##### 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 December 31, 2007
 or
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
 For the transition period fromto
 Commission File Number: 001-32425
 
 FTD Group, Inc.
 (Exact name of registrant as specified in its charter)
 Delaware
    
    87-0719190(State or other jurisdiction of
    
    (I.R.S. Employerincorporation or organization)
    
    Identification No.)
 3113 Woodcreek Drive
Downers Grove, IL 60515
(Address of principal executive offices)
 (630) 719-7800  )
   o þ o
 o þ




---



##### 



Part I. Financial InformationItem 1. Financial StatementsCondensed 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
    
    
    13Item 3. Quantitative and Qualitative Disclosures about Market Risk
    
    
    22Item 4. Controls and Procedures
    
    
    22Part II. Other InformationItem 1. Legal Proceedings
    
    
    23Item 1A. Risk Factors
    
    
    23Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    23Item 4. Submission of Matters to a Vote of Security Holders
    
    
    24Item 6. Exhibits
    
    
    24Signature
    
    
    25Index of Exhibits
    
    
    26302 Certification of Chief Executive Officer302 Certification of Chief Financial Officer906 Certification of CEO and CFO




---



##### Table of Contents



PART I. FINANCIAL INFORMATION
 
 Item 1. Financial Statements
 FTD GROUP, INC.
 
 CONDENSED CONSOLIDATED BALANCE SHEETS
 (In thousands)
 December 31, 2007
    
    
    June 30, 2007(Unaudited)ASSETSCurrent Assets:Cash and cash equivalents
    
    $
    27,548
    
    
    $
    25,462Accounts receivable, less allowance for doubtful accounts of $6,329 at December 31, 2007 and $5,431 at June 30, 2007
    
    
41,071
    
    
    
    32,416Inventories, net
    
    
    5,802
    
    
    
    3,694Other current assets
    
    
    14,253
    
    
    
    9,500Total Current Assets
    
    
    88,674
    
    
    
    71,072Property and Equipment:Property and equipment
    
    
    37,082
    
    
    
    35,791Less accumulated depreciation
    
    
    13,257
    
    
    
    11,018Property and Equipment, net
    
    
    23,825
    
    
    
    24,773Other Assets:Computer software, net
    
    
    12,441
    
    
    
    12,699Other noncurrent assets
    
    
    23,038
    
    
    
    21,085Other intangible assets, less accumulated amortization of$10,757 at December 31, 2007 and $9,154 at June 30, 2007
    
    
    11,848
    
    
    
    13,454Trademarks
    
    
    187,598
    
    
    
    187,816Goodwill
    
    
    417,734
    
    
    
    418,001Total Other Assets
    
    
    652,659
    
    
    
    653,055Total Assets
    
    $
    765,158
    
    
    $
    748,900LIABILITIES AND STOCKHOLDERS EQUITYCurrent Liabilities:Accounts payable
    
    $
    64,473
    
    
    $
    52,009Current income taxes payable
    
    
    6,308
    
    
    
    1,671Other accrued liabilities
    
    
    31,550
    
    
    
    26,840Current maturities of long-term debt
    
    
    1,318
    
    
    
    8,475Dividends payable
    
    
    4,843
    
    
    
    4,707Total Current Liabilities
    
    
    108,492
    
    
    
    93,702Senior secured credit facility
    
    
    128,832
    
    
    
    133,418Senior subordinated notes
    
    
    170,117
    
    
    
    170,117Post-retirement benefits, accrued pension obligations and other liabilities
    
    
    3,509
    
    
    
    4,535Deferred income taxes
    
    
    78,666
    
    
    
    85,350Stockholders Equity:Common stock: $0.01 par value, 75,000 shares authorized; 29,818 shares issued
as of December 31, 2007 and 29,482 shares issued as of June 30, 2007
    
    
    298
    
    
    
    295Additional paid-in capital
    
    
    236,577
    
    
    
    235,589Retained earnings
    
    
    29,159
    
    
    
    20,952Accumulated other comprehensive income
    
    
    9,706
    
    
    
    9,933Treasury stock, at cost, 20 shares as of December 31, 2007 and 519 shares as of June 30, 2007
    
    
    (198
    )
    
    
    (4,991
    )Total Stockholders Equity
    
    
    275,542
    
    
    
    261,778Total Liabilities and Stockholders Equity
    
    $
    765,158
    
    
    $
    748,900
  2




---



##### Table of Contents



FTD GROUP, INC.
 
 CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
 (Unaudited)
(In thousands, except per share amounts)
 Three Months Ended
    
    
    Six Months EndedDecember 31,
    
    
    December 31,2007
    
    
    2006
    
    
    2007
    
    
    2006Revenues:Products
    
    $
    114,967
    
    
    $
    115,828
    
    
    $
    203,825
    
    
    $
    189,701Services
    
    
    40,522
    
    
    
    35,712
    
    
    
    75,409
    
    
    
    70,610Total revenues
    
    
    155,489
    
    
    
    151,540
    
    
    
    279,234
    
    
    
    260,311Costs of Products Sold and Services Provided:Products
    
    
    87,216
    
    
    
    84,392
    
    
    
    153,949
    
    
    
    140,546Services
    
    
    4,745
    
    
    
    4,926
    
    
    
    9,181
    
    
    
    9,195Total costs of products sold and services provided
    
    
    91,961
    
    
    
    89,318
    
    
    
    163,130
    
    
    
    149,741Gross Profit:Products
    
    
    27,751
    
    
    
    31,436
    
    
    
    49,876
    
    
    
    49,155Services
    
    
    35,777
    
    
    
    30,786
    
    
    
    66,228
    
    
    
    61,415Total gross profit
    
    
    63,528
    
    
    
    62,222
    
    
    
    116,104
    
    
    
    110,570Operating Expenses:Advertising and selling
    
    
    22,936
    
    
    
    24,855
    
    
    
    39,588
    
    
    
    41,419General and administrative
    
    
    20,432
    
    
    
    20,354
    
    
    
    39,503
    
    
    
    36,764Total operating expenses
    
    
    43,368
    
    
    
    45,209
    
    
    
    79,091
    
    
    
    78,183Income from operations
    
    
    20,160
    
    
    
    17,013
    
    
    
    37,013
    
    
    
    32,387Other Income and Expenses:Interest income
    
    
    (319
    )
    
    
    (339
    )
    
    
    (621
    )
    
    
    (637
    )Interest expense
    
    
    6,155
    
    
    
    7,009
    
    
    
    12,542
    
    
    
    15,235Other (income) expense, net
    
    
    (138
    )
    
    
    249
    
    
    
    (348
    )
    
    
    (1,295
    )Total other income and expenses
    
    
    5,698
    
    
    
    6,919
    
    
    
    11,573
    
    
    
    13,303Income before income tax expense
    
    
    14,462
    
    
    
    10,094
    
    
    
    25,440
    
    
    
    19,084Income tax expense
    
    
    5,496
    
    
    
    3,987
    
    
    
    8,318
    
    
    
    7,534Net income
    
    $
    8,966
    
    
    $
    6,107
    
    
    $
    17,122
    
    
    $
    11,550Other Comprehensive Income (Loss):Foreign currency translation adjustments
    
    
    (3,116
    )
    
    
    3,987
    
    
    
    (227
    )
    
    
    6,387Comprehensive income
    
    $
    5,850
    
    
    $
    10,094
    
    
    $
    16,895
    
    
    $
    17,937Net income per Common Share  basic
    
    $
    0.30
    
    
    $
    0.22
    
    
    $
    0.58
    
    
    $
    0.41Net income per Common Share  diluted
    
    $
    0.30
    
    
    $
    0.21
    
    
    $
    0.58
    
    
    $
    0.39Weighted Average Common Shares Outstanding:Basic
    
    
    29,509
    
    
    
    28,335
    
    
    
    29,287
    
    
    
    28,283Diluted
    
    
    29,758
    
    
    
    29,762
    
    
    
    29,653
    
    
    
    29,479Cash Dividends Declared per Common Share
    
    $
    0.1625
    
    
    $
    
    
    
    $
    0.3250
    
    
    $
    
  3




---



##### Table of Contents



FTD GROUP, INC.
 
 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
 (Unaudited)
(In thousands)
 Six Months EndedDecember 31,2007
    
    
    2006Cash Flows from Operating Activities:Net income
    
    $
    17,122
    
    
    $
    11,550Adjustments to reconcile net income to net cash
provided by operating activities:Depreciation and amortization
    
    
    6,419
    
    
    
    7,201Stock-based compensation expense
    
    
    1,314
    
    
    
    959Amortization and write off of deferred financing costs
    
    
    470
    
    
    
    2,294Provision for doubtful accounts
    
    
    1,862
    
    
    
    1,481Deferred income taxes
    
    
    (6,575
    )
    
    
    753Excess tax benefit from stock-based compensation
    
    
    (2,308
    )
    
    
    (654
    )(Decrease) increase due to changes in operating assets and liabilities, net of acquisition:Accounts receivable
    
    
    (10,499
    )
    
    
    (9,072
    )Inventories
    
    
    (2,112
    )
    
    
    (1,531
    )Prepaid expenses and other
    
    
    (4,102
    )
    
    
    (6,052
    )Other noncurrent assets
    
    
    (2,550
    )
    
    
    (1,133
    )Accounts payable
    
    
    11,753
    
    
    
    12,373Other accrued liabilities
    
    
    11,432
    
    
    
    794Net cash provided by operating activities
    
    
    22,226
    
    
    
    18,963Cash Flows from Investing Activities:Capital expenditures
    
    
    (3,622
    )
    
    
    (4,849
    )Acquisition of business, net of cash acquired
    
    
    
    
    
    
    (96,717
    )Net cash used in investing activities
    
    
    (3,622
    )
    
    
    (101,566
    )Cash Flows from Financing Activities:Repayments of long-term debt
    
    
    (11,743
    )
    
    
    (50,375
    )Dividends paid
    
    
    (9,515
    )
    
    
    Proceeds from exercise of stock options
    
    
    2,156
    
    
    
    422Excess tax benefit from stock-based compensation
    
    
    2,308
    
    
    
    654Proceeds from issuance of long-term debt, net of financing costs
    
    
    
    
    
    
    148,536Proceeds from issuance of common stock
    
    
    6
    
    
    
    Net cash (used in) provided by financing activities
    
    
    (16,788
    )
    
    
    99,237Effect of foreign exchange rate changes on cash and cash equivalents
    
    
    270
    
    
    
    3,172Net increase in cash and cash equivalents
    
    
    2,086
    
    
    
    19,806Cash and cash equivalents at beginning of period
    
    
    25,462
    
    
    
    10,954Cash and cash equivalents at end of period
    
    $
    27,548
    
    
    $
    30,760Supplemental disclosures of cash flow informationNon-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
    
    $
    
    
    
    $
    3,206
  4




---



##### Table of Contents



FTD Group, Inc.
 
 Notes to Condensed Consolidated Financial Statements
 (Unaudited)
 Note 1. Description of the Business
 Basis of Presentation
     Recently Issued Accounting Pronouncements
 Business Combinations
 Noncontrolling Interests in Consolidated
Financial Statementsan amendment of Accounting Research Bulletin No. 51
 5




---



##### Table of Contents



The Fair Value Option for Financial Assets and
Financial Liabilities  Including an amendment of FASB Statement
No. 115
 Fair
Value Measurements
 Note 2. Acquisition of Interflora Holdings Limited
  6




---



##### Table of Contents



Six Months EndedDecember 31,2006Pro forma revenues
    
    $
    270,964Pro forma income from operations
    
    $
    33,262Pro forma net income
    
    $
    11,720Pro forma net income per share  basic
    
    $
    0.41Pro forma net income per share  diluted
    
    $
    0.40
  Note 3. Income Taxes
  Accounting for
Uncertainty in Income Taxes  an interpretation of FASB Statement No. 109
 7




---



##### Table of Contents



Note 4. Financing Arrangements
      8




---



##### Table of Contents



Note 5. Net Income Per Common Share
  Three Months Ended
    
    
    Six Months EndedDecember 31,
    
    
    December 31,2007
    
    
    2006
    
    
    2007
    
    
    2006Net income
    
    $
    8,966
    
    
    $
    6,107
    
    
    $
    17,122
    
    
    $
    11,550Weighted average common
shares outstanding  basic
    
    
    29,509
    
    
    
    28,335
    
    
    
    29,287
    
    
    
    28,283Effect of dilutive securities  stock options
and restricted stock
    
    
    249
    
    
    
    1,427
    
    
    
    366
    
    
    
    1,196Weighted average common
shares outstanding  diluted
    
    
    29,758
    
    
    
    29,762
    
    
    
    29,653
    
    
    
    29,479Net income per share of Common Stock  basic
    
    $
    0.30
    
    
    $
    0.22
    
    
    $
    0.58
    
    
    $
    0.41Net income per share of Common Stock -
diluted
    
    $
    0.30
    
    
    $
    0.21
    
    
    $
    0.58
    
    
    $
    0.39
  Note 6. Stock-Based Compensation
    Note 7. Commitments and Contingencies
  9




---



##### Table of Contents



Note 8. Segment Information
    , www.ftd.com
  www.interflora.co.uk
  December 31,2007
    
    
    2006Consumer segment
    
    $
    263,567
    
    
    $
    264,957Florist segment*
    
    
    324,062
    
    
    
    322,171International segment
    
    
    177,529
    
    
    
    193,300Total
    
    $
    765,158
    
    
    $
    780,428
 
 *
    
    Includes corporate assets.  10




---



##### Table of Contents



Three Months Ended December 31,2007
    
    
    2006Gross Segment
    
    
    Eliminations
    
    
    Consolidated
    
    
    Gross Segment
    
    
    Eliminations
    
    
    Consolidated(In thousands)Revenues:Consumer segment
    
    $
    67,441
    
    
    $
    (2,807
    )
    
    $
    64,634
    
    
    $
    72,551
    
    
    $
    (3,076
    )
    
    $
    69,475Florist segment
    
    
    44,727
    
    
    
    (126
    )
    
    
    44,601
    
    
    
    44,701
    
    
    
    (123
    )
    
    
    44,578International segment
    
    
    46,137
    
    
    
    117
    
    
    
    46,254
    
    
    
    37,422
    
    
    
    65
    
    
    
    37,487Total
    
    
    158,305
    
    
    
    (2,816
    )
    
    
    155,489
    
    
    
    154,674
    
    
    
    (3,134
    )
    
    
    151,540Cost of Products Sold and
Services Provided:Consumer segment
    
    
    45,656
    
    
    
    (126
    )
    
    
    45,530
    
    
    
    50,163
    
    
    
    (123
    )
    
    
    50,040Florist segment
    
    
    14,146
    
    
    
    
    
    
    
    14,146
    
    
    
    13,064
    
    
    
    
    
    
    
    13,064International segment
    
    
    31,852
    
    
    
    (41
    )
    
    
    31,811
    
    
    
    25,740
    
    
    
    (24
    )
    
    
    25,716Corporate
    
    
    474
    
    
    
    
    
    
    
    474
    
    
    
    498
    
    
    
    
    
    
    
    49892,128
    
    
    
    (167
    )
    
    
    91,961
    
    
    
    89,465
    
    
    
    (147
    )
    
    
    89,318Gross Profit:Consumer segment
    
    
    21,785
    
    
    
    (2,681
    )
    
    
    19,104
    
    
    
    22,388
    
    
    
    (2,953
    )
    
    
    19,435Florist segment
    
    
    30,581
    
    
    
    (126
    )
    
    
    30,455
    
    
    
    31,637
    
    
    
    (123
    )
    
    
    31,514International segment
    
    
    14,285
    
    
    
    158
    
    
    
    14,443
    
    
    
    11,682
    
    
    
    89
    
    
    
    11,771Corporate
    
    
    (474
    )
    
    
    
    
    
    
    (474
    )
    
    
    (498
    )
    
    
    
    
    
    
    (498
    )Total
    
    
    66,177
    
    
    
    (2,649
    )
    
    
    63,528
    
    
    
    65,209
    
    
    
    (2,987
    )
    
    
    62,222Advertising and Selling:Consumer segment
    
    
    7,470
    
    
    
    
    
    
    
    7,470
    
    
    
    8,855
    
    
    
    
    
    
    
    8,855Florist segment
    
    
    14,022
    
    
    
    (2,807
    )
    
    
    11,215
    
    
    
    15,850
    
    
    
    (3,076
    )
    
    
    12,774International segment
    
    
    4,234
    
    
    
    17
    
    
    
    4,251
    
    
    
    3,296
    
    
    
    (70
    )
    
    
    3,226Total
    
    
    25,726
    
    
    
    (2,790
    )
    
    
    22,936
    
    
    
    28,001
    
    
    
    (3,146
    )
    
    
    24,855General and AdministrativeConsumer segment
    
    
    4,473
    
    
    
    
    
    
    
    4,473
    
    
    
    5,747
    
    
    
    
    
    
    
    5,747Florist segment
    
    
    2,179
    
    
    
    
    
    
    
    2,179
    
    
    
    2,031
    
    
    
    
    
    
    
    2,031International segment
    
    
    6,110
    
    
    
    (7
    )
    
    
    6,103
    
    
    
    5,722
    
    
    
    121
    
    
    
    5,843Corporate
    
    
    7,677
    
    
    
    
    
    
    
    7,677
    
    
    
    6,733
    
    
    
    
    
    
    
    6,733Total
    
    
    20,439
    
    
    
    (7
    )
    
    
    20,432
    
    
    
    20,233
    
    
    
    121
    
    
    
    20,354Operating Income (Loss)
before Corporate Allocations:Consumer segment
    
    
    9,842
    
    
    
    (2,681
    )
    
    
    7,161
    
    
    
    7,786
    
    
    
    (2,953
    )
    
    
    4,833Florist segment
    
    
    14,380
    
    
    
    2,681
    
    
    
    17,061
    
    
    
    13,756
    
    
    
    2,953
    
    
    
    16,709International segment
    
    
    3,941
    
    
    
    148
    
    
    
    4,089
    
    
    
    2,664
    
    
    
    38
    
    
    
    2,702Corporate
    
    
    (8,151
    )
    
    
    
    
    
    
    (8,151
    )
    
    
    (7,231
    )
    
    
    
    
    
    
    (7,231
    )Total
    
    
    20,012
    
    
    
    148
    
    
    
    20,160
    
    
    
    16,975
    
    
    
    38
    
    
    
    17,013Corporate Allocations:Consumer segment
    
    
    1,042
    
    
    
    
    
    
    
    1,042
    
    
    
    1,053
    
    
    
    
    
    
    
    1,053Florist segment
    
    
    2,991
    
    
    
    
    
    
    
    2,991
    
    
    
    2,331
    
    
    
    
    
    
    
    2,331International segment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Corporate
    
    
    (4,033
    )
    
    
    
    
    
    
    (4,033
    )
    
    
    (3,384
    )
    
    
    
    
    
    
    (3,384
    )Total
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Operating Income (Loss):Consumer segment
    
    
    8,800
    
    
    
    (2,681
    )
    
    
    6,119
    
    
    
    6,733
    
    
    
    (2,953
    )
    
    
    3,780Florist segment
    
    
    11,389
    
    
    
    2,681
    
    
    
    14,070
    
    
    
    11,425
    
    
    
    2,953
    
    
    
    14,378International segment
    
    
    3,941
    
    
    
    148
    
    
    
    4,089
    
    
    
    2,664
    
    
    
    38
    
    
    
    2,702Corporate
    
    
    (4,118
    )
    
    
    
    
    
    
    (4,118
    )
    
    
    (3,847
    )
    
    
    
    
    
    
    (3,847
    )Total
    
    $
    20,012
    
    
    $
    148
    
    
    $
    20,160
    
    
    $
    16,975
    
    
    $
    38
    
    
    $
    17,013Depreciation and
Amortization:Consumer segment
    
    $
    862
    
    
    $
    
    
    
    $
    862
    
    
    $
    993
    
    
    $
    
    
    
    $
    993Florist segment
    
    
    644
    
    
    
    
    
    
    
    644
    
    
    
    797
    
    
    
    
    
    
    
    797International segment
    
    
    1,037
    
    
    
    
    
    
    
    1,037
    
    
    
    1,129
    
    
    
    
    
    
    
    1,129Corporate
    
    
    655
    
    
    
    
    
    
    
    655
    
    
    
    966
    
    
    
    
    
    
    
    966Total
    
    $
    3,198
    
    
    $
    
    
    
    $
    3,198
    
    
    $
    3,885
    
    
    $
    
    
    
    $
    3,885
 11




---



##### Table of Contents



Six Months Ended December 31,2007
    
    
    2006Gross Segment
    
    
    Eliminations
    
    
    Consolidated
    
    
    Gross Segment
    
    
    Eliminations
    
    
    Consolidated(In thousands)Revenues:Consumer segment
    
    $
    115,377
    
    
    $
    (5,023
    )
    
    $
    110,354
    
    
    $
    122,193
    
    
    $
    (5,325
    )
    
    $
    116,868Florist segment
    
    
    87,652
    
    
    
    (230
    )
    
    
    87,422
    
    
    
    88,613
    
    
    
    (214
    )
    
    
    88,399International segment
    
    
    81,257
    
    
    
    201
    
    
    
    81,458
    
    
    
    54,946
    
    
    
    98
    
    
    
    55,044Total
    
    
    284,286
    
    
    
    (5,052
    )
    
    
    279,234
    
    
    
    265,752
    
    
    
    (5,441
    )
    
    
    260,311Cost of Products Sold and
Services Provided:Consumer segment
    
    
    77,679
    
    
    
    (230
    )
    
    
    77,449
    
    
    
    83,701
    
    
    
    (214
    )
    
    
    83,487Florist segment
    
    
    29,328
    
    
    
    
    
    
    
    29,328
    
    
    
    27,528
    
    
    
    
    
    
    
    27,528International segment
    
    
    55,468
    
    
    
    (68
    )
    
    
    55,400
    
    
    
    37,752
    
    
    
    (40
    )
    
    
    37,712Corporate
    
    
    953
    
    
    
    
    
    
    
    953
    
    
    
    1,014
    
    
    
    
    
    
    
    1,014163,428
    
    
    
    (298
    )
    
    
    163,130
    
    
    
    149,995
    
    
    
    (254
    )
    
    
    149,741Gross Profit:Consumer segment
    
    
    37,698
    
    
    
    (4,793
    )
    
    
    32,905
    
    
    
    38,492
    
    
    
    (5,111
    )
    
    
    33,381Florist segment
    
    
    58,324
    
    
    
    (230
    )
    
    
    58,094
    
    
    
    61,085
    
    
    
    (214
    )
    
    
    60,871International segment
    
    
    25,789
    
    
    
    269
    
    
    
    26,058
    
    
    
    17,194
    
    
    
    138
    
    
    
    17,332Corporate
    
    
    (953
    )
    
    
    
    
    
    
    (953
    )
    
    
    (1,014
    )
    
    
    
    
    
    
    (1,014
    )Total
    
    
    120,858
    
    
    
    (4,754
    )
    
    
    116,104
    
    
    
    115,757
    
    
    
    (5,187
    )
    
    
    110,570Advertising and Selling:Consumer segment
    
    
    12,234
    
    
    
    
    
    
    
    12,234
    
    
    
    13,741
    
    
    
    
    
    
    
    13,741Florist segment
    
    
    25,386
    
    
    
    (5,023
    )
    
    
    20,363
    
    
    
    28,574
    
    
    
    (5,325
    )
    
    
    23,249International segment
    
    
    6,956
    
    
    
    35
    
    
    
    6,991
    
    
    
    4,542
    
    
    
    (113
    )
    
    
    4,429Total
    
    
    44,576
    
    
    
    (4,988
    )
    
    
    39,588
    
    
    
    46,857
    
    
    
    (5,438
    )
    
    
    41,419General and AdministrativeConsumer segment
    
    
    8,878
    
    
    
    
    
    
    
    8,878
    
    
    
    10,225
    
    
    
    
    
    
    
    10,225Florist segment
    
    
    4,278
    
    
    
    
    
    
    
    4,278
    
    
    
    4,296
    
    
    
    
    
    
    
    4,296International segment
    
    
    11,947
    
    
    
    32
    
    
    
    11,979
    
    
    
    8,745
    
    
    
    257
    
    
    
    9,002Corporate
    
    
    14,368
    
    
    
    
    
    
    
    14,368
    
    
    
    13,241
    
    
    
    
    
    
    
    13,241Total
    
    
    39,471
    
    
    
    32
    
    
    
    39,503
    
    
    
    36,507
    
    
    
    257
    
    
    
    36,764Operating Income (Loss)
before Corporate Allocations:Consumer segment
    
    
    16,586
    
    
    
    (4,793
    )
    
    
    11,793
    
    
    
    14,526
    
    
    
    (5,111
    )
    
    
    9,415Florist segment
    
    
    28,660
    
    
    
    4,793
    
    
    
    33,453
    
    
    
    28,215
    
    
    
    5,111
    
    
    
    33,326International segment
    
    
    6,886
    
    
    
    202
    
    
    
    7,088
    
    
    
    3,907
    
    
    
    (6
    )
    
    
    3,901Corporate
    
    
    (15,321
    )
    
    
    
    
    
    
    (15,321
    )
    
    
    (14,255
    )
    
    
    
    
    
    
    (14,255
    )Total
    
    
    36,811
    
    
    
    202
    
    
    
    37,013
    
    
    
    32,393
    
    
    
    (6
    )
    
    
    32,387Corporate Allocations:Consumer segment
    
    
    2,028
    
    
    
    
    
    
    
    2,028
    
    
    
    1,870
    
    
    
    
    
    
    
    1,870Florist segment
    
    
    5,560
    
    
    
    
    
    
    
    5,560
    
    
    
    4,723
    
    
    
    
    
    
    
    4,723International segment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Corporate
    
    
    (7,588
    )
    
    
    
    
    
    
    (7,588
    )
    
    
    (6,593
    )
    
    
    
    
    
    
    (6,593
    )Total
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Operating Income (Loss):Consumer segment
    
    
    14,558
    
    
    
    (4,793
    )
    
    
    9,765
    
    
    
    12,656
    
    
    
    (5,111
    )
    
    
    7,545Florist segment
    
    
    23,100
    
    
    
    4,793
    
    
    
    27,893
    
    
    
    23,492
    
    
    
    5,111
    
    
    
    28,603International segment
    
    
    6,886
    
    
    
    202
    
    
    
    7,088
    
    
    
    3,907
    
    
    
    (6
    )
    
    
    3,901Corporate
    
    
    (7,733
    )
    
    
    
    
    
    
    (7,733
    )
    
    
    (7,662
    )
    
    
    
    
    
    
    (7,662
    )Total
    
    $
    36,811
    
    
    $
    202
    
    
    $
    37,013
    
    
    $
    32,393
    
    
    $
    (6
    )
    
    $
    32,387Depreciation and
Amortization:Consumer segment
    
    $
    1,768
    
    
    $
    
    
    
    $
    1,768
    
    
    $
    1,933
    
    
    $
    
    
    
    $
    1,933Florist segment
    
    
    1,310
    
    
    
    
    
    
    
    1,310
    
    
    
    1,631
    
    
    
    
    
    
    
    1,631International segment
    
    
    2,031
    
    
    
    
    
    
    
    2,031
    
    
    
    1,705
    
    
    
    
    
    
    
    1,705Corporate
    
    
    1,310
    
    
    
    
    
    
    
    1,310
    
    
    
    1,932
    
    
    
    
    
    
    
    1,932Total
    
    $
    6,419
    
    
    $
    
    
    
    $
    6,419
    
    
    $
    7,201
    
    
    $
    
    
    
    $
    7,201
 12




---



##### 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
 Florist Segment.
 13




---



##### Table of Contents



International Segment www.interflora.co.uk
 Corporate Costs.
 Seasonality.
  Three Months Ended December 31, 2007 compared to the Three Months Ended December 31, 2006
 Revenues
 Three Months EndedDecember 31,(In thousands)
    
    2007
    
    
    2006
    
    
    % ChangeConsumer segment
    
    $
    64,634
    
    
    $
    69,475
    
    
    
    (7.0
    %)Florist segment
    
    
    44,601
    
    
    
    44,578
    
    
    
    0.1
    %International segment
    
    
    46,254
    
    
    
    37,487
    
    
    
    23.4
    %Total revenues
    
    $
    155,489
    
    
    $
    151,540
    
    
    
    2.6
    %
     14




---



##### Table of Contents



Gross profit
 Three Months EndedDecember 31,(In thousands)
    
    2007
    
    
    2006
    
    
    % ChangeConsumer segment
    
    $
    19,104
    
    
    $
    19,435
    
    
    
    (1.7
    %)Florist segment
    
    
    30,455
    
    
    
    31,514
    
    
    
    (3.4
    %)International segment
    
    
    14,443
    
    
    
    11,771
    
    
    
    22.7
    %Corporate
    
    
    (474
    )
    
    
    (498
    )
    
    
    (4.8
    %)Total gross profit
    
    $
    63,528
    
    
    $
    62,222
    
    
    
    2.1
    %
     Advertising and selling costs
 Three Months EndedDecember 31,(In thousands)
    
    2007
    
    
    2006
    
    
    % ChangeConsumer segment
    
    $
    7,470
    
    
    $
    8,855
    
    
    
    (15.6
    %)Florist segment
    
    
    11,215
    
    
    
    12,774
    
    
    
    (12.2
    %)International segment
    
    
    4,251
    
    
    
    3,226
    
    
    
    31.8
    %Total advertising and selling costs
    
    $
    22,936
    
    
    $
    24,855
    
    
    
    (7.7
    %)
   15




---



##### Table of Contents



General and administrative costs
 Three Months EndedDecember 31,(In thousands)
    
    2007
    
    
    2006
    
    
    % ChangeConsumer segment
    
    $
    4,473
    
    
    $
    5,747
    
    
    
    (22.2
    %)Florist segment
    
    
    2,179
    
    
    
    2,031
    
    
    
    7.3
    %International segment
    
    
    6,103
    
    
    
    5,843
    
    
    
    4.4
    %Corporate
    
    
    7,677
    
    
    
    6,733
    
    
    
    14.0
    %Total general and administrative costs
    
    $
    20,432
    
    
    $
    20,354
    
    
    
    0.4
    %
      16




---



##### Table of Contents



Other
 Three Months EndedDecember 31,(In thousands)
    
    2007
    
    
    2006
    
    
    % ChangeInterest income
    
    $
    (319
    )
    
    $
    (339
    )
    
    
    (5.9
    %)Interest expense
    
    
    6,155
    
    
    
    7,009
    
    
    
    (12.2
    %)Other (income) expense, net
    
    
    (138
    )
    
    
    249
    
    
    
    (155.4
    %)Total other (income) and expenses
    
    $
    5,698
    
    
    $
    6,919
    
    
    
    (17.6
    %)
     Six Months Ended December 31, 2007 compared to the Six Months Ended December 31, 2006
  Revenues
 Six Months EndedDecember 31,(In thousands)
    
    2007
    
    
    2006
    
    
    % ChangeConsumer segment
    
    $
    110,354
    
    
    $
    116,868
    
    
    
    (5.6
    %)Florist segment
    
    
    87,422
    
    
    
    88,399
    
    
    
    (1.1
    %)International segment
    
    
    81,458
    
    
    
    55,044
    
    
    
    48.0
    %Total revenues
    
    $
    279,234
    
    
    $
    260,311
    
    
    
    7.3
    %
    17




---



##### Table of Contents



Gross profit
 Six Months EndedDecember 31,(In thousands)
    
    2007
    
    
    2006
    
    
    % ChangeConsumer segment
    
    $
    32,905
    
    
    $
    33,381
    
    
    
    (1.4
    %)Florist segment
    
    
    58,094
    
    
    
    60,871
    
    
    
    (4.6
    %)International segment
    
    
    26,058
    
    
    
    17,332
    
    
    
    50.3
    %Corporate
    
    
    (953
    )
    
    
    (1,014
    )
    
    
    (6.0
    %)Total gross profit
    
    $
    116,104
    
    
    $
    110,570
    
    
    
    5.0
    %
     Advertising and selling costs
 Six Months EndedDecember 31,(In thousands)
    
    2007
    
    
    2006
    
    
    % ChangeConsumer segment
    
    $
    12,234
    
    
    $
    13,741
    
    
    
    (11.0
    %)Florist segment
    
    
    20,363
    
    
    
    23,249
    
    
    
    (12.4
    %)International segment
    
    
    6,991
    
    
    
    4,429
    
    
    
    57.8
    %Total advertising and selling costs
    
    $
    39,588
    
    
    $
    41,419
    
    
    
    (4.4
    %)
  18




---



##### Table of Contents



General and administrative costs
 Six Months EndedDecember 31,(In thousands)
    
    2007
    
    
    2006
    
    
    % ChangeConsumer segment
    
    $
    8,878
    
    
    $
    10,225
    
    
    
    (13.2
    %)Florist segment
    
    
    4,278
    
    
    
    4,296
    
    
    
    (0.4
    %)International segment
    
    
    11,979
    
    
    
    9,002
    
    
    
    33.1
    %Corporate
    
    
    14,368
    
    
    
    13,241
    
    
    
    8.5
    %Total general and administrative costs
    
    $
    39,503
    
    
    $
    36,764
    
    
    
    7.5
    %
      19




---



##### Table of Contents



Other
 Six Months EndedDecember 31,(In thousands)
    
    2007
    
    
    2006
    
    
    % ChangeInterest income
    
    $
    (621
    )
    
    $
    (637
    )
    
    
    (2.5
    %)Interest expense
    
    
    12,542
    
    
    
    15,235
    
    
    
    (17.7
    %)Other (income) expense, net
    
    
    (348
    )
    
    
    (1,295
    )
    
    
    (73.1
    %)Total other (income) and expenses
    
    $
    11,573
    
    
    $
    13,303
    
    
    
    (13.0
    %)
     Liquidity and Capital Resources
      20




---



##### Table of Contents



Critical Accounting Policies and Estimates
    21




---



##### 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
  22




---



##### 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
  23




---



##### Table of Contents



Item 4. Submission of Matters to a Vote of Security Holders
 (a)
    
    The Annual Meeting of the Stockholders was held on November 14, 2007.(b)
    
    At the Annual Meeting of Stockholders, the stockholders voted to elect ten
directors to the Board of Directors of the Company to serve for a term of one year. The
votes for the director nominees were as follows:
 Director Nominee
    
    For
    
    WithholdPeter J. Nolan
    

    20,872,485
    
    

    7,633,662Robert S. Apatoff
    

    19,687,021
    
    

    8,819,126Adam M. Aron
    

    26,052,947
    
    

    2,453,200John R. Baumer
    

    20,842,485
    
    

    7,663,662William J. Chardavoyne
    

    26,924,496
    
    

    1,581,651Timothy J. Flynn
    

    19,671,693
    
    

    8,834,454Ted C. Nark
    

    26,924,496
    
    

    1,581,651Michael J. Soenen
    

    21,040,327
    
    

    7,465,820Thomas M. White
    

    26,077,922
    
    

    2,428,225Carrie A. Wolfe
    

    20,842,813
    
    

    7,663,334
 (c)
    
    The results of stockholder voting on Proposal 2 were as follows:
  For
    
    Against
    
    Abstain28,467,131
    
    18,866
    
    11,150
 
 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




---



##### Table of Contents



SIGNATURE
  FTD Group, Inc.Date:  February 5, 2008
    By:

/s/
 BECKY A. SHEEHANBecky A. SheehanChief Financial Officer
(principal financial officer) 25




---



##### 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