's quality and
service standards, including FTD.COM's 100% satisfaction guarantee.
Fulfilling florists are monitored by the Company through the use of random
test orders. Additionally, the Company continuously monitors customer
feedback to ensure customer satisfaction. Customer service is provided
through the Company's call centers as well as online.

         The Company believes the technologies integrated in the Company's
Web site aid the Company's ability to retain and analyze customer sales and
Web site activity. The Web site provides customers with a fast and convenient
way to shop. It also enables customers to obtain detailed information about
products and to be personally reminded of upcoming purchasing occasions.

SEASONALITY

         The Company's revenues and operating results may vary from quarter
to quarter due to seasonality factors. For example, revenues and operating
results tend to be lower for the quarters ending September 30 because none of
the most popular floral holidays, which include Valentine's Day, Easter,
Mother's Day, Thanksgiving and Christmas, fall within that quarter. In
addition, depending on the year, the popular floral holiday of Easter either
falls within the quarter ending March 31 or within the quarter ending June
30. As a result, comparisons of results of operations from one quarter to the
immediately preceding quarter or the same quarter of the preceding fiscal
year may be of limited relevance in evaluating the Company's historical
financial performance and predicting the Company's future performance.

MARKETING AND PROMOTION

         To date, the Company has deployed an integrated marketing campaign
utilizing a mix of offline, online and direct marketing strategies to market
its product and services and to acquire new customers and retain existing
customers. The Company also has conducted marketing campaigns targeting the
customers within the Company's proprietary database. These campaigns include
e-mail marketing, printed catalogs and other direct mail pieces. In fiscal
year 2001, the Company intends to reduce its marketing and promotions
expenditures with a marketing campaign more focused on the retention of
existing customers.

         OFFLINE ADVERTISING. The Company and FTDI utilize a wide range of
offline advertising vehicles to promote the FTD brand and the Mercury Man logo.
These include broadcast and cable television, newspaper print, magazine print,
radio and outdoor advertising.

         ONLINE ADVERTISING. The Company primarily places online advertisements
and links on high traffic shopping and search-oriented Web sites. The Company
has established an advertising presence on several high-traffic Web sites,
including Yahoo!, MSN.com and Egreetings.com.

         DIRECT MARKETING/AFFINITY PROGRAMS. Through an aggressive direct
marketing campaign, the Company has developed relationships with many
companies that have large consumer databases, including United Airlines
Mileage Plus, Netcentives and credit card issuers, such as American Express
and Discover. The Company utilizes statement inserts, e-mail and online
placements to market to these consumers and offers discounts, mileage awards
and point awards for purchases.

         CUSTOMER LOYALTY MARKETING. The Company uses its extensive database of
customer information to enhance its customer retention efforts. For example,
Internet customers can establish an account that stores an address book,
occasion reminders and billing information and review previous purchases. The
Company utilizes printed catalogs, e-mail and other direct marketing pieces to
market to these consumers.

 TECHNOLOGY AND SYSTEMS

         The Company's Internet technology utilizes FTDI's systems and
technology licensed from outside third parties, enabling the Company to offer
its customers a convenient and user-friendly online shopping experience. The
overall mix of technologies and applications utilized by the Company allows for
supporting a scalable and secure e-commerce environment.

         The Company uses server technology in a fully redundant
configuration to power its Web site. The hosting location has the ability to
handle increases in usage levels by utilizing data communication links that
can add capacity in excess of historical usage levels. The hosting of the
Company's Web site is performed by a third party vendor under an operating
service agreement. The terms of the operating service agreement provide for
variable payments, which are based on the number of completed orders, and has
a one-year term expiring December 31, 2000, with mutual renewal options.

                                       3
<PAGE>

         The Company's order processing and management system primarily is
supported by fully redundant processors, which FTDI owns. The term "redundant
processors" means there are back-up servers that remain idle or run
non-critical tasks when the system is working properly. If one of the primary
processors goes down, then a back-up processor will start-up and begin to
handle customer transactions. These processors accept and validate floral and
non-floral orders, assess product availability, handle credit card
transaction processing and automated customer communications and facilitate
florist selection. The processors then communicate the order to the florist,
third party distributor or manufacturer via the Mercury Network or another
predetermined method. If the order is sent via the Mercury Network, the
network automatically routes the order to the selected florist. The
connection at the florist's shop either electronically accepts the order,
rejects the order or does not respond. If no electronic response occurs, then
one of the Company's customer service representatives calls to alert the
selected florist of the problem. If the florist cannot immediately rectify
the problem, the order is automatically, electronically routed to another
suitable florist.

         Orders generated through 1-800-SEND-FTD are processed by call centers
operated by APAC TeleServices, Inc. and, to a lesser degree, by internal
operations. Having access to both an in-house and an independent call center
provides the Company with the flexibility to allocate calls during peak hours
and facilitate call center expansion capabilities during the holiday periods
without additional capital expenditures.

CUSTOMER SERVICE

         The Company operates an internal customer service center and outsources
part of the customer service function to APAC TeleServices, Inc., which provides
problem resolution services. Customer service personnel are responsible for
handling customer's general inquiries, order process questions and order,
shipment and payment status inquiries. In addition, the Company licenses
software that enables it to provide online, automated customer service support,
thereby reducing customer service costs.

INTELLECTUAL PROPERTY

         Much of the Company's intellectual property is licensed from third
parties, principally FTDI. These license arrangements include the Trademark
License Agreement with FTDI, pursuant to which the Company licenses the right to
use the FTD name, including the use of the FTD trademark and associated logos,
as part of the Internet domain name and the toll-free telephone number. In
addition, a substantial portion of the technology incorporated into the Web site
is based on technology licensed from the Company's third party Web site
developer, including the database and Internet server software and the
associated source code. To protect the Company's intellectual property rights,
the Company relies on a combination of copyright, trademark and trade secret
laws, confidentiality procedures, contractual provisions and agreements with
employees, customers, strategic partners and others. Additionally, the Company
depends on the third party owners of the intellectual property rights licensed
to protect those rights.

EMPLOYEES

         The Company employed 88 people as of July 31, 2000. In addition,
various employees of FTDI provide services to the Company pursuant to an
intercompany services agreement with FTDI. None of the employees is represented
by a union, and the Company considers relations with its employees to be good.

ITEM 2.  PROPERTIES

         The Company's principal offices are located at 3113 Woodcreek Drive,
Downers Grove, Illinois 60515, and have historically been shared with FTDI,
which owns the property. The Company uses a portion of this property under a
space-sharing arrangement with FTDI. The Company does not own any real estate.

ITEM 3.  LEGAL PROCEEDINGS

         The Company is not involved in any legal proceedings that management
believes would adversely affect the Company's business, results of operations or
financial condition.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

         No matters were submitted to a vote of the Company's security
holders during the fourth quarter of the fiscal year ended June 30, 2000.


                                       4

<PAGE>

ITEM 4a. EXECUTIVE OFFICERS OF THE REGISTRANT

<TABLE>
<CAPTION>

    NAME                               AGE         POSITION
    -------------------------------------------------------------------------------------------
    <S>                                <C>      <C>
    Richard C. Perry                   45       Chairman of the Board
    Michael J. Soenen                  30       President, Chief Executive Officer and Director
    Frederick K. Johnson               53       Chief Information Officer
    William J. Van Cleave              36       Vice President - Marketing
    Carrie A. Wolfe                    30       Vice President - Finance and Accounting
</TABLE>

         RICHARD C. PERRY is the President and Managing Member of Perry Capital
LLC, founded in 1998, and the President of Perry Corp., both of which are
private money management firms. He founded Perry Corp. in 1988. Mr. Perry had
been an Adjunct Associate Professor at New York University's Stern School of
Business. Mr. Perry is also a director of FTDI, IOS BRANDS Corporation, Radio &
Records, Inc. and Uniplast Industries Co. and a trustee of the Allen Stevenson
School and the National Advisory Board of Facing History and Ourselves. Mr.
Perry received a B.S. from the Wharton School of the University of Pennsylvania
in 1977 and an M.B.A. from New York University's Stern School of Business in
1980.

         MICHAEL J. SOENEN is the President and Chief Executive Officer and a
director of FTD.COM. He was Vice President -Marketing of FTDI prior to joining
FTD.COM in May 1999. From January 1997 until August 1998, he was Director of
Sales Promotion for FTDI. Mr. Soenen was an associate at Perry Corp. from August
1996 to December 1996. From July 1993 to July 1996, Mr. Soenen worked for
Salomon Brothers, Inc., an investment banking firm. Mr. Soenen received a B.A.
from Kalamazoo College in 1992.

         FREDERICK K. JOHNSON is the Chief Information Officer of FTD.COM. He
was Executive Vice President - Technology of FTDI from July 1997 to September
1999, when he joined FTD.COM. Prior to that time, Mr. Johnson was Senior Vice
President-MIS for Fabri-Centers of America, Inc., a retail chain of fabric and
craft stores that is now known as Jo-Ann Stores, Inc., for more than five years.
Mr. Johnson received a B.S. from Case Institute of Technology in 1969 and an
M.B.A. from Case Western Reserve University in 1977.

         WILLIAM J. VAN CLEAVE is Vice President - Marketing of FTD.COM. Prior
to joining the Company in August 1999, he was the Marketing Director of
americangreetings.com, the Internet marketing division of American Greetings
Corporation, from November 1995 to July 1999. American Greetings Corporation
designs, manufactures and sells seasonal greeting cards and other social
expression products. From August 1990 to October 1995, Mr. Van Cleave served in
various other capacities at American Greetings Corporation. Mr. Van Cleave
received a B.S. from Miami University in 1986 and an M.B.A. from Case Western
Reserve University in 1990.

         CARRIE A. WOLFE has served as Vice President - Finance and Accounting
of FTD.COM since July 2000. She previously served as Controller of FTD.COM.
Prior to joining the Company in November 1999, she was Director of Finance and
Director of Financial Reporting, as well as serving in various other capacities,
at Whitman Corporation, a producer and distributor of Pepsi-Cola brand products
and a variety of other non-alcoholic beverage products, from October 1995 to
November 1999. From June 1992 to September 1995, Ms. Wolfe worked in the
auditing group at Price Waterhouse, an independent public accounting firm. Ms.
Wolfe received her Bachelor of Accountancy from the University of Illinois in
1992 and is a Certified Public Accountant.


                                       5

<PAGE>

                                     PART II

ITEM 5.  MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

         The Company's Class A common stock is quoted on the NASDAQ National
Market under the symbol "EFTD." There currently is no public market for the
Company's Class B common stock, all outstanding shares of which are held by
FTDI. The holders of Class A common stock have voting rights identical to
holders of Class B common stock, except that holders of Class A common stock are
entitled to one vote per share and holders of Class B common stock are entitled
to ten votes per share. The Class B common stock is convertible into shares of
Class A common stock on a one-for-one basis at the option of the holder and
automatically converts into shares of Class A common stock on a one-for-one
basis upon any transfer to a person other than FTDI or certain of its affiliates
or successors or a strategic partner.

         The table below sets forth the high and low sales prices as reported
on the NASDAQ National Market for FTD.COM Class A common stock for each
quarterly period of fiscal year 2000, beginning with September 29, 1999, the
first day on which the Class A common stock was publicly traded. The Company
has never paid any cash dividends on its capital stock and intends to retain
all of its earnings to finance its operations. The Company may incur
indebtedness in the future that may prohibit or effectively restrict the
payment of cash dividends.

<TABLE>
<CAPTION>

-----------------------------------------------------------------------------------
                                                            High            Low
-----------------------------------------------------------------------------------
<S>                                                      <C>              <C>
2000:
-----------------------------------------------------------------------------------
1st quarter  (September 29 and September 30)             $ 12.5625        $ 7.8750
-----------------------------------------------------------------------------------
2nd quarter                                               $ 8.8750        $ 4.5000
-----------------------------------------------------------------------------------
3rd quarter                                               $ 6.0625        $ 2.8750
-----------------------------------------------------------------------------------
4th quarter                                               $ 3.5000        $ 1.7500
-----------------------------------------------------------------------------------
</TABLE>

         There were 45 stockholders of record at July 31, 2000, excluding
beneficial owners of shares registered in nominee or street name.

CHANGES IN SECURITIES AND USE OF PROCEEDS

         On September 28, 1999, the Securities and Exchange Commission declared
effective the Company's Registration Statement on Form S-1, as amended (File No.
333-78857), relating to the Company's initial public offering ("IPO") of
4,995,000 shares of Class A common stock, 495,000 shares of which were issued on
October 8, 1999 upon the exercise on October 6, 1999 of an option to purchase
additional shares that the Company granted to the underwriters of the offering.
In connection with the offering, the Company registered the Class A common stock
under the Securities Exchange Act of 1934.

         The IPO resulted in gross proceeds of approximately $40.0 million, of
which approximately $2.8 million was applied to the underwriting discount and
approximately $2.0 million was applied to related expenses. As a result, net
proceeds of the offering to the Company were approximately $35.2 million.

         The Company did not make, in connection with the offering and sale of
the Class A common stock, any direct or indirect payments to directors or
officers of the Company or, to the Company's knowledge, their associates,
persons owning 10% or more of any class of equity securities of the Company or
affiliates of the Company.

         From the date of the closing of the IPO through June 30, 2000, the
Company has utilized the proceeds as follows:

-        $26.4 million to fund advertising, promotion and other marketing
         activities; and
-        $3.7 million for capital expenditures, including technology and
         physical infrastructure.

Unused proceeds of the offering are currently invested in a highly liquid
portfolio of U.S. government securities.

         As of June 30, 2000, the Company has commitments for future
expenditures for a portion of the remaining net proceeds of the IPO related to
Internet distribution agreements. The Company has not made any other specific
expenditure plans with respect to the remaining proceeds of this offering. While
the Company cannot specify with certainty the particular uses for such proceeds,
the Company currently intends to use the remaining proceeds over time:

-        to fund additional advertising, promotion and other marketing
         activities;
-        to enhance its infrastructure;
-        to enter into strategic relationships;
-        to expand its product offerings; and
-        to fund other general corporate purposes.


                                       6

<PAGE>

ITEM 6.  SELECTED FINANCIAL DATA

         FTD.COM was incorporated in May 1999 to own and operate the Internet
and telephone floral and specialty gift business of FTDI. The telephone business
was previously operated by FTD Direct Access, Inc., a wholly-owned subsidiary of
Florists' Transworld Delivery Association, which was acquired by IOS on December
18, 1994. FTD Direct Access, Inc., continued to operate this business as a
wholly-owned subsidiary of FTDI until May 31, 1995 when FTD Direct Access, Inc.
was dissolved and the results of its operations and its financial position were
subsequently accounted for as the consumer floral order business unit of FTDI.

         The following table sets forth selected historical data for the 1996
through 1999 fiscal years for FTDI's consumer floral order business unit and for
the 2000 fiscal year for FTD.COM. Although FTD.COM was not formed as a
subsidiary until May 1999, the financial statements present the operations of
the businesses owned and operated by FTD.COM as if it had been a separate entity
since July 1, 1995. The financial data is qualified by reference to, and should
be read in conjunction with, FTD.COM's financial statements and the notes to
those statements and "Management's Discussion and Analysis of Financial
Condition and Results of Operations" appearing elsewhere in this Form 10-K.



                                       7

<PAGE>

<TABLE>
<CAPTION>

                                                                            Year ended June 30,
                                                ----------------------------------------------------------------------------
                                                   2000             1999            1998            1997           1996
                                                ------------    -------------    ------------   -------------   ------------
                                                                   (in thousands, except per share data)
<S>                                                <C>              <C>             <C>             <C>            <C>
STATEMENT OF OPERATIONS:
Order revenues and service fees, net of
  discounts                                        $ 87,586         $ 45,212        $ 30,423        $ 26,230       $ 18,490
Commissions from FTDI                                 7,245            4,148              --              --             --
Other, principally from FTDI                          3,374              258             240              25             51
                                                ------------    -------------    ------------   -------------   ------------
          Total revenues                             98,205           49,618          30,663          26,255         18,541
Fulfillment and processing services                  69,925           38,848          26,324          22,283         15,431
                                                ------------    -------------    ------------   -------------   ------------
Gross profit                                         28,280           10,770           4,339           3,972          3,110

Operating expenses:
     Marketing and promotion                         42,901 (a)       11,991           5,995           4,864          4,188
     Technology development                          11,840 (b)        2,156           1,420           1,546          1,251
     General and administrative                       9,750            4,983           3,239           3,267          2,955
                                                ------------    -------------    ------------   -------------   ------------
          Total operating expenses                   64,491           19,130          10,654           9,677          8,394
                                                ------------    -------------    ------------   -------------   ------------

Loss from operations                                (36,211)          (8,360)         (6,315)         (5,705)        (5,284)
Interest income/(expense)                             1,609             (142)           (177)           (267)          (226)
                                                ------------    -------------    ------------   -------------   ------------

Loss before income taxes                            (34,602)          (8,502)         (6,492)         (5,972)        (5,510)
Income tax benefit                                       --            3,055           2,597           2,389          2,204
                                                ------------    -------------    ------------   -------------   ------------

Net loss                                            (34,602)          (5,447)         (3,895)         (3,583)        (3,306)
Dividends on preferred stock                             --               74              --              --             --
                                                ------------    -------------    ------------   -------------   ------------
Net loss available to common stockholders        $  (34,602)        $ (5,521)       $ (3,895)       $ (3,583)      $ (3,306)
                                                ============    =============    ============   =============   ============

Basic and diluted net loss per share             $    (0.75)        $  (0.13)
                                                ============    =============
Weighted average basic and diluted
        common shares outstanding                    45,879           40,920 (c)
                                                ============    =============

SELECTED STATEMENT OF OPERATIONS PERCENTAGES:
Total revenues                                        100.0%           100.0%          100.0%          100.0%         100.0%
Gross profit                                           28.8             21.7            14.2            15.1            16.8
Marketing and promotion                                43.7             24.2            19.6            18.5            22.6
Technology and development                             12.1              4.3             4.6             5.9             6.7
General and administrative                              9.9             10.0            10.6            12.4            15.9

BALANCE SHEET DATA:                                                                                             (UNAUDITED)
Total assets                                       $ 19,219         $ 11,422        $  2,212         $   247        $   148
Total liabilities                                    10,447           12,327           2,363           2,265          1,719
Stockholders' equity (deficit)                        8,772             (905)           (151)         (2,018)        (1,571)
</TABLE>

(a)  In the fourth quarter of fiscal 2000, the Company terminated one of its
     Internet portal distribution agreements. In conjunction with this
     termination, the Company recorded a $2.3 million one-time charge, reflected
     in marketing and promotion expenses.

(b)  In the fourth quarter of fiscal 2000, the Company recorded a one-time
     non-cash $4.4 million charge, reflected in technology development expenses,
     associated with the write-off of development work related to a new version
     of its Web site.

(c)  The 1999 pro forma weighted average basic and diluted common shares
     outstanding consist of 40,920,000 shares of common stock issued in
     conjunction with the incorporation of the Company on May 19, 1999,
     retroactively adjusted to reflect the 12-for-1 split of the FTD.COM
     Class B common stock discussed in Note 5 of the notes to the financial
     statements.


                                       8

<PAGE>

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS.

       The following discussion should be read in conjunction with the
financial statements and the notes to those statements that appear elsewhere
in this Form 10-K. The following discussion contains forward-looking
statements that reflect the Company's plans, estimates and beliefs. The
Company's actual results could differ from those discussed in the
forward-looking statements. Factors that could cause or contribute to any
differences include, but are not limited to, those discussed in Item 1 of
this Form 10-K under the caption "Forward-looking statements" and elsewhere
in this Form 10-K.

OVERVIEW

       FTD.COM is an Internet and telephone marketer of flowers and specialty
gifts, which began selling products directly to consumers through the
1-800-SEND-FTD toll-free telephone number in 1993 and electronically to
consumers through the WWW.FTD.COM Web site in 1994. The Company offers
same-day delivery of floral orders to nearly 100% of the U.S. population. The
Company is a majority-owned subsidiary of FTDI. FTDI is a wholly-owned
subsidiary of IOS, formerly known as FTD Corporation. In connection with the
Company's formation in May 1999, FTDI contributed to the Company the assets
and liabilities relating to the consumer floral order and specialty gift
product business in exchange for consideration consisting of shares of the
Company's Class B common stock.

       The financial statements for fiscal years prior to the fiscal year
ended June 30, 2000 have been prepared as if the Company operated as a
stand-alone entity since the inception of its business. The financial
information prior to the fiscal year ended June 30, 2000 may not necessarily
reflect the financial position, results of operations or cash flows of the
Company in the future or what the financial position, result of operations or
cash flows of the Company would have been if it had been a separate,
stand-alone, publicly-held corporation during the periods presented.

       In view of the rapidly changing nature of the Company's business, the
limited operating history and the seasonality of the business, the Company
believes that comparisons of operating results for any period with those of
the preceding period or the same period of the preceding year are not
necessarily meaningful and should not be relied upon as an indication of
future performance. Revenues and operating results may vary from quarter to
quarter due to a number of factors, some of which are beyond the Company's
control. This fluctuation is primarily attributable to increased sales and
advertising expenditures during the popular floral holiday seasons in the
fiscal quarters ending March 31, June 30 and December 31.

       Product inventory is maintained by the Company's fulfilling florists
and other third party manufacturers or distributors. As a result, the Company
offers a large selection of merchandise without the investment in inventory,
the ongoing expense related to the management of that inventory or the risk
of product obsolescence or spoilage.

       Orders placed through the Company's Web site or 1-800-SEND-FTD
typically are paid for using a credit card. Generally, when a customer makes
a purchase that will be fulfilled by an FTD florist, the Company processes
the order, charges the customer's credit card and transmits the order to the
Mercury Network, which is owned by FTDI. The Mercury Network then transmits
the order to the fulfilling florist. The Company recognizes 100% of the order
value as revenue and recognizes the associated costs for fulfillment and
processing services when the order is fulfilled. Processing services costs
primarily consist of fees due to FTDI for processing services and amounts due
to the third party call center that processes orders through the Company's
toll-free telephone number. In addition, the Company charges the customer a
service fee for all floral orders. The service fee for floral orders placed
over the Internet is $6.99 and the service fee for floral orders placed over
the telephone is $9.99, prior to any promotional discounts. Orders that are
not fulfilled by an FTD florist, such as holiday gift baskets, are fulfilled
by a manufacturer or third party distributor based on a pre-negotiated price.
The Company charges the customer shipping and handling fees for these
specialty gift product orders. Amounts charged to the customer for the product
and shipping and handling are recorded as revenue while the pre-negotiated
price of the product and the costs incurred for shipping and handling are
recorded as costs of fulfillment and processing services. Order revenues and
service fees are reported net of discounts.

       Commission revenues represent a $5.00 commission paid to the Company
by FTDI for each floral order that the Company clears through the FTD
Clearinghouse, pursuant to an incentive program in effect from July 1998
through September 1999 and a commission agreement in effect since October
1999, which expires on June 30, 2002. FTDI is under no obligation to pay
these commissions once the agreement expires.

       Marketing and promotion expenses primarily consist of costs related to
a marketing campaign utilizing a mix of offline, online and direct marketing
strategies to market the Company's product and services and to acquire new
customers and retain existing customers. Marketing and promotion expenses are
charged to expense as incurred and consist of allocations from FTDI in fiscal
years 1999 and 1998. Pursuant to the Intercompany Services Agreement,
effective as of June 1, 1999, FTDI no longer charges any of its marketing and
promotion costs to the Company. In fiscal year 2001, the Company intends to
reduce its marketing and promotions expenditures with a marketing campaign
more focused on the retention of existing customers.

       Technology development expenses consist of hosting fees,
non-capitalizable costs related to Web site development and, more
significantly in relation to total technology development expenses in fiscal
years prior to fiscal 2000, allocated technology costs from FTDI related to
shared systems and personnel.

       General and administrative expenses primarily consist of direct
corporate expenses; customer service costs; royalty expenses paid to FTDI
pursuant to the Trademark Licensing Agreement; and amounts charged to the
Company in connection with services provided to the Company by FTDI related
to the utilization of resources, including executive, accounting and

                                    9

<PAGE>

administrative personnel, space and equipment rental, facilities expenses,
recruiting expenses, professional fees and other corporate expenses,
pursuant to the Intercompany Services Agreement.

       Interest expense for periods prior to fiscal 2000 was allocated using
FTDI's weighted average interest rate applied to average stockholder's
deficit which represented FTDI's cumulative funding of the Company's cash
requirements and results of operations until the date of incorporation.

       Cumulative taxes since the acquisition of FTDA by IOS through the
Company's incorporation on May 19, 1999 have been settled through
stockholder's net deficit. For periods subsequent to the Company's
incorporation, taxes are recognized pursuant to the terms of the amended Tax
Sharing Agreement among FTDI, IOS and the Company, which provides that the
Company will pay its tax liability computed as if it were filing a separate
return. Under that agreement, IOS will refund any tax benefits attributable
to the Company, provided that the Company would have realized the benefits
had the Company filed its own Federal income tax return. At June 30, 2000,
there were no tax-related amounts due to or from IOS.

RESULTS OF OPERATIONS - YEAR ENDED JUNE 30, 2000 COMPARED TO YEAR ENDED
                        JUNE 30, 1999

TOTAL REVENUES

<TABLE>
<CAPTION>

                                                                 Year ended June 30,
                                                              ----------------------------
                                                                 2000            1999        % Change
                                                              ------------    ------------ -----------
                                                                    (in thousands)
  <S>                                                         <C>             <C>              <C>
  Order revenues and service fees, net of discounts           $  87,586       $  45,212         94%
  Commissions from FTDI                                           7,245           4,148         75%
  Other, principally from FTDI                                    3,374             258        N/A
                                                              ---------       ---------
  Total revenues                                              $  98,205       $  49,618         98%
                                                              =========       =========
</TABLE>


       Total revenues increased $48.6 million, or 98%, for the fiscal year
ended June 30, 2000 compared to the prior fiscal year. The increase was
primarily attributable to increases in order volume and average order value.

       Order revenues and service fees, net of discounts, increased $42.4
million, or 94%, for the fiscal year ended June 30, 2000 compared to the
prior fiscal year. Total order volume was 1,557,649 for the fiscal year ended
June 30, 2000, representing an 82% increase over the prior fiscal year order
volume of 856,761. The increase was primarily a result of an increase in
Internet orders of 160% over the prior fiscal year, partially offset by a
decrease in telephone orders. Internet orders were 76% of total orders for
the fiscal year ended June 30, 2000 compared to 53% for the prior fiscal
year. Average order value increased 7% for the fiscal year ended June 30,
2000 to $56.23 per order from $52.77 per order in the prior fiscal year.

       Commission revenues increased $3.1 million, or 75%, for the fiscal
year ended June 30, 2000 compared to the prior fiscal year. The increase in
commission revenues paid by FTDI to the Company was due to the increase in
order volume. Pursuant to an incentive program in effect from July 1998
through September 1999 and a commission agreement in effect since October
1999, FTDI pays the Company a $5.00 commission on every floral order that the
Company clears through the FTD Clearinghouse. Commission revenues represented
7% and 8% of total revenues for the fiscal years ended June 30, 2000 and
1999, respectively.

       Other revenues increased $3.1 million for the fiscal year ended June
30, 2000 compared to the prior fiscal year. Other revenues consist primarily
of fees paid by FTDI to the Company, effective July 1, 1999, relating to the
hosting of florists' Web sites through the WWW.FTD.COM Web site.

COST OF FULFILLMENT AND PROCESSING SERVICES

<TABLE>
<CAPTION>

                                                                 Year ended June 30,
                                                              --------------------------
                                                                 2000           1999        % Change
                                                              ------------    ----------    --------------
                                                                   (in thousands)
    <S>                                                       <C>             <C>                <C>
    Fulfillment and processing services                       $  69,925       $  38,848          80%
</TABLE>


       Cost of fulfillment and processing services increased $31.1 million,
or 80%, for the fiscal year ended June 30, 2000 compared to the prior fiscal
year. The increase in fulfillment services costs was primarily due to
increases in order volume and average order value offset by a change in the
amount paid to fulfilling florists. Gross profit margins increased to 29% for
the fiscal year ended June 30, 2000 compared to 22% for the prior fiscal
year. The increase in the gross margin percentage is primarily due to an
increase in other revenues, which have no directly associated costs, and a
change in the amount paid per order to fulfilling florists. Effective June
30, 1999, the amount paid to florists was changed to bring the Company in
line with industry standards.

                                     10

<PAGE>

MARKETING AND PROMOTIONS

<TABLE>
<CAPTION>

                                                                 Year ended June 30,
                                                              --------------------------
                                                                 2000           1999        % Change
                                                              ------------    ----------    --------------
                                                                   (in thousands)
<S>                                                           <C>             <C>           <C>
Marketing and promotions                                      $  42,901       $  11,991         258%
</TABLE>

       Excluding a $2.3 million one-time charge, marketing and promotion
expenses increased $28.6 million for the fiscal year ended June 30, 2000
compared to the prior fiscal year. The increase was primarily due to an
increase in offline and online advertising expenses focused on customer
acquisition. The $2.3 million one-time charge recorded in the fourth quarter
of the fiscal year ended June 30, 2000 was related to the termination of one
of the Company's Internet portal distribution agreements. In connection with
marketing and promotional spending, the total customer base (defined as all
persons who have purchased at least once through the WWW.FTD.COM Web site or
the 1-800-SEND-FTD telephone number) increased by 66%, or 964,071 customers,
to 2,429,533 customers as of June 30, 2000 from 1,465,462 customers as of
June 30, 1999.

TECHNOLOGY DEVELOPMENT

<TABLE>
<CAPTION>

                                                                 Year ended June 30,
                                                              --------------------------
                                                                 2000           1999        % Change
                                                              ------------    ----------    --------------
                                                                   (in thousands)
<S>                                                           <C>             <C>           <C>
Technology development                                        $  11,840       $  2,156          449%
</TABLE>

         Excluding a $4.4 million one-time charge, technology development
expenses increased $5.2 million for the fiscal year ended June 30, 2000
compared to the prior fiscal year. The increase was primarily related to
increased costs associated with the hosting of the Company's Web site due to
increased order volume and non-capitalizable costs related to the new version
of the Company's Web site. The $4.4 million one-time charge recorded in the
fourth quarter of the fiscal year ended June 30, 2000 was associated with the
write-off of development work related to a new version of the Company's Web
site.

GENERAL AND ADMINISTRATIVE

<TABLE>
<CAPTION>

                                                                 Year ended June 30,
                                                              --------------------------
                                                                 2000           1999        % Change
                                                              ------------    ----------    ----------
                                                                   (in thousands)
<S>                                                           <C>             <C>           <C>
General and administrative                                    $  9,750        $  4,983           96%
</TABLE>

         General and administrative expenses increased $4.8 million, or 96%,
for the fiscal year ended June 30, 2000 compared to the prior fiscal year.
The increase was primarily due to increased expenses related to the hiring of
additional employees in the executive, administrative and business
development areas. Additionally, customer service costs and royalty expenses
increased due to the 82% growth in order volume for the fiscal year ended
June 30, 2000 compared to the prior fiscal year.

RESULTS OF OPERATIONS - YEAR ENDED JUNE 30, 1999 COMPARED TO YEAR ENDED
                        JUNE 30, 1998

TOTAL REVENUES

<TABLE>
<CAPTION>

                                                        Year ended June 30,
                                                        ------------------
                                                           1999      1998     % Change
                                                        ---------   ------    --------
                                                          (in thousands)
<S>                                                     <C>         <C>       <C>
Order revenues and service fees, net of discounts       $ 45,212    $ 30,423      49%
Commissions from FTDI                                      4,148          --      --
Other, principally from FTDI                                 258         240       8%
                                                        --------    --------
Total revenues                                          $ 49,618    $ 30,663      62%
                                                        ========    ========
</TABLE>

         Total revenues increased $18.9 million, or 62%, for the fiscal year
ended June 30, 1999 compared to the prior fiscal year. The increase in total
revenues was attributable to an increase in the number of orders, as well as
an increase in the average order value.

         Order revenues and service fees, net of discounts, increased $14.8
million, or 49%, for the fiscal year ended June 30, 1999 compared to the
prior fiscal year. The increase from the prior year was primarily the result
of an increase in Internet order volume, as well as an increase in average
order value and service fees. During the fiscal year ended June 30, 1999, 47%
of order revenues and service fees were generated by telephone orders and 53%
by Internet orders compared to 67% by telephone orders and 33% by Internet
orders for the prior fiscal year.

         Commission revenues were $4.1 million for the fiscal year ended June
30, 1999. The Company did not generate commission revenues during the fiscal
year ended June 30, 1998. The increase from the prior year was the result of
the commencement of an incentive program effective July 1998 pursuant to
which FTDI pays FTD.COM for all floral orders cleared through the FTD
Clearinghouse. Commission revenues were 8% of total revenues for the fiscal
year ended June 30, 1999.

                                     11

<PAGE>

         Other revenues increased $18,000, or 8%, for the fiscal year ended
June 30, 1999 compared to the prior fiscal year. Other revenues were less
than 1% of total revenues for the fiscal years ended June 30, 1999 and 1998.

COST OF FULFILLMENT AND PROCESSING SERVICES

<TABLE>
<CAPTION>

                                                                 Year ended June 30,
                                                              ---------------------------
                                                                 1999            1998         % Change
                                                              ------------    -----------     ------------
                                                                    (in thousands)
<S>                                                           <C>             <C>             <C>
Fulfillment and processing services                           $  38,848       $  26,324           48%
</TABLE>

         Cost of fulfillment and processing services increased $12.5 million,
or 48%, for the fiscal year ended June 30, 1999 compared to the prior fiscal
year. The increase from the prior fiscal year was the result of increased
order volume, which was primarily attributable to the increase in Internet
sales discussed above. As a percentage of total revenues, cost of fulfillment
and processing services decreased to 78% for the fiscal year ended June 30,
1999 from 86% for the prior fiscal year. The decrease was principally due to
the increase in commission revenues for the fiscal year ended June 30, 1999.
In addition, the Company realized cost reductions that resulted from
improvements in order processing operations.

MARKETING AND PROMOTIONS

<TABLE>
<CAPTION>

                                                                 Year ended June 30,
                                                              ---------------------------
                                                                 1999            1998         % Change
                                                              ------------    -----------     ------------
                                                                    (in thousands)
<S>                                                           <C>             <C>             <C>
Marketing and promotions                                      $  11,991       $  5,995           100%
</TABLE>

         Marketing and promotion expenses increased $6.0 million, or 100%,
for the fiscal year ended June 30, 1999 compared to the prior fiscal year.
The increase was primarily due to an increase in Internet advertising,
promotion and customer acquisition marketing.

TECHNOLOGY DEVELOPMENT

<TABLE>
<CAPTION>

                                                                 Year ended June 30,
                                                              --------------------------
                                                                 1999           1998        % Change
                                                              ------------    ----------    --------------
                                                                   (in thousands)
<S>                                                           <C>             <C>           <C>
Technology development                                        $  2,156        $  1,420           52%
</TABLE>

         Technology development expenses increased $0.8 million, or 52%, for
the fiscal year ended June 30, 1999 compared to the prior fiscal year. The
increase was primarily due to costs related to Web site maintenance and
enhancements which were required to enable the Web site to handle the
increased volume as well as to improve the speed of order processing.

GENERAL AND ADMINISTRATIVE

<TABLE>
<CAPTION>

                                                                 Year ended June 30,
                                                              --------------------------
                                                                 1999           1998        % Change
                                                              ------------    ----------    --------------
                                                                   (in thousands)
<S>                                                           <C>             <C>           <C>
General and administrative                                    $  4,983        $  3,239           54%
</TABLE>

         General and administrative expenses increased $1.8 million, or 54%,
for the fiscal year ended June 30, 1999 compared to the prior fiscal year.
The increase was primarily due to increased expenses required to handle the
growth in Internet sales.

LIQUIDITY AND CAPITAL RESOURCES

         At June 30, 2000, the Company had cash and cash equivalents of $18.0
million, compared to $8.2 million at June 30, 1999. The Company's liquidity
requirements consist primarily of working capital needs, including marketing
and promotion expenses, and capital expenditures for software development
costs. For the fiscal year ended June 30, 2000, the Company made capital
expeditures of $3.7 million related to software development costs, of which
$3.5 million was written-off as part of the $4.4 million one-time charge
associated with the development work related to a new version of the
Company's Web site. The Company did not make any capital expenditures for the
fiscal year ended June 30, 1999. The Company has future commitments of $1.1
million related to Internet distribution agreements, as described in Note 3
of the notes to the financial statements.

         Net cash used in operating activities was $22.1 million and $4.5
million for the fiscal years ended June 30, 2000 and 1999, respectively. Net
operating cash uses were primarily attributable to net losses which were
partially offset by increases in accounts payable.

         Net cash used in investing activities was $3.7 million for the fiscal
year ended June 30, 2000. The cash used in investing activities consisted of
software development costs which were capitalized in accordance with SOP 98-1,
ACCOUNTING FOR THE COSTS OF COMPUTER SOFTWARE DEVELOPED OR OBTAINED FOR INTERNAL
USE and EITF 00-02, ACCOUNTING FOR WEB SITE DEVELOPMENT COSTS. Subsequent to
capitalization, $3.5 million of the capitalized assets were written-off as part
of the $4.4

                                     12

<PAGE>

million one-time charge in the fourth quarter of fiscal 2000, associated with
the development work related to a new version of the Company's Web site.

       Net cash provided by financing activities was $35.6 million and $12.7
million for the fiscal years ended June 30, 2000 and 1999, respectively. The
cash provided by financing activities for the fiscal year ended June 30, 2000
was the result of the net proceeds from the Company's initial public
offering, including amounts attributable to the exercise of the underwriters'
over-allotment option. During the fiscal year ended June 30, 1999, cash
provided by financing activities reflects contributions from FTDI and
proceeds from the issuance of Series A preferred stock offset by expenditures
for deferred offering expenses associated with the Company's IPO.

       In fiscal year 2001, the Company intends to reduce its marketing and
promotions expenditures with a marketing campaign more focused on the
retention of existing customers. Additionally, the Company plans to continue
to invest in expanding its product offerings and improving its Web site and
the infrastructure supporting customer service. The scope of these programs
and investments is expected to be affected in the near term by the amount of
future cash flows from operations. The Company believes that its existing
cash and future cash flows from operations will be sufficient to meet its
liquidity needs through June 30, 2001. However, any projections of future
cash inflows and outflows are subject to substantial uncertainty. In
addition, the Company, from time to time, considers acquisitions of or
investments in complementary businesses, products, services and technologies,
which may impact the Company's liquidity requirements or cause the Company to
seek to issue additional equity securities or debt financing alternatives.
Beyond June 30, 2001, the Company may need to raise additional capital to
meet its long-term liquidity needs. If the Company determines that it needs
to raise additional capital, the Company may seek to issue additional equity
or obtain debt financing from third party sources or FTDI. The sale of
additional equity or convertible debt securities could result in dilution to
the Company's stockholders. In addition, any debt financing, if available,
could involve restrictive covenants, which could adversely affect the
Company's operations. There can be no assurance that any of these financing
alternatives, including obtaining additional capital from FTDI, will be
available in amounts or on terms acceptable to the Company, if at all. If the
Company is unable to raise any needed additional capital, the Company could
be required to significantly alter its operating plan, which could have a
material adverse effect on the Company's business, financial condition and
results of operations.

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

       In December 1999, the Securities and Exchange Commission issued Staff
Accounting Bulletin ("SAB") 101, REVENUE RECOGNITION IN FINANCIAL STATEMENTS,
as amended, which summarizes the staff's views in applying generally accepted
accounting principles to revenue recognition in financial statements. SAB 101
is effective no later than the fourth quarter for fiscal years beginning
after December 15, 1999. The Company currently records revenue in accordance
with SAB 101.

       In July 2000, the Emerging Issues Task Force ("EITF") issued EITF
00-10, ACCOUNTING FOR SHIPPING AND HANDLING FEES AND COSTS. EITF 00-10
addresses the income statement classification of amounts billed to a customer
for shipping and handling costs as well as the classification of amounts
incurred for shipping and handling costs. EITF 00-10 is effective no later
than the fourth quarter for fiscal years beginning after December 15, 1999.
The Company currently classifies its shipping and handling revenues and costs
in accordance with EITF 00-10.

       In May 2000, the EITF issued EITF 00-14, ACCOUNTING FOR CERTAIN SALES
INCENTIVES. EITF 00-14 addresses the recognition, measurement, and income
statement classification of sales incentives offered by a vendor that can be
used in a single exchange transaction. EITF 00-14 is effective for fiscal
quarters beginning after December 15, 1999. The Company does not expect the
adoption of EITF 00-14 will have a material effect on its results of
operations.

       Financial Accounting Standards Board Interpretation No. 44 (FIN No.
44), ACCOUNTING FOR CERTAIN TRANSACTIONS INVOLVING STOCK COMPENSATION, an
interpretation of Accounting Principles Board Opinion No. 25, is effective
for financial statements beginning after July 1, 2000, but certain
conclusions in this interpretation cover specific events that occur after
either December 15, 1998, or January 12, 2000. The Company does not expect
the adoption of FIN No. 44 will have a material effect on its results of
operations.

ITEM 7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

         As of June 30, 2000, the Company was not party to any significant
financing arrangements. The Company maintains a portfolio of highly liquid
investments in U.S. government securities, which are classified as cash
equivalents. Given the short-term nature of these investments, the Company
believes it is not subject to any significant interest rate risk.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

       See Index to Financial Information on page F-1.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
   FINANCIAL DISCLOSURE

         None.

                                     13

<PAGE>

                                    PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

       Information regarding directors of the Company will be set forth under
the caption "Election of Directors" in the Company's proxy statement related
to the Company's 2000 annual meeting of stockholders (the "Proxy Statement")
and is incorporated herein by reference. Information regarding executive
officers of the Company is included as Item 4A of Part I as permitted by
Instruction 3 to Item 401(b) of Regulation S-K. Information required by Item
405 of Regulation S-K will be set forth under the caption "Section 16(a)
Beneficial Ownership Reporting Compliance" in the Proxy Statement and is
incorporated herein by reference.

ITEM 11.  EXECUTIVE COMPENSATION

       Information required by this item will be set forth under the caption
"Executive Compensation" in the Proxy Statement and, except for the
information under the captions "Executive Compensation - Compensation
Committee Report on Executive Compensation" and "Executive Compensation -
Performance Graph," is incorporated herein by reference.

ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

       Information required by this item will be set forth under the caption
"Security Ownership of Certain Beneficial Owners and Management" in the Proxy
Statement and is incorporated herein by reference.

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

       Information regarding any disclosable relationships and related
transactions of directors and executive officers will be set forth under the
caption "Executive Compensation - Compensation Committee Interlocks and
Insider Participation" in the Proxy Statement and is incorporated herein by
reference.

                                     PART IV

ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

(a)  1.   See Index to Financial Information on page F-1.
     2.   See Exhibit Index on page i.

(b)  No reports on Form 8-K were filed during the fourth quarter of the
     fiscal year ended June 30, 2000.

                                     14

<PAGE>

                                   SIGNATURES

       Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized on the 23rd day of
August, 2000.

                                    By: /s/  CARRIE A. WOLFE
                                        --------------------------------------
                                        Carrie A. Wolfe
                                        Vice President, Finance and Accounting

         Each person whose signature appears below hereby constitutes and
appoints Michael J. Soenen and Carrie A. Wolfe, and each of them, as his or
her true and lawful attorneys-in-fact and agents, with full power of
substitution and resubstitution, for him or her and in his or her name, place
and stead, in any and all capacities, to sign the Company's Annual Report on
Form 10-K for the fiscal year ended June 30, 2000 and any and all amendments
thereto, and to file the same, with all exhibits and schedules thereto, and
other documents therewith, with the Securities and Exchange Commission, and
hereby grants unto such attorneys-in-fact and agents full power and authority
to do and perform each and every act and thing necessary or desirable to be
done, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorneys-in-fact and
agents, or his or her substitutes, may lawfully do or cause to be done by
virtue hereof.

         Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
Registrant and in the capacities indicated below on the 23rd day of August,
2000.

<TABLE>
<CAPTION>

                  SIGNATURE                                TITLE
                  ---------                                -----
<S>                                    <C>
         /s/ MICHAEL J. SOENEN           President and Chief Executive Officer
         -----------------------         (Principal Executive Officer)
         Michael J. Soenen

         /s/ CARRIE A. WOLFE             Vice President, Finance and Accounting
         -----------------------         (Principal Financial and
         Carrie A. Wolfe                 Accounting Officer)

         /s/ RICHARD C. PERRY            Chairman of the Board and Director
         -----------------------
         Richard C. Perry

         /s/ HABIB Y. GORGI              Director
         -----------------------
         Habib Y. Gorgi

         /s/ SAMUEL I. HILL              Director
         -----------------------
         Samuel I. Hill

         /s/ VERONICA K. HO              Director
         -----------------------
         Veronica K. Ho

         /s/ RICHARD M. OWEN             Director
         -----------------------
         Richard M. Owen

         /s/ GARY K. SILBERBERG          Director
         -----------------------
         Gary K. Silberberg

</TABLE>

                                     15
<PAGE>


                               FTD.COM INC.
                     INDEX TO FINANCIAL INFORMATION
<TABLE>
<CAPTION>
                                                                                Page
                                                                               -----
<S>                                                                          <C>
Independent Auditors Report ................................................    F-2

Statements of Operations for the years ended June 30,  2000, 1999 and 1998..    F-3

Balance Sheets as of June 30, 2000 and 1999 ................................    F-4

Statements of Cash Flows for the years ended June 30, 2000, 1999 and 1998 ..    F-5

Statements of Stockholders' Equity (Deficit) for the years ended
June 30, 2000, 1999 and 1998  ..............................................    F-6

Notes to Financial Statements ..............................................    F-7

                                     F-1

</TABLE>

<PAGE>


                          INDEPENDENT AUDITORS' REPORT

The Board of Directors and Stockholders
FTD.COM INC.:

     We have audited the accompanying balance sheets of FTD.COM INC. (a
subsidiary of Florists Transworld Delivery, Inc.) as of June 30, 2000 and
1999 and the related statements of operations, stockholders' equity
(deficit), and cash flows for each of the years in the three-year period
ended June 30, 2000.  These financial statements are the responsibility of
the Company's management.  Our responsibility is to express an opinion on
these financial statements based on our audits.

     We conducted our audits in accordance with auditing standards generally
accepted in the United States of America.  Those standards require that we
plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement.  An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements.  An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation.  We believe that our
audits provide a reasonable basis for our opinion.

     In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of FTD.COM INC. as
of June 30, 2000 and 1999, and the results of its operations and its cash
flows for each of the years in the three-year period ended June 30, 2000 in
conformity with accounting principles generally accepted in the United States
of America.

/s/  KPMG LLP

July 27, 2000
Chicago, Illinois




                                    F-2


<PAGE>

                              FTD.COM INC.
                        STATEMENTS OF OPERATIONS
                  (In thousands, except per share data)

<TABLE>
<CAPTION>

                                                                                     Year ended June 30,
                                                                          ------------------------------------------------------
                                                                              2000                1999                1998
                                                                          --------------     ---------------     ---------------
<S>                                                                       <C>                <C>               <C>
Revenues:
       Order revenues and service fees, net of discounts                       $ 87,586            $ 45,212            $ 30,423
       Commissions from FTDI                                                      7,245               4,148                   -
       Other, principally from FTDI                                               3,374                 258                 240
                                                                          --------------     ---------------     ---------------

Total revenues                                                                   98,205              49,618              30,663

       Fulfillment and processing services, including expenses
         from FTDI of $1,553, $3,436 and $2,520 for the years ended
         June 30, 2000, 1999 and 1998, respectively                              69,925              38,848              26,324
                                                                          --------------     ---------------     ---------------

Gross profit                                                                     28,280              10,770               4,339

Operating expenses:
       Marketing and promotions, including expenses from FTDI
         of $3,700 and $1,854 for the years ended June 30, 1999 and
         1998, respectively                                                      42,901              11,991               5,995
       Technology development, including expenses from FTDI of
         $1,087, $1,431 and $1,153 for the years ended June 30,
         2000, 1999 and 1998, respectively                                       11,840               2,156               1,420
       General and administrative, including expenses from FTDI of
         $2,611, $2,334 and $1,707 for the years ended June 30,
         2000, 1999 and 1998, respectively                                        9,750               4,983               3,239
                                                                          --------------     ---------------     ---------------

Total operating expenses                                                         64,491              19,130              10,654
                                                                          --------------     ---------------     ---------------

Loss from operations                                                            (36,211)             (8,360)             (6,315)
Interest income/(expense)                                                         1,609                (142)               (177)
                                                                          --------------     ---------------     ---------------

Loss before income taxes                                                        (34,602)             (8,502)             (6,492)
Income tax benefit                                                                    -               3,055               2,597
                                                                          --------------     ---------------     ---------------

Net loss                                                                        (34,602)             (5,447)             (3,895)
Dividends on preferred stock                                                          -                  74                   -
                                                                          --------------     ---------------     ---------------
Net loss available to common stockholders                                     $ (34,602)           $ (5,521)           $ (3,895)
                                                                          ==============     ===============     ===============


Basic and diluted net loss per share of common stock                            $ (0.75)            $ (0.13) (a)
                                                                          ==============     ===============

Weighted average basic and diluted common shares outstanding
used in the calculation of net loss per share                                    45,879              40,920  (a)
                                                                          ==============     ===============

</TABLE>

(a) 1999 pro forma weighted average basic and diluted common shares
outstanding consist of 40,920,000 shares of common stock issued in
conjunction with the incorporation of the Company on May 19, 1999,
retroactively adjusted to reflect the 12-for-1 split of FTD.COM Class B
common stock as discussed in Note 5 of the notes to the financial
statements.

                 See accompanying notes to financial statements.


                                       F-3

<PAGE>

                                  FTD.COM INC.
                                 BALANCE SHEETS
                        (In thousands, except share data)

<TABLE>
<CAPTION>

                                                                                                      June 30,          June 30,
                                                                                                        2000              1999
                                                                                                    --------------    --------------
<S>                                                                                              <C>                 <C>
ASSETS

CURRENT ASSETS:
      Cash and cash equivalents                                                                          $ 17,961           $ 8,205
      Accounts receivable                                                                                     417               233
      Prepaid expenses                                                                                        297               215
      Distribution agreements                                                                                 142             1,707
      Deferred offering expenses                                                                                -             1,062
                                                                                                    --------------    --------------

             Total current assets                                                                          18,817            11,422
                                                                                                    --------------    --------------

OTHER ASSETS:
      Software development costs                                                                              150                 -
      Other long term assets                                                                                  252                 -
                                                                                                    --------------    --------------
             Total other assets                                                                               402                 -
                                                                                                    --------------    --------------
             Total assets                                                                                $ 19,219          $ 11,422
                                                                                                    ==============    ==============

LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

CURRENT LIABILITIES:
      Accounts payable                                                                                    $ 7,281           $ 2,021
      Payable to FTDI                                                                                       1,866               311
      Unearned revenue                                                                                        221               129
      Accrued offering expenses                                                                                 -               638
      Other accrued liabilities                                                                             1,079               154
                                                                                                    --------------    --------------
             Total current liabilities                                                                     10,447             3,253
                                                                                                    --------------    --------------

      Series A 8% Cumulative Redeemable Convertible Preferred Stock,
           $.01 par value; no shares issued and outstanding at June 30, 2000;
           90,000 shares issued and outstanding at June 30, 1999                                                -             9,074
                                                                                                    --------------    --------------

STOCKHOLDERS' EQUITY (DEFICIT):
      Preferred stock, $.01 par value; 5,000,000 shares authorized; no shares
           issued and outstanding at June 30, 2000; 90,000 shares of Series A 8%
           Cumulative Redeemable Preferred Stock issued and outstanding at June 30, 1999                        -                 -
      Class A common stock, $.01 par value; 250,000,000 shares authorized; 8,259,614
           shares issued and outstanding at June 30, 2000; no shares issued
           and outstanding at June 30, 1999                                                                    83                 -
      Class B common stock, $.01 par value; 100,000,000 shares authorized;
           40,395,000 shares issued and outstanding at June 30, 2000;
           40,920,000 shares issued and outstanding at June 30, 1999                                          404               409
      Additional paid-in capital                                                                           47,994                 -
      Deferred compensation                                                                                (3,867)                -
      Retained deficit                                                                                    (35,842)           (1,314)
                                                                                                    --------------    --------------
             Total stockholders' equity (deficit)                                                           8,772              (905)
                                                                                                    --------------    --------------
             Total liabilities and stockholders' equity (deficit)                                        $ 19,219          $ 11,422
                                                                                                    ==============    ==============

</TABLE>

                 See accompanying notes to financial statements.


                                     F-4

<PAGE>

                                  FTD.COM INC.
                            STATEMENTS OF CASH FLOWS
                                 (In thousands)

<TABLE>
<CAPTION>

                                                                                Year ended June 30,
                                                                     ----------------------------------------
                                                                        2000           1999           1998
                                                                     ----------     ---------    ------------
<S>                                                                 <C>            <C>             <C>
Net loss                                                             $ (34,602)     $ (5,447)       $ (3,895)
Adjustments to reconcile net loss to net cash and cash equivalents
   used in operating activities:
        Deferred compensation expense                                      199             -               -
        Web Site one-time charge                                         4,403             -               -
        Changes in assets and liabilities:
            Accounts receivable                                           (184)          (20)              4
            Prepaid expenses                                               (82)         (195)             10
            Distribution agreements                                      1,565           273          (1,979)
            Other long term assets                                        (252)            -               -
            Accounts payable                                             5,260           303            (195)
            Payable to FTDI                                              1,380            22             177
            Unearned revenue                                                92           129               -
            Other accrued liabilities                                       83           435             116
                                                                     ----------     ---------    ------------

Net cash and cash equivalents used in operating activities             (22,138)       (4,500)         (5,762)
                                                                     ----------     ---------    ------------

Net cash and cash equivalents used in investing activities:
        Software development costs                                      (3,711)            -               -
                                                                     ----------     ---------    ------------

Net cash and cash equivalents provided by financing activities:
        Deferred offering expenses                                       1,062        (1,062)              -
        Accrued offering expenses                                         (638)            -               -
        Issuance of Series A preferred stock                                 -         9,000               -
        Contributions from FTDI                                              -         4,767           5,762
        Proceeds from the issuance of common stock                      35,181             -               -
                                                                     ----------     ---------    ------------

Net cash and cash equivalents provided by financing activities          35,605        12,705           5,762
                                                                     ----------     ---------    ------------

Net increase in cash and cash equivalents                                9,756         8,205               -

Cash and cash equivalents, beginning of year                             8,205             -               -
                                                                     ----------     ---------    ------------

Cash and cash equivalents, end of year                                $ 17,961      $  8,205        $      -
                                                                     ==========     =========    ============
</TABLE>

                 See accompanying notes to financial statements.

                                            F-5


<PAGE>

                                  FTD.COM INC.
                  STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)
                                 (In thousands)


<TABLE>
<CAPTION>

                                           Class A                 Class B
                                         common stock            common stock         Add'l
                                      ----------------------  --------------------   paid-in
                                       Shares      Amount      Shares     Amount     capital
                                      ----------  ----------  ----------  --------  -----------
<S>                                  <C>         <C>          <C>         <C>       <C>
Balance at June 30, 1997                      -         $ -           -       $ -          $ -
Contributions from FTDI
Loss before income taxes
Tax benefit contributed to FTDI
                                      ----------  ----------  ----------  --------  -----------
Balance at June 30, 1998                      -           -           -         -            -
                                      ==========  ==========  ==========  ========  ===========

Contributions from FTDI
Loss before income taxes from
  July 1, 1998 to May 18, 1999
Tax benefit contributed to FTDI
  from July 1, 1998 to May 18, 1999
Issuance of common stock                                          3,410        34
Retroactive adjustment
  for the 12-for-1 stock split                                   37,510       375
Net loss from May 19, 1999
  to June 30, 1999
Dividends -
 Series A preferred stock
                                      ----------  ----------  ----------  --------  -----------
Balance at June 30, 1999                      -           -      40,920       409            -
                                      ==========  ==========  ==========  ========  ===========

Net loss
Conversion of
  Series A preferred stock                1,385          14                              8,986
Issuance of common stock                  4,995          50                             35,131
Stock compensation plans                  1,355          14                              3,877
Amortization of deferred compensation
Conversion of Class B common stock
  to Class A common stock                   525           5        (525)       (5)
                                      ----------  ----------  ----------  --------  -----------
Balance at June 30, 2000                  8,260        $ 83      40,395     $ 404     $ 47,994
                                      ==========  ==========  ==========  ========  ===========


                                                                                 Total
                                                                                 stock-
                                       Deferred      Stock-                     holder's
                                       compen-      holder's      Retained       equity
                                        sation       deficit       deficit      (deficit)
                                      -----------  ------------  ------------  ------------

Balance at June 30, 1997                     $ -      $ (2,018)          $ -      $ (2,018)
Contributions from FTDI                                  5,762                       5,762
Loss before income taxes                                (6,492)                     (6,492)
Tax benefit contributed to FTDI                          2,597                       2,597
                                      -----------  ------------  ------------  ------------
Balance at June 30, 1998                       -          (151)            -          (151)
                                      ===========  ============  ============  ============

Contributions from FTDI                                  4,767                       4,767
Loss before income taxes from
  July 1, 1998 to May 18, 1999                          (7,637)                     (7,637)
Tax benefit contributed to FTDI
  from July 1, 1998 to May 18, 1999                      3,055                       3,055
Issuance of common stock                                   (34)                          -
Retroactive adjustment
  for the 12-for-1 stock split                                          (375)            -
Net loss from May 19, 1999
  to June 30, 1999                                                      (865)         (865)
Dividends -
 Series A preferred stock                                                (74)          (74)
                                      -----------  ------------  ------------  ------------
Balance at June 30, 1999                       -             -        (1,314)         (905)
                                      ===========  ============  ============  ============

Net loss                                                             (34,602)      (34,602)
Conversion of
  Series A preferred stock                                                74         9,074
Issuance of common stock                                                            35,181
Stock compensation plans                  (4,066)                                     (175)
Amortization of deferred compensation        199                                       199
Conversion of Class B common stock
  to Class A common stock                                                                -
                                      -----------  ------------  ------------  ------------
Balance at June 30, 2000                $ (3,867)          $ -     $ (35,842)      $ 8,772
                                      ===========  ============  ============  ============
</TABLE>

                 See accompanying notes to financial statements.


                                      F-6

<PAGE>

                                  FTD.COM INC.
                          NOTES TO FINANCIAL STATEMENTS

NOTE 1.  DESCRIPTION OF BUSINESS

         FTD.COM Inc. ("the Company" or "FTD.COM") is an Internet and
telephone marketer of flowers and specialty gifts, which began selling
products directly to consumers through the 1-800-SEND-FTD toll-free telephone
number in 1993 and electronically to consumers through the WWW.FTD.COM Web
site in 1994. The Company offers same-day delivery of floral orders to nearly
100% of the U.S. population. The majority of floral orders are fulfilled by a
group of independent FTD florists who adhere to FTD.COM's quality guarantee
and service standards. The Company offers over 400 floral arrangements and
over 600 specialty gifts, including gourmet gift baskets, holiday gift sets,
bath and beauty products, garden products, stuffed animals and a variety of
other specialty gift items. Product offerings are available at prices ranging
from $17.99 to over $200.00.

         The Company is a majority-owned subsidiary of Florists'
Transworld Delivery, Inc. ("FTDI"). FTDI is a wholly-owned subsidiary
of IOS BRANDS Corporation ("IOS"), formerly known as FTD Corporation.
The Company was incorporated as a Delaware corporation on May 19, 1999 and
at such time began to retain its own earnings. In consideration for the
receipt of 40,920,000 shares of Class B common stock (as adjusted to reflect
a 12-for-1 stock split on July 30, 1999), FTDI contributed to the Company
the assets and liabilities relating to the consumer floral order and
specialty gift product business.

NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

BASIS OF PRESENTATION

        From the Company's inception until June 1, 1999, FTDI or its
predecessor provided funding for working capital and the Company
participated in FTDI's central cash management system. As a part of
FTDI's central cash management system, all cash generated from and cash
required to support the Company's operations was deposited and received
through FTDI's corporate operating cash accounts. As a result, there were
no separate bank accounts or records for these transactions. Accordingly, the
amounts represented by the caption "Contributions from FTDI" in the Company's
statements of cash flows represent the net effect of all cash transactions
between the Company and FTDI from inception until June 1, 1999. During June
1999, the Company funded its working capital needs through the use of
proceeds from the sale of preferred stock.

        Certain  expenses  reflected in the financial  statement
include allocations of expenses from FTDI. These allocations take into
consideration personnel, business volume or other appropriate bases and
generally include administrative expenses related to general management,
insurance, information management and other services provided to the Company
by FTDI. Interest expense for fiscal years prior to the fiscal year ended
June 30, 2000 reflects interest associated with the Company's share of the
aggregate borrowings of FTDI for each of the periods presented.
Allocations of expenses are estimates based on management's best
assessment of actual expenses incurred by the Company.

    Effective as of June 1, 1999, expenses related to services covered
by the Intercompany Services Agreement were charged to the Company pursuant
to the terms thereof. At June 30, 2000 and 1999, amounts owed to FTDI
pursuant to the Intercompany Services Agreement are included in the
balance sheet caption "Payable to FTDI."

    The financial statements for fiscal years prior to the fiscal year
ended June 30, 2000 have been prepared as if the Company operated as a
stand-alone entity since its inception. The financial information for the
fiscal years prior to the fiscal year ended June 30, 2000 may not necessarily
reflect the financial position, results of operations or cash flows of the
Company in the future or what the financial position, result of operations
or cash flows of the Company would have been if it had been a
separate, stand-alone,  publicly-held corporation during the periods
presented.

CASH AND CASH EQUIVALENTS

     Cash and cash equivalents consist of deposits with banks and
short-term investments with original maturities of three months or less.

                                    F-7
<PAGE>

ACCOUNTS RECEIVABLE

     Accounts receivable include amounts owed from corporate customers
for purchases of floral, specialty gift products and gift certificates
through the Company's toll free number. The credit risk associated with
collection of accounts receivable is minimal due to the quality of the
Company's customer base.

DISTRIBUTION AGREEMENTS

     The Company, and FTDI on behalf of the Company in prior fiscal years,
has entered into  distribution  agreements with various  vendors. These
distribution agreements principally relate to Internet advertising. The costs
of these agreements are being amortized over their respective useful lives,
which range from one to two years, using the straight-line method. The
Company periodically evaluates whether events and circumstances indicate that
the remaining balances of intangibles may not be recoverable or that the
remaining estimated useful lives may warrant revision. When such factors
indicate that intangibles should be evaluated for possible impairment, the
Company uses an estimate of undiscounted future cash flows to measure whether
the intangibles are recoverable, and over what period. The Company has
determined that, as of June 30, 2000, there has been no impairment in the
carrying value of the distribution agreements.

INCOME TAXES

     The Company is included in the consolidated U.S. income tax return of
IOS. The provision for income taxes of the Company has been calculated as if
the Company was a stand-alone corporation filing separate tax returns.

     The Company accounts for income taxes in accordance with Statement of
Financial Accounting Standards ("SFAS") No. 109, ACCOUNTING FOR INCOME TAXES.
Cumulative taxes from the Company's inception through its incorporation on
May 19, 1999 have been settled through stockholder's net deficit. For periods
subsequent to the Company's incorporation, taxes are recognized pursuant to
the terms of the amended Tax Sharing Agreement among FTDI, IOS and the
Company, which provides that the Company will pay its tax liability computed
as if it were filing a separate return. Under that agreement, IOS will refund
any tax benefits attributable to the Company, provided that the Company would
have realized the benefits had the Company filed its own Federal income tax
return.

REVENUE AND COST RECOGNITION

ORDER REVENUES AND SERVICE FEES

     Orders placed through the Company's Web site or 1-800-SEND-FTD typically
are paid for using a credit card. Generally, when a customer makes a purchase
that will be fulfilled by an FTD florist, the Company receives the order,
charges the customer's credit card and transmits the order to the Mercury
Network, which is owned by FTDI. The Mercury Network then transmits the order
to the fulfilling florist. The Company recognizes 100% of the order value as
revenue and recognizes associated costs for fulfillment and processing
services when the order is fulfilled. Processing services costs primarily
consist of fees due to FTDI for processing services and amounts due to the
third party call center that processes orders through the Company's toll-free
telephone number. In addition, the Company charges the customer a service fee
for all floral orders. The service fee for floral orders placed over the
Internet is $6.99 and the service fee for floral orders placed over the
telephone is $9.99, prior to any promotional discounts. From time to time,
discounts on order revenues or service fees are offered in connection with
product or holiday promotions to select customer groups. Orders that are not
fulfilled by an FTD florist, such as holiday gift baskets, are fulfilled by
a manufacturer or third party distributor based on a pre-negotiated price.
The Company charges the customer shipping and handling fees for these
specialty gift product orders. Amounts charged to the customer for the product
and shipping and handling are recorded as revenue while the pre-negotiated
price of the product and the costs incurred for shipping and handling are
recorded as costs of fulfillment and processing services. Order revenues and
service fees are reported net of discounts.

COMMISSIONS

     Commission revenues represent a fee, consistent with industry practice,
paid to the Company by FTDI for floral orders that are cleared through the
FTD Clearinghouse. Commissions revenues were earned pursuant to an incentive
program from FTDI in effect from July 1998 through September 1999 and
currently are earned pursuant to a commission agreement with FTDI in effect
since October 1999. Commission revenues are recognized when the order is
fulfilled.

UNEARNED REVENUE

     Unearned revenue at June 30, 2000 represents order revenues associated
with floral and specialty gift orders which were placed prior to June 30,
2000 and will be delivered after such date. This revenue will be recognized,
together with the related cost of goods sold, when the order is fulfilled.

SOFTWARE DEVELOPMENT COSTS

     The Company has adopted the provisions of Statement of Position ("SOP")
98-1, ACCOUNTING FOR THE COSTS OF SOFTWARE DEVELOPED OR OBTAINED FOR INTERNAL
USE and Emerging Issues Task Force No. 00-02, ACCOUNTING FOR WEB SITE
DEVELOPMENT COSTS. Accordingly, certain costs incurred in the planning and
development stage of internal-use computer software,  including Web site
development, are expensed as incurred. The Company capitalized $3.7 million
of Web site development costs incurred subsequent to the planning and
development stage during fiscal 2000. The Company subsequently wrote-off $3.5
million of

                                    F-8

<PAGE>

these previously capitalized costs as part of the $4.4 million one-time
charge associated with the development work related to a new version of the
Company's Web site.

MARKETING AND PROMOTION COSTS

     Marketing and promotion costs, which principally consist of costs
related to advertising and affinity programs, are charged to expense as
incurred and include allocations from FTDI of $3.7 million and $1.9 million
in fiscal years 1999 and 1998, respectively. Pursuant to the Intercompany
Services Agreement, effective as of June 1, 1999, FTDI no longer charges any
of its marketing and promotion costs to the Company.

USE OF ESTIMATES

     Management of the Company has made a number of estimates and
assumptions relating to the reporting of assets, liabilities, revenues and
expenses and the disclosure of contingent assets and liabilities in
connection with the preparation of these financial statements in conformity
with generally accepted accounting principles. Actual results could differ
from those estimates.

RECLASSIFICATIONS

     Certain amounts in the fiscal years 1999 and 1998 financial statements
have been reclassified to conform to the fiscal year 2000 presentation.

CONCENTRATION OF CUSTOMER AND CREDIT RISKS

     The Company's customers are comprised of consumers that utilize its Web
site or toll-free number to purchase products. Financial instruments, which
potentially subject the Company to concentrations of credit risk, principally
consist of accounts receivable. As of June 30, 2000 and 1999, there were no
significant concentrations of accounts receivable or related credit risks.

CONCENTRATION OF SUPPLIERS

     The Company is dependent upon certain significant vendors to supply
products, the ability of FTDA member florists to fulfill the Company's floral
orders and the ability of third parties to fulfill the Company's specialty
gift orders. In addition, the Company utilizes the communication network of
FTDI as an important component of its operations. Although there are a
limited number of suppliers of this type of network, management believes that
other suppliers could provide a similar network on comparable terms. A change
in suppliers, however, could cause a delay in order processing and
fulfillment and a possible reduction in the quality of service, which could
adversely affect operating results.

     The Company currently utilizes hardware, software and services that
support its Web site, an important component of its operations, from a third
party vendor under an operating service agreement. Although there are a
limited number of Web site service companies, management believes that other
vendors could provide the Company with these Web site services on comparable
terms. The terms of the current operating service agreement provide for
variable payments, which are based on the number of completed orders, and an
annual term with renewal options. The cost to the Company for these services
is derived from the volume of order transactions. A change in Web site
service companies, however, could cause a possible reduction in the quality
of service, which could adversely affect operating results.

FAIR VALUE OF FINANCIAL INSTRUMENTS

     Financial instruments, including accounts receivable, accounts payable
and accrued liabilities are reflected in the financial statements at carrying
or contract value. Those values were not materially different from their fair
values.

STOCK-BASED COMPENSATION

     The Company has adopted the provisions of SFAS No. 123, ACCOUNTING FOR
STOCK-BASED COMPENSATION. SFAS No. 123 allows entities to continue to apply
the provisions of Accounting Principles Board ("APB") Opinion No. 25,
ACCOUNTING FOR STOCK ISSUED TO EMPLOYEES, and provide pro forma net income
and pro forma earnings per share disclosures for employee stock option grants
as if the fair value-based method defined in SFAS 123 has been applied. The
Company has elected to continue to apply the provisions of APB Opinion No. 25.

                                    F-9

<PAGE>

BASIC AND DILUTED LOSS PER SHARE

     The Company computes net loss per share in accordance with the
provisions of SFAS No. 128, EARNINGS PER SHARE. Under the provisions of SFAS
No. 128, basic and diluted net loss per share is computed by dividing the net
loss for the period by the weighted average number of common shares
outstanding for the period.

     At June 30, 1999, pro forma weighted average common shares outstanding
consists of 40,920,000 shares of common stock issued in conjunction with the
incorporation of the Company on May 19, 1999, retroactively adjusted for the
stock split described in Note 5.

     Shares issuable from securities that could potentially dilute basic
earnings per share in the future that were not included in the computation of
earnings per share because their effect was anti-dilutive consisted of
148,000 shares and 1,384,614 shares at June 30, 2000 and 1999, respectively.

NOTE 3. DISTRIBUTION AGREEMENTS

     The Company has entered into Internet distribution agreements whereby
the Company will receive various services including advertising space on high
traffic shopping and search-oriented Web sites, portal links to the Company's
Web site and co-branded online flower sites. Pursuant to terms of these
agreements, at June 30, 2000, the Company was required to pay total fixed
fees of $1.1 million, including $1.0 million due in fiscal year 2001. In
addition, the Company is required to pay variable fees based on a percentage
of net revenue. A portion of the fixed fees are refundable in accordance with
contractual calculations in the event that the Company does not receive the
specified number of impressions through these Internet distribution
agreements. The Company records expenses related to the agreements ratably
over the contract term. During the year ended June 30, 2000, the Company
recorded $12.9 million of marketing and promotion expenses related to these
distribution agreements, including a one-time charge in the fourth quarter of
fiscal 2000 of $2.3 million related to the termination of one of the
Company's Internet portal distribution agreements.

NOTE 4. SERIES A CUMULATIVE REDEEMABLE CONVERTIBLE PREFERRED STOCK

     On May 19, 1999, in connection with the Company's incorporation,
5,000,000 shares of preferred stock were authorized. Additionally, on May 19,
1999, the Company designated 90,000 shares of preferred stock as Series A 8%
Cumulative Redeemable Convertible Preferred Stock. On May 20, 1999, 30,000
shares of this Series A preferred stock were issued and sold to an investor
for consideration of $3.0 million. On May 25, 1999, 60,000 shares of this
Series A preferred stock were issued and sold to an investor for
consideration of $6.0 million.

     These shares of Series A preferred stock had a liquidation preference of
$100 per share and accrued dividends at the annual rate of 8% of the
liquidation preference. Accrued dividends were payable at the discretion of
the Company's board of directors and were manditorily payable upon
liquidation or redemption. At June 30, 1999 accrued and unpaid dividends were
$74,301, or $0.83 per share.

     Upon closing of the initial public offering on October 4, 1999, each
share of Series A preferred stock converted into 15.3846 shares of Class A
common stock, for a total of 1,384,614 shares, in accordance with the
conversion rate described in the Company's certificate of incorporation, as
amended. Upon conversion, accrued and unpaid dividends of $74,301 on the
Series A preferred stock were offset against retained earnings.

NOTE 5. CAPITAL TRANSACTIONS

     On May 19, 1999, the Company was incorporated and capitalized through
the authorization of 250,000,000 shares of Class A common stock and
100,000,000 shares of Class B common stock and the issuance of 3,410,000
shares of Class B common stock to FTDI. Holders of Class A common stock are
entitled to one vote per share and holders of Class B common stock are
entitled to ten votes per share. The Class B common stock is convertible into
shares of Class A common stock on a one-for-one basis at the option of the
holder and automatically converts into shares of Class A common stock on a
one-for-one basis upon any transfer to a person other than FTDI or certain of
its affiliates or successors or a strategic partner.

     On July 30, 1999, the Company's Board of Directors approved a 12-for-1
stock split of the Company's outstanding Class B common stock resulting in
FTDI holding 40,920,000 shares of Class B common stock. All share and per
share information in the accompanying financial statements has been
retroactively restated to reflect the effect of the stock split.

     On September 28, 1999, the Company agreed to issue and sell 4,500,000
shares of its Class A common stock in an Initial Public Offering ("IPO")
transaction at a price of $8.00 per share. The gross proceeds from the
offering were $36.0 million. The net proceeds were $31.5 million after
deducting the underwriting discounts and commissions of $2.5 million and
other offering expenses of $2.0 million. The deferred offering expenses of
$1.1 million at June 30, 1999 incurred in connection with the IPO were
charged against additional paid-in capital upon the pricing of the IPO.

     Upon the closing of the IPO on October 4, 1999, the 90,000 outstanding
shares of Series A preferred stock were automatically converted into
1,384,614 shares of Class A common stock. Upon conversion, accrued and unpaid
dividends of $74,301 on the Series A preferred stock were offset against
retained earnings.

                                   F-10

<PAGE>

     On October 6, 1999, the underwriters exercised their one-time option to
purchase 495,000 additional shares of Class A common stock at the IPO price
of $8.00 per share, representing a portion of the over-allotment option
granted to the underwriters in connection with the IPO. The net proceeds to
the Company from this issuance and sale of 495,000 shares of Class A common
stock were $3.7 million after deducting underwriting discounts and
commissions.

     On June 12, 2000, FTDI transferred 525,000 shares of previously issued
and outstanding Class B common stock to key employees of FTDI. At the time of
transfer, the Class B common stock automatically converted into Class A
common stock.

NOTE 6. INCOME TAXES

     At June 30, 2000, the Company had net operating loss carryforwards for
Federal tax purposes of $35.5 million which are available to offset future
Federal taxable income, if any, through 2020.

     There was no income tax benefit recorded by the Company for the fiscal
year ended June 30, 2000. Income tax benefit for the years ended June 30,
1999 and 1998 consisted of (in thousands):

<TABLE>
<CAPTION>

                                                     Current    Deferred     Total
                                                     -------    --------    -------
       <S>                                           <C>        <C>         <C>
       Year ended June 30, 1999:
         U.S. Federal ....................           $ 2,468      $   0     $ 2,468
         State and local .................               587      $   0         587
                                                     -------    -------     -------
                                                     $ 3,055      $   0     $ 3,055
                                                     =======    =======     =======

       Year ended June 30, 1998:
         U.S. Federal ....................           $ 2,098      $   0     $ 2,098
         State and local .................               499          0         499
                                                     -------    -------     -------
                                                     $ 2,597      $   0     $ 2,597
                                                     =======    =======     =======
</TABLE>


     Income tax benefit differed from the amounts computed by applying the
U.S. Federal income tax rate of 35% to losses before income tax expense as a
result of the net-of-tax effect of state and local income taxes and the
change in the valuation allowance.

     Cumulative taxes since the acquisition of FTDA by IOS through the
Company's incorporation on May 19, 1999 of $10.7 million, representing $10.1
million of tax benefits and $0.6 million of deferred taxes associated with a
distribution agreement, have been settled through stockholder's net deficit.
For periods subsequent to the Company's incorporation, taxes are recognized
pursuant to the terms of the amended Tax Sharing Agreement among FTDI, IOS
and the Company, which provides that the Company will pay its tax liability
computed as if it were filing a separate return. Under that agreement, IOS
will refund any tax benefits attributable to the Company, provided that the
Company would have realized the benefits had the Company filed its own
Federal income tax return. At June 30, 2000, there were no tax-related
amounts due to or from IOS.

     The following represents the components of the deferred tax asset (in
thousands):

<TABLE>
<CAPTION>

                                                              June 30,
                                                    ----------------------------------
                                                          2000              1999
                                                    --------------      --------------
    <S>                                             <C>                 <C>
    Deferred tax assets:
    U.S. net operating loss carryforwards ........    $  14,011             $  310
    Non-deductible accrued expenses ..............          176                 --
    Distribution agreements ......................           --                 36
                                                      ---------             ------
    Total gross deferred income tax assets .......       14,187                346
    Less: Valuation allowance ....................      (14,187)              (346)
                                                      ---------             ------
    Net deferred tax assets ......................    $      --             $   --
                                                      =========             ======
</TABLE>

   The net change in the total valuation allowance for the year ended
June 30, 2000 was an increase of $13.9 million. In assessing the realizability
of deferred tax assets, the Company considers whether it is more likely than
not that some or all of these deferred tax assets will be realized. The
ultimate realization of deferred tax assets is dependent upon the generation of
future taxable income during the period in which these temporary differences
become deductible. This assessment was performed considering projected future
taxable income. The valuation allowance of $14.2 million is maintained on
those deferred tax assets that the Company has not determined to be more
likely than not realizable as of June 30, 2000. This valuation allowance will
be reviewed on a regular basis and adjustments made as appropriate.

NOTE 7. RELATED PARTY TRANSACTIONS.

      The Company engages in transactions with FTDI in the normal course of
its business. The Company records revenue related to fees paid by FTDI to the
Company, effective July 1, 1999, for the hosting of florists' Web sites
through the WWW.FTD.COM Internet site. Additionally, FTDI pays the Company
commission revenues for floral orders that are cleared through the FTD
Clearinghouse.

                                    F-11

<PAGE>

      For orders processed through the FTD Clearinghouse, FTDI charges the
Company customary clearing fees. The Company also utilizes FTDI's credit card
processing services. FTDI charges the Company a percentage of the order value
to utilize these credit card processing services. Costs for clearing services
and credit card processing expenses are included in fulfillment and
processing services expenses and are covered by the Intercompany Services
Agreement.

      Prior to June 1, 1999, FTDI performed marketing services on behalf of
the Company and was allocated the respective costs for the fiscal years prior
to fiscal 2000. These costs are classified as marketing and promotion
expenses.

      Effective as of June 1, 1999, the Company and FTDI entered into an
Intercompany Services Agreement, which covers the technical and
administrative services, facilities and occupancy, internet/telcom usage and
other services that are provided to the Company by FTDI. Technical and
administrative services include employee and other departmental costs for the
technical, human resources, accounting, administrative and legal departments.
In consideration for these services, FTDI has allocated a portion of its
departmental costs related to such services to the Company. The allocations
were estimated using proportional cost allocation methods, plus a general and
administrative up-charge of 5%. These costs are classified as technology
development expenses and general and administrative expenses, as appropriate.

      The Company does not maintain separate physical facilities. It uses
space of FTDI and is charged rent based upon a market rate estimate. The
Company is also charged a pro-rata share, based on square footage, of the
utilities, property taxes and other occupancy costs. Internet/telecom usage
costs include an allocation of monthly depreciation for all hardware and
software based on usage by the Company, as well as monthly rates for
telecommunications expenses of the Company. These costs are classified as
general and administrative expenses.

      The Company uses FTDI's trademarks in connection with the sale of goods
and services through its Web site and toll-free telephone number. The Company
entered into an agreement with FTDI that includes provisions for royalty
payments of 1% of order revenues and service fees, a 99-year term, and
termination, at FTDI's option, in the event that ownership of 20% or more of
the Company is acquired by an organization not affiliated with FTDI. Royalty
expense associated with FTDI's trademarks has been included in general and
administrative expenses.

      The Statements of Operations include the following expense transactions
with FTDI (in thousands):

<TABLE>
<CAPTION>

                                                          Year ended June 30,
                                                 -------------------------------
                                                    2000       1999      1998
                                                 ----------  --------   --------
<S>                                              <C>         <C>        <C>
Fulfillment and processing service ............. $ 1,553     $ 3,436    $ 2,520
Marketing and promotion ........................      --       3,700      1,854
Technology development .........................   1,087       1,431      1,153
General and administrative .....................   2,611       2,334      1,707
</TABLE>

      Prior to the Company's IPO on September 28, 1999, key employees of IOS
were granted IOS restricted shares in exchange for services to be provided
to IOS over a five year service period. At the time of the IPO, certain of
these key employees became employees of FTD.COM and no longer provided
services to IOS. The key employees, however, still retained their rights to
the IOS restricted shares and continue to earn the restricted shares in
exchange for services that will be provided to FTD.COM. Therefore, at the
time of the IPO, FTD.COM paid IOS for the remaining $175,000 of deferred
compensation associated with the restricted shares. During fiscal 2000, the
Company recorded $39,000 of compensation expense related to these restricted
shares.

                                    F-12

<PAGE>

NOTE 8. STOCK OPTIONS AND SHARES RESERVED

      The FTD.COM INC. 1999 Equity Incentive Plan (the "Plan") provides for
the issuance of up to 4,500,000 shares of Class A common stock in connection
with the granting of option rights, stock appreciation rights (SARs),
restricted shares, deferred shares, performance awards or any combination of
the foregoing pursuant to the Plan. In addition, the plan provides that:

-  the aggregate number of shares of Class A common stock actually issued
   or transferred by the Company upon the exercise of incentive stock
   options shall not exceed 1,000,000 shares of Class A common stock;
-  no plan participant shall be granted option rights and appreciation
   rights, in the aggregate, for more than 1,000,000 shares of Class A
   common stock during any period of one year;
-  the number of shares issued as restricted shares shall not in the aggregate
   exceed 2,500,000 shares of Class A common stock;  and
-  no Non-Employee Director shall be granted option rights, appreciation
   rights and restricted shares, in the aggregate, for more than 100,000
   shares of Class A common stock during any fiscal year of the Company.

To date, the Company has not granted any SARs, deferred shares or performance
awards.

      Outstanding nonqualified stock options are exercisable during a
ten-year period beginning one to four years after the date of grant. All
currently outstanding options were granted with an exercise price equal to
either the fair market value on (a) the date of grant or (b) the optionee's
first date of employment with the Company. Changes in options outstanding are
summarized as follows:

<TABLE>
<CAPTION>

                                                                        Options Outstanding
                                            --------------------------------------------------------------
                                                                    Range of           Weighted-Average
                                                  Options        Exercise Prices         Exercise Price
  --------------------------------------- ------------------- --------------------- ----------------------
  <S>                                     <C>                 <C>                   <C>
  BALANCE, JUNE 30, 1999                           --                 --                       --
  --------------------------------------- ------------------- --------------------- ----------------------
  Granted                                       2,499,300          $2.88 - $16.00            $10.04
  --------------------------------------- ------------------- --------------------- ----------------------
  Exercised                                        --                   --                     --
  --------------------------------------- ------------------- --------------------- ----------------------
  Recaptured or terminated                     (2,351,300)         $4.72 - $16.00            $10.34
  --------------------------------------- ------------------- --------------------- ----------------------
  BALANCE, JUNE 30, 2000                          148,000          $2.88 - $ 8.00            $ 5.20
  --------------------------------------- ------------------- --------------------- ----------------------
</TABLE>

      There were no options exercisable at June 30, 2000. The following table
summarizes information regarding stock options outstanding at June 30, 2000.

<TABLE>
<CAPTION>

                                                            Options Outstanding
                                  -----------------------------------------------------------------------
                                                              Weighted-
                                                               Average
                                                              Remaining                    Weighted-
       Range of                          Options                 Life                  Average Exercise
   Exercise Options                    Outstanding            (in years)                     Price
-------------------------------- ---------------------- ------------------------- -----------------------
<S>                              <C>                    <C>                       <C>
 $ 2.88 - $2.91                        70,000                    9.82                       $2.89
 $ 4.00 - $6.00                        18,000                    9.61                       $4.96
 $ 7.75 - $8.00                        60,000                    9.46                       $7.98
                                       ------
  Total Options                       148,000                    9.65                       $5.20
-------------------------------- ---------------------- ------------------------- -----------------------
</TABLE>

      Using the Black-Scholes model and the following assumptions, the
average estimated fair value, at the dates of grant of options in fiscal year
2000, was $0.98 per option.

<TABLE>
<CAPTION>

                                                                                            2000
<S>                                                                               <C>
--------------------------------------------------------------------------------- -----------------------
Risk-free interest rate                                                                     6.2%
--------------------------------------------------------------------------------- -----------------------
Expected dividend yield                                                                       0%
--------------------------------------------------------------------------------- -----------------------
Expected volatility                                                                          75%
--------------------------------------------------------------------------------- -----------------------
Estimated lives of options (in years)                                                        4.0
--------------------------------------------------------------------------------- -----------------------
</TABLE>

      Based on the above assumptions, the Company would have recognized an
additional $9,000 of compensation expense in fiscal year 2000 if the
estimated costs of the granted stock options had been recorded in the
financial statements.

      Options granted throughout fiscal year 2000 vest equally each year over
a four year period from the date of grant. As a result, the estimated cost
indicated above reflects only a partial vesting of such options. If full
vesting were assumed, the estimated pro forma costs for the year would have
been higher than indicated above.

      The Company granted 1,355,000 restricted shares of Class A common stock
at a weighted-average fair value, at the dates of grant, of $2.87 in fiscal
year 2000 to key members of management. No restricted stock was granted prior
to fiscal year 2000. The Company recognized compensation expense in general
and administrative expenses of $160,000 in fiscal year 2000 related to the
grants of restricted stock.

                                    F-13

<PAGE>

NOTE 9.  SUPPLEMENTAL CASH FLOW INFORMATION

      Net cash provided by continuing operations reflects interest received
of $1.6 million in fiscal year 2000. Interest paid in fiscal years 1999 and
1998 was $142,000 and $177,000, respectively. No taxes have been paid or
refunded in fiscal year 2000. For fiscal years prior to fiscal 2000,
cumulative taxes since the acquisition of FTDA by IOS through the Company's
incorporation on May 19, 1999 of $10.7 million, representing $10.1 million of
tax benefits and $0.6 million of deferred taxes associated with a
distribution agreement, were settled through stockholder's net deficit.

NOTE 10. SELECTED QUARTERLY FINANCIAL DATA (unaudited and in thousands,
         except for earnings per share)

<TABLE>
<CAPTION>

                                                       First      Second    Third    Fourth   Fiscal
                                                      Quarter     Quarter  Quarter   Quarter   Year
                                                      -------    --------  -------  --------  --------
<S>                                                   <C>        <C>       <C>      <C>       <C>
2000:
Total revenue                                         $12,443    $ 23,588  $26,550  $ 35,624  $ 98,205
                                                      -------    --------  -------  --------  --------
Gross profit                                          $ 3,483    $  6,633  $ 7,659  $ 10,505  $ 28,280
                                                      -------    --------  -------  --------  --------
Net loss                                              $(3,850)   $(11,219) $(8,493) $(11,040) $(34,602)
                                                      =======    ========  =======  ========  ========
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:
Basic and diluted                                      41,018      47,234   47,300    47,964    45,879
                                                      =======    ========  =======  ========  ========
PER SHARE - BASIC AND DILUTED:
  Net loss                                            $ (0.09)   $  (0.24) $ (0.18) $  (0.23) $  (0.75)
                                                      =======    ========  =======  ========  ========

1999:
Total revenue                                         $ 6,105    $ 12,688  $12,390  $ 18,435  $ 49,618
                                                      -------    --------  -------  --------  --------
Gross profit                                          $ 1,245    $  2,818  $ 2,601  $  4,106  $ 10,770
                                                      -------    --------  -------  --------  --------
Net loss                                              $  (988)   $ (1,113) $(1,431) $ (1,915) $ (5,447)
                                                      -------    --------  -------  --------  --------
Net loss available to common stockholders             $  (988)   $ (1,113) $(1,431) $ (1,989) $ (5,521)
                                                      =======    ========  =======  ========  ========
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:
  Basic and diluted (a)                                40,920      40,920   40,920    40,920    40,920
                                                      =======    ========  =======  ========  ========
PER SHARE - BASIC AND DILUTED:
  Net loss                                            $ (0.02)   $  (0.03) $ (0.03) $  (0.05) $  (0.13)
                                                      =======    ========  =======  ========  ========
</TABLE>

(a) 1999 pro forma weighted average basic and diluted common shares
outstanding consist of 40,920,000 shares of common stock issued in
conjunction with the incorporation of the Company on May 19, 1999,
retroactively adjusted to reflect the 12-for-1 split of FTD.COM of FTD.COM
Class B common stock as discussed in Note 5.

       The sum of earnings per share for the quarters may not equal the
fiscal year amount due to rounding or to changes in the average shares
outstanding during the period.

                                    F-14

<PAGE>

                                 FTD.COM INC.

                               ----------------



                             FINANCIAL INFORMATION


                  FOR INCLUSION IN ANNUAL REPORT ON FORM 10-K


                        FISCAL YEAR ENDED JUNE 30, 2000

<PAGE>

                              EXHIBIT INDEX
<TABLE>
<CAPTION>

EXHIBIT
NO.                DESCRIPTION OF EXHIBIT
-------            -----------------------
<S>     <C>
 3.1      Certificate of Incorporation of the Company (incorporated by reference
          to Exhibit 3.1 to the Company's Registration Statement on Form S-1,
          as amended (Commission File No. 333-78857) (the "S-1")).

 3.2      Bylaws of the Company (incorporated by reference to Exhibit 3.3 to
          the S-1).

 4.1      Stockholders' Agreement, dated as of December 19, 1994, among Perry
          Acquisition Partners, L.P., the Co-Investors named therein and FTD
          Corporation (incorporated by reference to Exhibit 4.2 to the S-1).

 4.2      Form of Registration Right Agreements between FTDI and FTD.COM
          (incorporated by reference to Exhibit 4.4 to the S-1).

10.1      Form of Intercompany Services Agreement between FTDI and FTD.COM
          (incorporated by reference to Exhibit 10.2 to the S-1).

10.2      Form of Trademark License Agreement between FTDI and FTD.COM
          (incorporated by reference to Exhibit 10.3 to the S-1).

10.3      Form of Intercompany Indemnification Agreement among FTD Corporation,
          FTDI and FTD.COM (incorporated by reference to Exhibit 10.4 to the
          S-1).

10.4      Tax Sharing Agreement, dated as of December 19, 1994, between Perry
          Capital Corp. and FTDI (incorporated by reference to Exhibit 10.5 to
          the S-1).

10.5      Form of First Amendment to Tax Sharing Agreement among FTD
          Corporation, FTDI and FTD.COM (incorporated by reference to
          Exhibit 10.6 to the S-1).

10.6      Form of Florists Online Hosting Agreement between FTDI and FTD.COM
          (incorporated by reference to Exhibit 10.7 to the S-1).

10.7      Form of Commission Agreement between FTDI and FTD.COM (incorporated
          by reference to Exhibit 10.8 to the S-1).

10.8      Agreement and Plan of Merger, dated as of August 2, 1994, among
          Florists' Transworld Delivery Association, Perry Capital Corp. and
          IRIS Acquisition Corp. (incorporated by reference to Exhibit 10.9 to
          the S-1).

10.9      Mutual Support Agreement, dated as of December 18, 1994, between
          Florists' Transworld Delivery Association and FTD Association
          (incorporated by reference to Exhibit 10.10 to the S-1).

10.10     Supplemental Mutual Support Agreement, dated as of January 11, 1996,
          between Florists' Transworld Delivery Association and FTD Association
          (incorporated by reference to Exhibit 10.11 to the S-1).

10.11     Trademark License Agreement, dated as of December 18, 1994, between
          Florists' Transworld Delivery Association and FTD Association
          (incorporated by reference to Exhibit 10.12 to the S-1).

10.12*    Letter Agreement regarding employment of Michael J. Soenen, dated
          as of May 17, 2000.

10.13*    Letter Agreement regarding employment of Frederick K. Johnson, dated
          as of May 17, 2000.

10.14*    Letter Agreement regarding employment of William J. Van Cleave, dated
          as of May 17, 2000.

10.15*    Form of Confidentiality and Non-Competition Agreement between the
          Company and each of Michael J. Soenen, Frederick K. Johnson and
          William J. Van Cleave.

</TABLE>

                                      i

<PAGE>

<TABLE>

<S>     <C>

10.16*    FTD.COM 1999 Equity Incentive Plan (incorporated by reference to
          Exhibit 4.4 to the Company's Registration Statement on Form S-8
          (Commission File No. 333-39846) (the "S-8")).

10.17*    Form of Non-Qualified Stock Option Agreement (incorporated by
          reference to Exhibit 4.5 to the S-8).

10.18*    Form of Director Non-Qualified Stock Option Agreement, dated as of
          December 22, 1999, between the Company and each of Samuel I. Hill
          for 25,000 shares and Richard M. Owen for 25,000 shares
          (incorporated by reference to Exhibit 4.6 to the S-8).

10.19*    Form of Director Non-Qualified Stock Option Agreement, dated as of
          June 13, 2000, between the Company and each of Samuel I. Hill for
          15,000 shares and Richard M. Owen for 15,000 shares (incorporated by
          reference to Exhibit 4.6 to the S-8).

10.20*    Restricted Shares Agreement, dated as of May 17, 2000, between the
          Company and Michael J. Soenen.

10.21*    Restricted Shares Agreement, dated as of May 17, 2000, between the
          Company and Frederick K. Johnson.

10.22*    Form of Restricted Shares Agreement dated as of May 17, 2000,
          between the Company and each of William J. Van Cleave for 125,000
          restricted shares that become nonforfeitable as to one-third of such
          restricted shares on each anniversary of May 17, 2000 and Carrie A.
          Wolfe for 25,000 restricted shares that become nonforfeitable as to
          one-third of such restricted shares on each anniversary of May 17,
          2000 (incorporated by reference to Exhibit 4.7 to the S-8).

10.23*    Form of Restricted Shares Agreement, dated as of June 9, 2000,
          between the Company and Carrie A. Wolfe for 25,000 restricted
          shares that become nonforfeitable as to one-third of such
          restricted shares on each anniversary of June 9, 2000 (incorporated
          by reference to Exhibit 4.7 to the S-8).

10.24     APAC Teleservices Agreement, dated as of October 1, 1996, between
          FTDI and APAC Teleservices, Inc., assigned to FTD.COM by FTDI
          pursuant to the Formation Agreement, dated as of May 19, 1999,
          between FTDI and FTD.COM (incorporated by reference to Exhibit
          10.17 to the S-1).

23.1      Consent of KPMG LLP.

24.1      Powers of Attorney (contained in the signature page of this
          Form 10-K).

27.1      Financial Data Schedules.

</TABLE>

--------------------
* Management contract or compensatory arrangement.



                                          ii