##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-Q
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended March 31, 2007
 or
 o
    
    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: 001-32425
 (FTD GROUP, INC. LOGO)
 FTD
Group, Inc.
 (Exact name of registrant as specified in its charter)
 Delaware
(State or other jurisdiction of 
incorporation or organization)
    
    87-0719190
(I.R.S. Employer
Identification No.)
 3113 Woodcreek Drive
Downers Grove, IL 60515
(Address of principal executive offices)
 (630) 719-7800  )
 þ o
  o þ o
 o þ




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##### 



Part I. Financial InformationItem 1.
    
    Financial Statements (unaudited)Condensed Consolidated Balance Sheets
    
    
    2Condensed Consolidated Statements of Income and Comprehensive Income
    
    
    3Condensed Consolidated Statements of Cash Flows
    
    
    4Notes to Condensed Consolidated Financial Statements
    
    
    5Item 2.
    
    Managements Discussion and Analysis of Financial Condition and
Results of Operations
    
    
    14Item 3.
    
    Quantitative and Qualitative Disclosures about Market Risk
    
    
    23Item 4.
    
    Controls and Procedures
    
    
    23Part II. Other InformationItem 1.
    
    Legal Proceedings
    
    
    24Item 1A.
    
    Risk Factors
    
    
    24Item 2.
    
    Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    24Item 6.
    
    Exhibits
    
    
    24Signatures
    
    
    
    
    25Exhibit Index
    
    
    
    
    26302 Certification of Chief Executive Officer302 Certification of Chief Financial OfficerSection 906 Certification of CEO and CFO




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##### Table of Contents



PART I. FINANCIAL INFORMATION
 
 Item 1. Financial Statements
 
 FTD GROUP, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In thousands, except share amounts)
 March 31, 2007
    
    
    June 30, 2006ASSETSCurrent assets:Cash and cash equivalents
    
    $
    41,379
    
    
    $
    10,954Accounts receivable, less allowance for doubtful accounts of $5,047 at March 31, 2007 and
$4,437 at June 30, 2006
    
    
    47,649
    
    
    
    26,044Inventories, net
    
    
    3,998
    
    
    
    3,542Other current assets
    
    
    9,812
    
    
    
    5,985Total current assets
    
    
    102,838
    
    
    
    46,525Property and equipment:Property and equipment, at cost
    
    
    34,268
    
    
    
    25,265Less accumulated depreciation
    
    
    9,702
    
    
    
    6,051Property and equipment, net
    
    
    24,566
    
    
    
    19,214Other assets:Computer software, net
    
    
    13,509
    
    
    
    10,577Other noncurrent assets
    
    
    21,172
    
    
    
    21,405Intangible assets, less accumulated amortization of $8,345 at March 31, 2007 and $5,993 at June 30, 2006
    
    
    14,228
    
    
    
    14,780Trademarks
    
    
    186,504
    
    
    
    121,577Goodwill
    
    
    416,567
    
    
    
    336,659Total other assets
    
    
    651,980
    
    
    
    504,998Total assets
    
    $
    779,384
    
    
    $
    570,737LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities:Accounts payable
    
    $
    69,700
    
    
    $
    45,273Notes payable
    
    
    22,829
    
    
    
    Other accrued liabilities
    
    
    32,054
    
    
    
    24,083Current maturities of long-term debt
    
    
    1,430
    
    
    
    1,125Dividends payable
    
    
    4,699
    
    
    
    Total current liabilities
    
    
    130,712
    
    
    
    70,481Senior secured credit facility
    
    
    140,820
    
    
    
    48,875Senior subordinated notes
    
    
    170,117
    
    
    
    170,117Post-retirement benefits, accrued pension obligations and other liabilities
    
    
    5,066
    
    
    
    2,368Deferred income taxes
    
    
    83,116
    
    
    
    61,160Stockholders equity:Common stock: $0.01 par value, 75,000,000 shares authorized; 29,482,182 shares issued as
of March 31, 2007 and June 30, 2006
    
    
    295
    
    
    
    295Additional paid-in capital
    
    
    232,865
    
    
    
    233,362Retained earnings (accumulated deficit)
    
    
    14,912
    
    
    
    (1,554
    )Accumulated other comprehensive income
    
    
    6,675
    
    
    
    200Treasury stock, at cost, 541,447 shares as of March 31, 2007 and 1,504,480 shares
as of June 30, 2006
    
    
    (5,194
    )
    
    
    (14,567
    )Total stockholders equity
    
    
    249,553
    
    
    
    217,736Total liabilities and stockholders equity
    
    $
    779,384
    
    
    $
    570,737
  2




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##### Table of Contents



FTD GROUP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
(Unaudited)
(In thousands, except per share amounts)
 Three Months Ended
    
    
    Nine Months EndedMarch 31,
    
    
    March 31,2007
    
    
    2006
    
    
    2007
    
    
    2006Revenues:Products
    
    $
    143,483
    
    
    $
    95,736
    
    
    $
    333,184
    
    
    $
    232,925Services
    
    
    39,416
    
    
    
    32,849
    
    
    
    110,026
    
    
    
    90,714Total revenues
    
    
    182,899
    
    
    
    128,585
    
    
    
    443,210
    
    
    
    323,639Costs of products sold and services provided:Products
    
    
    108,168
    
    
    
    69,637
    
    
    
    248,714
    
    
    
    167,292Services
    
    
    3,435
    
    
    
    4,326
    
    
    
    12,630
    
    
    
    13,651Total costs of products sold and services provided
    
    
    111,603
    
    
    
    73,963
    
    
    
    261,344
    
    
    
    180,943Gross profit:Products
    
    
    35,315
    
    
    
    26,099
    
    
    
    84,470
    
    
    
    65,633Services
    
    
    35,981
    
    
    
    28,523
    
    
    
    97,396
    
    
    
    77,063Total gross profit
    
    
    71,296
    
    
    
    54,622
    
    
    
    181,866
    
    
    
    142,696Operating expenses:Advertising and selling
    
    
    27,348
    
    
    
    22,743
    
    
    
    68,767
    
    
    
    62,284General and administrative
    
    
    21,498
    
    
    
    15,048
    
    
    
    58,262
    
    
    
    38,444Total operating expenses
    
    
    48,846
    
    
    
    37,791
    
    
    
    127,029
    
    
    
    100,728Income from operations
    
    
    22,450
    
    
    
    16,831
    
    
    
    54,837
    
    
    
    41,968Other income and expenses:Interest income
    
    
    (489
    )
    
    
    (233
    )
    
    
    (1,126
    )
    
    
    (528
    )Interest expense
    
    
    6,444
    
    
    
    4,829
    
    
    
    21,679
    
    
    
    14,596Other expense (income), net
    
    
    570
    
    
    
    (118
    )
    
    
    (725
    )
    
    
    (206
    )Total other expenses, net
    
    
    6,525
    
    
    
    4,478
    
    
    
    19,828
    
    
    
    13,862Income before income tax
    
    
    15,925
    
    
    
    12,353
    
    
    
    35,009
    
    
    
    28,106Income tax expense
    
    
    6,310
    
    
    
    4,932
    
    
    
    13,844
    
    
    
    11,357Net income
    
    $
    9,615
    
    
    $
    7,421
    
    
    $
    21,165
    
    
    $
    16,749Other comprehensive income:Foreign currency translation adjustments
    
    
    88
    
    
    
    12
    
    
    
    6,475
    
    
    
    142Comprehensive income
    
    $
    9,703
    
    
    $
    7,433
    
    
    $
    27,640
    
    
    $
    16,891Net income per common share  basic
    
    $
    0.34
    
    
    $
    0.26
    
    
    $
    0.75
    
    
    $
    0.58Net income per common share  diluted
    
    $
    0.32
    
    
    $
    0.26
    
    
    $
    0.72
    
    
    $
    0.56Weighted average common shares outstanding:Basic
    
    
    28,462
    
    
    
    28,111
    
    
    
    28,343
    
    
    
    28,989Diluted
    
    
    29,827
    
    
    
    29,031
    
    
    
    29,510
    
    
    
    30,025Cash dividends declared per common share
    
    $
    0.1625
    
    
    $
    
    
    
    $
    0.1625
    
    
    $
    
  3




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##### Table of Contents



FTD GROUP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(In thousands)
 Nine Months EndedMarch 31,2007
    
    
    2006Cash flows from operating activities:Net income
    
    $
    21,165
    
    
    $
    16,749Adjustments to reconcile net income to net cash provided by operating activities:Depreciation and amortization
    
    
    10,890
    
    
    
    7,740Gain from sale of business and related transaction
    
    
    
    
    
    
    (991
    )Stock-based compensation expense
    
    
    1,451
    
    
    
    458Amortization and write off of deferred financing costs
    
    
    2,512
    
    
    
    1,204Provision for doubtful accounts
    
    
    2,088
    
    
    
    2,589Deferred income taxes
    
    
    2,706
    
    
    
    500All other, net of acquisition
    
    
    (3,419
    )
    
    
    (7,519
    )Net cash provided by operating activities
    
    
    37,393
    
    
    
    20,730Cash flows from investing activities:Acquisition of business, net of cash acquired
    
    
    (96,717
    )
    
    
    Capital expenditures
    
    
    (6,027
    )
    
    
    (7,370
    )Proceeds from sale of business
    
    
    
    
    
    
    3,500Net cash used in investing activities
    
    
    (102,744
    )
    
    
    (3,870
    )Cash flows from financing activities:Proceeds from issuance of long-term debt, net of financing costs
    
    
    148,536
    
    
    
    Repayments of long-term debt
    
    
    (57,750
    )
    
    
    (11,096
    )Excess tax benefit from stock-based compensation
    
    
    1,904
    
    
    
    217Proceeds from exercise of stock options
    
    
    2,315
    
    
    
    209Purchase of company stock
    
    
    
    
    
    
    (14,999
    )Net cash provided by (used in) financing activities
    
    
    95,005
    
    
    
    (25,669
    )Effect of foreign exchange rate changes on cash and cash equivalents
    
    
    771
    
    
    
    142Net increase (decrease) in cash and cash equivalents
    
    
    30,425
    
    
    
    (8,667
    )Cash and cash equivalents at beginning of period
    
    
    10,954
    
    
    
    8,890Cash and cash equivalents at end of period
    
    $
    41,379
    
    
    $
    223Supplemental disclosures of cash flow informationCash paid for:Interest
    
    $
    20,994
    
    
    $
    16,131Income taxes, net
    
    $
    13,356
    
    
    $
    4,570Non-cash disclosure:Issuance of notes payable associated with the purchase of Interflora Holdings Limited
    
    $
    23,313Issuance of treasury stock associated with the purchase of Interflora Holdings Limited
    
    $
    3,206Issuance of notes receivable associated with the sale of Renaissance
    
    
    
    
    
    $
    1,805
  4




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FTD Group, Inc.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
 Note 1. Description of the Business
 Basis of Presentation
      Recently Issued Accounting Pronouncements
 Employers Accounting for Defined Benefit Pension and Other
Postretirement Plans  an amendment of FASB Statement No. 87, 88, 106 and 132(R), (SFAS 158)
 Accounting for Uncertainty in
Income Taxes  an Interpretation of FASB Statement No. 109 (SFAS 109)
 5




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Note 2. Secondary Offering
   Note 3. Dividend Declared
  Note 4. Acquisition of Interflora Holdings Limited
   6




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Three Months Ended
    
    
    Nine Months EndedMarch 31,
    
    
    March 31,2006
    
    
    2007
    
    
    2006Proforma revenues
    
    $
    170,405
    
    
    $
    453,863
    
    
    $
    417,976Proforma income from operations
    
    $
    20,615
    
    
    $
    55,712
    
    
    $
    50,008Proforma net income
    
    $
    8,798
    
    
    $
    21,335
    
    
    $
    19,105Proforma net income per share  basic
    
    $
    0.31
    
    
    $
    0.75
    
    
    $
    0.65Proforma net income per share  diluted
    
    $
    0.30
    
    
    $
    0.72
    
    
    $
    0.63
  Goodwill
    
    $
    76,024Trademark
    
    
    61,764Computer software
    
    
    4,372Land and building
    
    
    2,942Other intangible assets (customer list)
    
    
    1,711Deferred tax liability
    
    
    (20,464
    )Other assets acquired and liabilities assumed, net
    
    
    (1,211
    )Total preliminary allocation of acquisition cost
    
    $
    125,138
   Note 5. Goodwill and Other Intangibles
   7




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Consumer
    
    
    Florist
    
    
    InternationalSegment
    
    
    Segment
    
    
    Segment
    
    
    TotalGoodwill:Balance at June 30, 2006
    
    $
    178,141
    
    
    $
    158,518
    
    
    $
    
    
    
    $
    336,659Acquisition of Interflora
    
    
    
    
    
    
    
    
    
    
    76,024
    
    
    
    76,024Impact of foreign exchange
    
    
    
    
    
    
    
    
    
    
    3,884
    
    
    
    3,884Balance at March 31, 2007
    
    $
    178,141
    
    
    $
    158,518
    
    
    $
    79,908
    
    
    $
    416,567Trademark:Balance at June 30, 2006
    
    $
    67,842
    
    
    $
    53,735
    
    
    $
    
    
    
    $
    121,577Acquisition of Interflora
    
    
    
    
    
    
    
    
    
    
    61,764
    
    
    
    61,764Impact of foreign exchange
    
    
    
    
    
    
    
    
    
    
    3,163
    
    
    
    3,163Balance at March 31, 2007
    
    $
    67,842
    
    
    $
    53,735
    
    
    $
    64,927
    
    
    $
    186,504
 March 31, 2007
    
    
    June 30, 2006Gross Carrying
    
    
    Accumulated
    
    
    Net
    
    
    Gross Carrying
    
    
    Accumulated
    
    
    NetAmount
    
    
    Amortization
    
    
    Carrying Amount
    
    
    Amount
    
    
    Amortization
    
    
    Carrying AmountAmortizable Intangible
Assets:Customer lists
    
    $
    14,636
    
    
    $
    8,267
    
    
    $
    6,369
    
    
    $
    12,836
    
    
    $
    5,940
    
    
    $
    6,896Non-compete agreements
    
    
    100
    
    
    
    78
    
    
    
    22
    
    
    
    100
    
    
    
    53
    
    
    
    47Total
    
    $
    14,736
    
    
    $
    8,345
    
    
    $
    6,391
    
    
    $
    12,936
    
    
    $
    5,993
    
    
    $
    6,943
  Estimated amortization expense (in thousands):For the remaining three-month period ending June 30, 2007
    
    $
    800For the year ending June 30, 2008
    
    $
    3,181For the year ending June 30, 2009
    
    $
    2,333For the year ending June 30, 2010
    
    $
    77
  Note 6. Financing Arrangements
    8




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Note 7. Net Income Per Common Share
  Three Months Ended
    
    
    Nine Months EndedMarch 31,
    
    
    March 31,2007
    
    
    2006
    
    
    2007
    
    
    2006Net income
    
    $
    9,615
    
    
    $
    7,421
    
    
    $
    21,165
    
    
    $
    16,749Weighted average common
shares outstanding  basic
    
    
    28,462
    
    
    
    28,111
    
    
    
    28,343
    
    
    
    28,989Effect of dilutive securities  stock options
    
    
    1,365
    
    
    
    920
    
    
    
    1,167
    
    
    
    1,036Weighted average common
shares outstanding  diluted
    
    
    29,827
    
    
    
    29,031
    
    
    
    29,510
    
    
    
    30,025Net income per share of Common Stock  basic
    
    $
    0.34
    
    
    $
    0.26
    
    
    $
    0.75
    
    
    $
    0.58Net income per share of Common Stock  diluted
    
    $
    0.32
    
    
    $
    0.26
    
    
    $
    0.72
    
    
    $
    0.56
  Note 8. Pension and Other Post-Retirement Benefit Plans
  9




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Salaried Employees Pension PlanThree Months Ended
    
    
    Nine Months EndedMarch 31,
    
    
    March 31,2007
    
    
    2006
    
    
    2007
    
    
    2006Service cost
    
    $
    13
    
    
    $
    13
    
    
    $
    39
    
    
    $
    41Interest cost
    
    
    26
    
    
    
    28
    
    
    
    78
    
    
    
    83Expected return on assets
    
    
    (23
    )
    
    
    (22
    )
    
    
    (69
    )
    
    
    (67
    )Amortization
    
    
    1
    
    
    
    9
    
    
    
    3
    
    
    
    27Net periodic benefit cost
    
    $
    17
    
    
    $
    28
    
    
    $
    51
    
    
    $
    84
  Retiree Medical PlanThree Months Ended
    
    
    Nine Months EndedMarch 31,
    
    
    March 31,2007
    
    
    2006
    
    
    2007
    
    
    2006Interest cost
    
    $
    22
    
    
    $
    20
    
    
    $
    66
    
    
    $
    60Net periodic benefit cost
    
    $
    22
    
    
    $
    20
    
    
    $
    66
    
    
    $
    60
 Note 9. Stock-Based Compensation
 Share-Based Payment
   Note 10. Commitments and Contingencies
  10




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Note 11. Segment Information
  www.ftd.com
  www.interflora.co.uk
    11




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Three Months Ended March 31,2007
    
    
    2006Gross Segment
    
    
    Eliminations
    
    
    Consolidated
    
    
    Gross Segment
    
    
    Eliminations
    
    
    Consolidated(in thousands)Revenues:Consumer segment
    
    $
    84,642
    
    
    $
    (4,426
    )
    
    $
    80,216
    
    
    $
    80,883
    
    
    $
    (5,203
    )
    
    $
    75,680Florist segment
    
    
    49,290
    
    
    
    (167
    )
    
    
    49,123
    
    
    
    52,979
    
    
    
    (74
    )
    
    
    52,905International segment
    
    
    53,476
    
    
    
    84
    
    
    
    53,560
    
    
    
    
    
    
    
    
    
    
    
    Total
    
    
    187,408
    
    
    
    (4,509
    )
    
    
    182,899
    
    
    
    133,862
    
    
    
    (5,277
    )
    
    
    128,585Cost of Products Sold and
Services Provided:Consumer segment
    
    
    57,721
    
    
    
    (741
    )
    
    
    56,980
    
    
    
    56,156
    
    
    
    (747
    )
    
    
    55,409Florist segment
    
    
    17,465
    
    
    
    (826
    )
    
    
    16,639
    
    
    
    18,849
    
    
    
    (828
    )
    
    
    18,021International segment
    
    
    37,528
    
    
    
    (37
    )
    
    
    37,491
    
    
    
    
    
    
    
    
    
    
    
    Corporate
    
    
    493
    
    
    
    
    
    
    
    493
    
    
    
    533
    
    
    
    
    
    
    
    533Total
    
    
    113,207
    
    
    
    (1,604
    )
    
    
    111,603
    
    
    
    75,538
    
    
    
    (1,575
    )
    
    
    73,963Gross Profit:Consumer segment
    
    
    26,921
    
    
    
    (3,685
    )
    
    
    23,236
    
    
    
    24,727
    
    
    
    (4,456
    )
    
    
    20,271Florist segment
    
    
    31,825
    
    
    
    659
    
    
    
    32,484
    
    
    
    34,130
    
    
    
    754
    
    
    
    34,884International segment
    
    
    15,948
    
    
    
    121
    
    
    
    16,069
    
    
    
    
    
    
    
    
    
    
    
    Corporate
    
    
    (493
    )
    
    
    
    
    
    
    (493
    )
    
    
    (533
    )
    
    
    
    
    
    
    (533
    )Total
    
    
    74,201
    
    
    
    (2,905
    )
    
    
    71,296
    
    
    
    58,324
    
    
    
    (3,702
    )
    
    
    54,622Advertising and Selling:Consumer segment
    
    
    11,346
    
    
    
    
    
    
    
    11,346
    
    
    
    10,401
    
    
    
    
    
    
    
    10,401Florist segment
    
    
    14,821
    
    
    
    (3,028
    )
    
    
    11,793
    
    
    
    16,044
    
    
    
    (3,702
    )
    
    
    12,342International segment
    
    
    4,292
    
    
    
    (83
    )
    
    
    4,209
    
    
    
    
    
    
    
    
    
    
    
    Total
    
    
    30,459
    
    
    
    (3,111
    )
    
    
    27,348
    
    
    
    26,445
    
    
    
    (3,702
    )
    
    
    22,743General and AdministrativeConsumer segment
    
    
    7,311
    
    
    
    (786
    )
    
    
    6,525
    
    
    
    6,881
    
    
    
    (735
    )
    
    
    6,146Florist segment
    
    
    2,052
    
    
    
    
    
    
    
    2,052
    
    
    
    2,377
    
    
    
    
    
    
    
    2,377International segment
    
    
    6,486
    
    
    
    61
    
    
    
    6,547
    
    
    
    
    
    
    
    
    
    
    
    Corporate
    
    
    5,588
    
    
    
    786
    
    
    
    6,374
    
    
    
    5,790
    
    
    
    735
    
    
    
    6,525Total
    
    
    21,437
    
    
    
    61
    
    
    
    21,498
    
    
    
    15,048
    
    
    
    
    
    
    
    15,048Operating Income (Loss)
before Corporate Allocations:Consumer segment
    
    
    8,264
    
    
    
    (2,899
    )
    
    
    5,365
    
    
    
    7,445
    
    
    
    (3,721
    )
    
    
    3,724Florist segment
    
    
    14,952
    
    
    
    3,687
    
    
    
    18,639
    
    
    
    15,709
    
    
    
    4,456
    
    
    
    20,165International segment
    
    
    5,170
    
    
    
    143
    
    
    
    5,313
    
    
    
    
    
    
    
    
    
    
    
    Corporate
    
    
    (6,081
    )
    
    
    (786
    )
    
    
    (6,867
    )
    
    
    (6,323
    )
    
    
    (735
    )
    
    
    (7,058
    )Total
    
    
    22,305
    
    
    
    145
    
    
    
    22,450
    
    
    
    16,831
    
    
    
    
    
    
    
    16,831Corporate Allocations:Consumer segment
    
    
    1,151
    
    
    
    
    
    
    
    1,151
    
    
    
    849
    
    
    
    
    
    
    
    849Florist segment
    
    
    2,284
    
    
    
    
    
    
    
    2,284
    
    
    
    2,868
    
    
    
    
    
    
    
    2,868International segment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Corporate
    
    
    (3,435
    )
    
    
    
    
    
    
    (3,435
    )
    
    
    (3,717
    )
    
    
    
    
    
    
    (3,717
    )Total
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Operating Income (Loss):Consumer segment
    
    
    7,113
    
    
    
    (2,899
    )
    
    
    4,214
    
    
    
    6,596
    
    
    
    (3,721
    )
    
    
    2,875Florist segment
    
    
    12,668
    
    
    
    3,687
    
    
    
    16,355
    
    
    
    12,841
    
    
    
    4,456
    
    
    
    17,297International segment
    
    
    5,170
    
    
    
    143
    
    
    
    5,313
    
    
    
    
    
    
    
    
    
    
    
    Corporate
    
    
    (2,646
    )
    
    
    (786
    )
    
    
    (3,432
    )
    
    
    (2,606
    )
    
    
    (735
    )
    
    
    (3,341
    )Total
    
    $
    22,305
    
    
    $
    145
    
    
    $
    22,450
    
    
    $
    16,831
    
    
    $
    
    
    
    $
    16,831Depreciation and
Amortization:Consumer segment
    
    $
    950
    
    
    $
    
    
    
    $
    950
    
    
    $
    836
    
    
    $
    
    
    
    $
    836Florist segment
    
    
    799
    
    
    
    
    
    
    
    799
    
    
    
    821
    
    
    
    
    
    
    
    821International segment
    
    
    1,078
    
    
    
    
    
    
    
    1,078
    
    
    
    
    
    
    
    
    
    
    
    Corporate
    
    
    862
    
    
    
    
    
    
    
    862
    
    
    
    967
    
    
    
    
    
    
    
    967Total
    
    $
    3,689
    
    
    $
    
    
    
    $
    3,689
    
    
    $
    2,624
    
    
    $
    
    
    
    $
    2,624
 12




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##### Table of Contents



Nine Months Ended March 31,2007
    
    
    2006Gross Segment
    
    
    Eliminations
    
    
    Consolidated
    
    
    Gross Segment
    
    
    Eliminations
    
    
    Consolidated(in thousands)Revenues:Consumer segment
    
    $
    209,451
    
    
    $
    (12,367
    )
    
    $
    197,084
    
    
    $
    193,836
    
    
    $
    (13,315
    )
    
    $
    180,521Florist segment
    
    
    137,873
    
    
    
    (351
    )
    
    
    137,522
    
    
    
    143,323
    
    
    
    (205
    )
    
    
    143,118International segment
    
    
    108,422
    
    
    
    182
    
    
    
    108,604
    
    
    
    
    
    
    
    
    
    
    
    Total
    
    
    455,746
    
    
    
    (12,536
    )
    
    
    443,210
    
    
    
    337,159
    
    
    
    (13,520
    )
    
    
    323,639Cost of Products Sold and
Services Provided:Consumer segment
    
    
    142,335
    
    
    
    (1,868
    )
    
    
    140,467
    
    
    
    134,073
    
    
    
    (1,809
    )
    
    
    132,264Florist segment
    
    
    46,664
    
    
    
    (2,497
    )
    
    
    44,167
    
    
    
    49,485
    
    
    
    (2,524
    )
    
    
    46,961International segment
    
    
    75,280
    
    
    
    (77
    )
    
    
    75,203
    
    
    
    
    
    
    
    
    
    
    
    Corporate
    
    
    1,507
    
    
    
    
    
    
    
    1,507
    
    
    
    1,718
    
    
    
    
    
    
    
    1,718Total
    
    
    265,786
    
    
    
    (4,442
    )
    
    
    261,344
    
    
    
    185,276
    
    
    
    (4,333
    )
    
    
    180,943Gross Profit:Consumer segment
    
    
    67,116
    
    
    
    (10,499
    )
    
    
    56,617
    
    
    
    59,763
    
    
    
    (11,506
    )
    
    
    48,257Florist segment
    
    
    91,209
    
    
    
    2,146
    
    
    
    93,355
    
    
    
    93,838
    
    
    
    2,319
    
    
    
    96,157International segment
    
    
    33,142
    
    
    
    259
    
    
    
    33,401
    
    
    
    
    
    
    
    
    
    
    
    Corporate
    
    
    (1,507
    )
    
    
    
    
    
    
    (1,507
    )
    
    
    (1,718
    )
    
    
    
    
    
    
    (1,718
    )Total
    
    
    189,960
    
    
    
    (8,094
    )
    
    
    181,866
    
    
    
    151,883
    
    
    
    (9,187
    )
    
    
    142,696Advertising and Selling:Consumer segment
    
    
    25,087
    
    
    
    
    
    
    
    25,087
    
    
    
    22,768
    
    
    
    
    
    
    
    22,768Florist segment
    
    
    43,395
    
    
    
    (8,353
    )
    
    
    35,042
    
    
    
    48,703
    
    
    
    (9,187
    )
    
    
    39,516International segment
    
    
    8,834
    
    
    
    (196
    )
    
    
    8,638
    
    
    
    
    
    
    
    
    
    
    
    Total
    
    
    77,316
    
    
    
    (8,549
    )
    
    
    68,767
    
    
    
    71,471
    
    
    
    (9,187
    )
    
    
    62,284General and AdministrativeConsumer segment
    
    
    18,690
    
    
    
    (1,940
    )
    
    
    16,750
    
    
    
    15,407
    
    
    
    (1,785
    )
    
    
    13,622Florist segment
    
    
    6,348
    
    
    
    
    
    
    
    6,348
    
    
    
    5,607
    
    
    
    
    
    
    
    5,607International segment
    
    
    15,231
    
    
    
    318
    
    
    
    15,549
    
    
    
    
    
    
    
    
    
    
    
    Corporate
    
    
    17,675
    
    
    
    1,940
    
    
    
    19,615
    
    
    
    17,430
    
    
    
    1,785
    
    
    
    19,215Total
    
    
    57,944
    
    
    
    318
    
    
    
    58,262
    
    
    
    38,444
    
    
    
    
    
    
    
    38,444Operating Income (Loss)
before Corporate Allocations:Consumer segment
    
    
    23,339
    
    
    
    (8,559
    )
    
    
    14,780
    
    
    
    21,588
    
    
    
    (9,721
    )
    
    
    11,867Florist segment
    
    
    41,466
    
    
    
    10,499
    
    
    
    51,965
    
    
    
    39,528
    
    
    
    11,506
    
    
    
    51,034International segment
    
    
    9,077
    
    
    
    137
    
    
    
    9,214
    
    
    
    
    
    
    
    
    
    
    
    Corporate
    
    
    (19,182
    )
    
    
    (1,940
    )
    
    
    (21,122
    )
    
    
    (19,148
    )
    
    
    (1,785
    )
    
    
    (20,933
    )Total
    
    
    54,700
    
    
    
    137
    
    
    
    54,837
    
    
    
    41,968
    
    
    
    
    
    
    
    41,968Corporate Allocations:Consumer segment
    
    
    3,021
    
    
    
    
    
    
    
    3,021
    
    
    
    2,451
    
    
    
    
    
    
    
    2,451Florist segment
    
    
    7,007
    
    
    
    
    
    
    
    7,007
    
    
    
    8,364
    
    
    
    
    
    
    
    8,364International segment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Corporate
    
    
    (10,028
    )
    
    
    
    
    
    
    (10,028
    )
    
    
    (10,815
    )
    
    
    
    
    
    
    (10,815
    )Total
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Operating Income (Loss):Consumer segment
    
    
    20,318
    
    
    
    (8,559
    )
    
    
    11,759
    
    
    
    19,137
    
    
    
    (9,721
    )
    
    
    9,416Florist segment
    
    
    34,459
    
    
    
    10,499
    
    
    
    44,958
    
    
    
    31,164
    
    
    
    11,506
    
    
    
    42,670International segment
    
    
    9,077
    
    
    
    137
    
    
    
    9,214
    
    
    
    
    
    
    
    
    
    
    
    Corporate
    
    
    (9,154
    )
    
    
    (1,940
    )
    
    
    (11,094
    )
    
    
    (8,333
    )
    
    
    (1,785
    )
    
    
    (10,118
    )Total
    
    $
    54,700
    
    
    $
    137
    
    
    $
    54,837
    
    
    $
    41,968
    
    
    $
    
    
    
    $
    41,968Depreciation and
Amortization:Consumer segment
    
    $
    2,883
    
    
    $
    
    
    
    $
    2,883
    
    
    $
    2,293
    
    
    $
    
    
    
    $
    2,293Florist segment
    
    
    2,430
    
    
    
    
    
    
    
    2,430
    
    
    
    2,551
    
    
    
    
    
    
    
    2,551International segment
    
    
    2,783
    
    
    
    
    
    
    
    2,783
    
    
    
    
    
    
    
    
    
    
    
    Corporate
    
    
    2,794
    
    
    
    
    
    
    
    2,794
    
    
    
    2,896
    
    
    
    
    
    
    
    2,896Total
    
    $
    10,890
    
    
    $
    
    
    
    $
    10,890
    
    
    $
    7,740
    
    
    $
    
    
    
    $
    7,740
 13




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##### Table of Contents



Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
 Forward-Looking Information
   Overview
   Consumer Segment. www.ftd.com
 14




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##### Table of Contents



Florist Segment.
 International Segment
 Corporate Segment.
 Seasonality.
  Three Months Ended March 31, 2007 compared to the Three Months Ended March 31, 2006
 Total revenues
 Three Months EndedMarch 31,2007
    
    
    2006
    
    
    % Change(in thousands)Consumer segment
    
    $
    80,216
    
    
    $
    75,680
    
    
    
    6.0
    %Florist segment
    
    
    49,123
    
    
    
    52,905
    
    
    
    (7.1
    %)International segment
    
    
    53,560
    
    
    
    
    
    
    
    N/ATotal revenues
    
    $
    182,899
    
    
    $
    128,585
    
    
    
    42.2
    %
    15




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##### Table of Contents



Total gross profit
 Three Months EndedMarch 31,2007
    
    
    2006
    
    
    % Change(in thousands)Consumer segment
    
    $
    23,236
    
    
    $
    20,271
    
    
    
    14.6
    %Florist segment
    
    
    32,484
    
    
    
    34,884
    
    
    
    (6.9
    %)International segment
    
    
    16,069
    
    
    
    
    
    
    
    N/ACorporate
    
    
    (493
    )
    
    
    (533
    )
    
    
    (7.5
    %)Total gross profit
    
    $
    71,296
    
    
    $
    54,622
    
    
    
    30.5
    %
      Advertising and selling costs
 Three Months EndedMarch 31,2007
    
    
    2006
    
    
    % Change(in thousands)Consumer segment
    
    $
    11,346
    
    
    $
    10,401
    
    
    
    9.1
    %Florist segment
    
    
    11,793
    
    
    
    12,342
    
    
    
    (4.4
    %)International segment
    
    
    4,209
    
    
    
    
    
    
    
    N/ATotal advertising and selling costs
    
    $
    27,348
    
    
    $
    22,743
    
    
    
    20.2
    %
  16




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##### Table of Contents



General and administrative costs
 Three Months EndedMarch 31,2007
    
    
    2006
    
    
    % Change(in thousands)Consumer segment
    
    $
    6,525
    
    
    $
    6,146
    
    
    
    6.2
    %Florist segment
    
    
    2,052
    
    
    
    2,377
    
    
    
    (13.7
    %)International segment
    
    
    6,547
    
    
    
    
    
    
    
    N/ACorporate
    
    
    6,374
    
    
    
    6,525
    
    
    
    (2.3
    %)Total general and administrative costs
    
    $
    21,498
    
    
    $
    15,048
    
    
    
    42.9
    %
      17




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##### Table of Contents



Other income and expenses
 Three Months EndedMarch 31,2007
    
    
    2006
    
    
    % Change(in thousands)Interest income
    
    $
    (489
    )
    
    $
    (233
    )
    
    
    109.9
    %Interest expense
    
    
    6,444
    
    
    
    4,829
    
    
    
    33.4
    %Other expense (income), net
    
    
    570
    
    
    
    (118
    )
    
    
    (583.1
    %)Total other expenses, net
    
    $
    6,525
    
    
    $
    4,478
    
    
    
    45.7
    %
    Nine Months Ended March 31, 2007 compared to the Nine Months Ended March 31, 2006
  Total revenues
 Nine Months EndedMarch 31,2007
    
    
    2006
    
    
    % Change(in thousands)Consumer segment
    
    $
    197,084
    
    
    $
    180,521
    
    
    
    9.2
    %Florist segment
    
    
    137,522
    
    
    
    143,118
    
    
    
    (3.9
    %)International segment
    
    
    108,604
    
    
    
    
    
    
    
    N/ATotal revenues
    
    $
    443,210
    
    
    $
    323,639
    
    
    
    36.9
    %
    18




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##### Table of Contents



Total gross profit
 Nine Months EndedMarch 31,2007
    
    
    2006
    
    
    % Change(in thousands)Consumer segment
    
    $
    56,617
    
    
    $
    48,257
    
    
    
    17.3
    %Florist segment
    
    
    93,355
    
    
    
    96,157
    
    
    
    (2.9
    %)International segment
    
    
    33,401
    
    
    
    
    
    
    
    N/ACorporate
    
    
    (1,507
    )
    
    
    (1,718
    )
    
    
    (12.3
    %)Total gross profit
    
    $
    181,866
    
    
    $
    142,696
    
    
    
    27.4
    %
      19




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##### Table of Contents



Advertising and selling costs
 Nine Months EndedMarch 31,2007
    
    
    2006
    
    
    % Change(in thousands)Consumer segment
    
    $
    25,087
    
    
    $
    22,768
    
    
    
    10.2
    %Florist segment
    
    
    35,042
    
    
    
    39,516
    
    
    
    (11.3
    %)International segment
    
    
    8,638
    
    
    
    
    
    
    
    N/ATotal advertising and selling costs
    
    $
    68,767
    
    
    $
    62,284
    
    
    
    10.4
    %
     General and administrative costs
 Nine Months EndedMarch 31,2007
    
    
    2006
    
    
    % Change(in thousands)Consumer segment
    
    $
    16,750
    
    
    $
    13,622
    
    
    
    23.0
    %Florist segment
    
    
    6,348
    
    
    
    5,607
    
    
    
    13.2
    %International segment
    
    
    15,549
    
    
    
    
    
    
    
    N/ACorporate
    
    
    19,615
    
    
    
    19,215
    
    
    
    2.1
    %Total general and administrative costs
    
    $
    58,262
    
    
    $
    38,444
    
    
    
    51.6
    %
   20




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##### Table of Contents



Other income and expenses
 Nine Months EndedMarch 31,2007
    
    
    2006
    
    
    % Change(in thousands)Interest income
    
    $
    (1,126
    )
    
    $
    (528
    )
    
    
    113.3
    %Interest expense
    
    
    21,679
    
    
    
    14,596
    
    
    
    48.5
    %Other expense (income), net
    
    
    (725
    )
    
    
    (206
    )
    
    
    251.9
    %Total other expenses, net
    
    $
    19,828
    
    
    $
    13,862
    
    
    
    43.0
    %
    Liquidity and Capital Resources
   21




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##### Table of Contents



Critical Accounting Policies and Estimates
   22




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##### Table of Contents



Item 3. Quantitative and Qualitative Disclosures about Market Risk
    
 Item 4. Controls and Procedures
 Evaluation of Disclosure Controls and Procedures
  Changes in Internal Control over Financial Reporting
  23




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##### Table of Contents



PART II. OTHER INFORMATION
 
 Item 1. Legal Proceedings
  
 Item 1A. Risk Factors
  
 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
     
 Item 6. Exhibits
 31.1
    
    Certification of Chief Executive Officer pursuant to Section 302 of
Sarbanes-Oxley Act of 2002.31.2
    
    Certification of Chief Financial Officer pursuant to Section 302 of
Sarbanes-Oxley Act of 2002.32
    
    Certifications of Chief Executive Officer and Chief Financial Officer pursuant
to Section 906 of the Sarbanes-Oxley Act of 2002.
 24




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##### Table of Contents



SIGNATURES
  FTD Group, Inc.Date:  May 9, 2007
    By:
    /S/ BECKY A. SHEEHANBecky A. SheehanChief Financial Officer
(principal financial officer) 25




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##### Table of Contents



EXHIBIT INDEX
 Exhibit Number
    
    Description of Document31.1
    
    Certification of Chief Executive Officer pursuant to Section 302 of
Sarbanes-Oxley Act of 2002.31.2
    
    Certification of Chief Financial Officer pursuant to Section 302 of
Sarbanes-Oxley Act of 2002.32
    
    Certifications of Chief Executive Officer and Chief Financial Officer pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002.
 26