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FTD Group, Inc. Reports Fourth Quarter and Fiscal Year 2006 Results

DOWNERS GROVE, Ill.--(BUSINESS WIRE)--Aug. 9, 2006--FTD Group, Inc. (NYSE:FTD):

  • Q4 Revenue Growth of 15.4%


  • Q4 Net Income of $8.8 Million and Diluted EPS of $0.30 vs. $0.18 in the prior year


  • Q4 EBITDA of $22.0 Million, a 35.6% increase over 2005 Q4 EBITDA


  • Record Fiscal Year Net Income of $25.5 Million and EBITDA of $71.9 Million, an 11.6% increase over 2005 Adjusted EBITDA


  • Interflora acquisition completed, expected to contribute to 2007 earnings growth, creates platform for expansion into Europe


  • ProFlowers Lawsuit Settled

FTD Group, Inc. (NYSE:FTD), a leading provider of floral products and services, today announced fourth quarter and full year fiscal year 2006 financial results for the period ended June 30, 2006.

FOURTH QUARTER FISCAL YEAR 2006 RESULTS

Fourth quarter fiscal year 2006 consolidated revenue grew 15.4% to $141.5 million, compared to revenue of $122.6 million for the same period of fiscal year 2005. This revenue growth was driven primarily by an increase in sales related to the Mother's Day holiday, for which the Company previously reported a 12% growth in order volume within its Consumer Segment versus the prior year, and the shift of the Easter holiday to the fourth quarter of fiscal year 2006 from the third quarter of fiscal year 2005, partially offset by a decrease in revenues related to the December 2005 sale of substantially all of the assets and certain liabilities of the Renaissance Greeting Card business (the "Renaissance Sale").

Net income for the fourth quarter of fiscal year 2006 was $8.8 million, or $0.30 per diluted share, compared to net income of $5.4 million, or $0.18 per diluted shared, in the prior year quarter. Earnings before interest, taxes, depreciation and amortization ("EBITDA") for the fourth quarter of fiscal year 2006 was $22.0 million compared to EBITDA of $16.2 million for the prior fiscal year period, representing a 35.6% increase.

"We are pleased with our strong fourth quarter performance. Revenues grew while margins expanded, demonstrating our ability to efficiently scale our business in a competitive marketplace," said Michael J. Soenen, President and Chief Executive Officer of FTD. "As we enter fiscal 2007, we are committed to maintaining our strategy and, with the acquisition of Interflora, we believe that we can accelerate the Company's revenue and earnings growth while providing a platform for further expansion into other European countries."

Tables reconciling net income to EBITDA are included with the attached consolidated financial statements. The Company believes EBITDA provides supplemental information related to the Company's operations and results.

Consumer Segment

The Consumer Segment is comprised of FTD.COM, a leading Internet and telephone marketer of flowers and specialty gifts, which sells products directly to consumers primarily through the Internet via the www.FTD.COM Web site and through the 1-800-SEND-FTD toll-free telephone number. The Consumer Segment achieved revenues of $95.3 million in the fourth quarter of fiscal year 2006, compared to revenues of $78.0 million in the same period of fiscal year 2005, representing a 22.1% increase. Growth was primarily driven by the 12% increase in Mother's Day order volumes and the Easter shift. In the third quarter of fiscal year 2005, the Easter holiday represented approximately 5%, or approximately $4 million, of the quarterly revenues for the Consumer Segment. Fourth quarter operating income in the Consumer Segment was $6.7 million, an increase of 28.6% over operating income of $5.2 million for the prior year period.

Consumer orders during the fourth quarter totaled 1,565,000 compared to 1,327,000 orders in the same quarter of fiscal year 2005. Average order value increased slightly to $59.76 in the current quarter from $58.78 in the prior year's quarter. The percentage of Internet orders continued to grow in this segment, increasing to 90.5% from 89.3% in the fourth quarter of fiscal year 2005. Specialty gift orders, which include all orders delivered via common carrier, such as boxed flowers, plants, gourmet food gifts, holiday gifts, bath and beauty products, jewelry, wine and gift baskets, dried flowers and stuffed animals, comprised 41.6% of total orders for the fourth quarter compared to 30.7% of total orders for the fourth quarter of fiscal year 2005.

Florist Segment

The Florist Segment primarily markets floral products and services to FTD members and other retail locations offering floral products in the U.S. and Canada. The Florist Segment achieved revenues of $46.2 million in the fourth quarter of fiscal year 2006, compared to revenues of $44.6 million in the same period of the prior fiscal year. The increase in Florist Segment revenues was primarily due to an increase in revenues across a majority of the Florist Segment product lines, partially offset by a reduction in revenue related to the Renaissance Sale. The Renaissance Greeting Card business contributed $2.5 million of revenues in the fourth quarter of fiscal 2005. Fourth quarter fiscal year 2006 operating income in the Florist Segment was $15.7 million, which includes a $1.6 million gain related to the settlement of the class action lawsuit entitled In Re: Visacheck/Mastermoney Antitrust Litigation, compared to operating income of $11.5 million in the prior year quarter. As of June 30, 2006, FTD membership totaled approximately 18,900.

SIX MONTHS ENDED JUNE 30, 2006 RESULTS

Due to the shift of Easter between the third and fourth quarters when comparing fiscal year 2006 results to fiscal year 2005 results, management believes it is helpful to present investors with results for the six-month period ended June 30. Revenues for the six months ended June 30, 2006 grew 9.1% to $270.1 million, compared with revenues of $247.5 million for the same period of the prior fiscal year. This revenue growth resulted from a 15.0% increase in revenue in the Consumer Segment and a 0.3% increase in revenue in the Florist Segment, which reflects the Renaissance Sale. The Renaissance Greeting Card business contributed $5.5 million in revenues to the Florist Segment for the six months ended June 30, 2005.

Net income for the six-month period ended June 30, 2006 was $16.2 million, or $0.56 per diluted share, compared to a net loss of $20.2 million for the same period of fiscal year 2005.

Management believes it is helpful to present investors with the Company's net income and earnings per diluted share on a pro forma basis for the six-month period ended June 30, 2005, based on the Company's capital structure following the completion of its initial public offering in February 2005 (the "IPO") and the elimination of certain expenses in connection with the IPO which are not reflective of ongoing operations. As such, pro forma net income for the six months ended June 30, 2005 was $12.2 million, or $0.40 per diluted share, reflecting the elimination of $7.7 million of expense, net of tax, related to the termination of the management services agreement with Leonard Green & Partners, L.P., $3.2 million of interest expense and $21.5 million of prepayment fees related to the Company's preferred shares subject to mandatory redemption, which were repurchased with a portion of the proceeds from the IPO, and the issuance of 15.8 million shares of Common Stock, which were issued in connection with the IPO.

EBITDA for the six-month period ended June 30, 2006 was $41.6 million compared to Adjusted EBITDA of $35.1 million for same period of the prior fiscal year, representing an 18.3% increase. Adjusted EBITDA for six months ended June 30, 2005 excludes expenses related to the management services agreement which was terminated in connection with the Company's IPO, as previously described.

Tables reconciling net income/(loss) to pro forma net income, EBITDA and Adjusted EBITDA along with explanations and definitions of pro forma net income, EBITDA and Adjusted EBITDA, are included with the attached consolidated financial statements. Also included in the attached consolidated financial statements is a table reconciling weighted average shares outstanding to pro forma weighted average shares outstanding, which is used to calculate pro forma earnings per share. The Company believes pro forma net income, EBITDA, Adjusted EBITDA and pro forma earnings per share are useful and relevant because the expenses eliminated are not reflective of the Company's current capital structure or ongoing operations, and a comparison excluding these expenses provides supplemental information related to the Company's operations and results.

FULL YEAR 2006 RESULTS

Fiscal year 2006 revenues grew 6.2% to $465.1 million, compared with revenues of $437.8 million for fiscal 2005. This revenue growth was driven by an 11.6% increase in revenue in the Consumer Segment.

Net income for fiscal year 2006 was $25.5 million, or $0.86 per diluted share, compared to a net loss for fiscal year 2005 of $22.6 million.

Management believes it is helpful to investors to be presented with the Company's prior year net income and earnings per diluted share on a pro forma basis, based on the Company's capital structure following the IPO in February 2005 and the elimination of certain expenses in connection with the IPO, which are not reflective of ongoing operations. As such, pro forma net income for fiscal year 2005 was $20.5 million, or $0.68 per diluted share, reflecting the elimination of $8.3 million of expense, net of tax, related to the termination of the management services agreement with Leonard Green & Partners, L.P., $13.2 million of interest expense and $21.5 million of prepayment fees related to the Company's preferred shares subject to mandatory redemption, which were repurchased with a portion of the proceeds from the IPO, and the issuance of 15.8 million shares of Common Stock, which were issued in connection with the IPO.

EBITDA for fiscal year 2006 was $71.9 million compared to Adjusted EBITDA of $64.4 million for the prior fiscal year, representing an 11.6% increase. Adjusted EBITDA for fiscal year 2005 excludes expenses related to the management services agreement which was terminated in connection with the Company's IPO, as previously described.

Consumer Segment

The Consumer Segment achieved revenues of $275.8 million in fiscal year 2006, compared to revenues of $247.1 million in 2005, representing an 11.6% increase. Growth was primarily driven by an increase in order volumes. Operating income for the Consumer Segment was $16.1 million for fiscal year 2006, compared to $14.4 million for the prior year, an increase of 12.2%.

Consumer orders for fiscal year 2006 totaled 4,508,000 compared to 4,073,000 orders in the prior fiscal year. Average order value decreased slightly to $60.38 in fiscal year 2006 from $60.67 in the prior year, in line with management expectations. Internet orders as a percentage of total orders in this segment continued to grow, increasing to 90.1% for fiscal 2006 from 87.2% in fiscal year 2005. Specialty gift orders comprised 38.3% of total orders for the current fiscal year compared to 28.8% of total orders for fiscal year 2005.

Florist Segment

The Florist Segment achieved revenues of $189.4 million in fiscal year 2006, compared to revenues of $190.7 million in fiscal year 2005, representing a decrease of 0.7%. The decline in Florist Segment revenues was primarily due to the Renaissance Sale, which contributed $5.5 million of revenues in the last half of fiscal year 2005, in addition to lower sales resulting from a reduction of unprofitable specialty wholesaling SKUs. This decrease was partially offset by an increase in Florists' Online revenues, fresh flower sales and technology system sales. Fiscal year 2006 operating income in the Florist Segment was $58.4 million, which includes a $1.6 million gain related to the settlement of the class action lawsuit entitled In Re: Visacheck/Mastermoney Antitrust Litigation and a $1.0 million gain related to the Renaissance Sale, compared to operating income of $50.0 million in the prior year, which represents an increase of 16.8%.

BALANCE SHEET AND OTHER HIGHLIGHTS

The Company's debt balance was $220.1 million as of June 30, 2006, down from $228.0 million as of March 31, 2006 and $239.1 million as of June 30, 2005. Capital expenditures for the fiscal year ended June 30, 2006 were $8.8 million and were primarily related to a new call center that the Company opened in October 2005 and continued technology improvements.

In connection with the Interflora acquisition, the Company's bank debt was refinanced, in part, to provide for the purchase price of the acquisition. The new $225 million senior secured credit facility consists of a $150 million term loan and a $75 million revolving credit facility. The existing senior subordinated notes remain outstanding. Upon consummation of the acquisition on July 31, 2006, the Company had total debt outstanding of approximately $345 million.

SHARE REPURCHASE PROGRAM

As previously disclosed, on October 25, 2005, the Board of Directors authorized a share repurchase program totaling $30 million, effective through September 30, 2007. These purchases may be made from time to time in both open market and private transactions, dependent upon market and other conditions. The Company may repurchase shares pursuant to a 10b5-1 plan, which would generally permit the Company to repurchase shares at times when it might otherwise be prevented from doing so under certain securities laws. During the year, the Company repurchased 1.5 million shares at an average price of $9.71 for a total of $15.0 million. As of June 30, 2006, the Company has share repurchases totaling $15 million remaining under the Board authorized share repurchase program.

"Our cash flow generation coupled with low capital investment requirements is a strength of our business. We remain committed to putting our cash to use in a manner that best benefits our shareholders long term, and over the next year we will continue to actively assess acquisition, debt pay-down and share repurchase opportunities, with a bias toward repaying debt," continued Soenen.

FISCAL YEAR 2007 OUTLOOK

"In 2007, we will continue to be focused on strengthening and growing our existing segments through consistent diligence in product improvement, marketing execution and customer service. We believe, despite continued competition, our brand and marketing expertise position us to gain additional market share in 2007. We also expect our acquisition of Interflora will meaningfully contribute to results in 2007, while creating a platform for international growth," concluded Soenen.

For fiscal year 2007, reflecting the acquisition of Interflora on July 31, 2006, the Company is targeting annual revenues to be approximately $630 million, with first, second, third and fourth quarter revenues representing approximately 17%, 24%, 30%, and 29%, respectively, of the total annual revenues. The Company is targeting net income for the fiscal year to be approximately $26.5 million, with diluted earnings per share of $0.91. The targeted net income includes $1.4 million, net of tax, related to the write-off of deferred financing fees associated with the refinancing of the bank debt in July 2006. In addition, the Company targets Adjusted EBITDA, which excludes the expense related to the write-off of deferred financing fees, for fiscal year 2007 to be approximately $85.4 million, with annual Adjusted EBITDA as a percentage of revenues of approximately 14%. The Company's targeted Adjusted EBITDA includes approximately $3 million of expense related to stock compensation associated with Statement of Financial Accounting Standards No. 123(R) and a deferred compensation plan related to Interflora. The stock compensation expense includes a first quarter 2007 employee option grant of approximately 1.3 million shares. The Company anticipates approximately $10-$12 million in capital expenditures during fiscal year 2007. The above targets are only estimates, which may be exceeded or alternatively may not be achieved. In addition, these targets are also subject to final purchase accounting adjustments related to the acquisition of Interflora, which may result in increased amortization expense related to the revaluation of Interflora's assets.

CONFERENCE CALL

A conference call has been scheduled for August 9, 2006 at 10:00 a.m., ET, to review the results for the fourth quarter and full year of fiscal year 2006. To listen to the call over the Internet, go to the investor relations portion of the Company's Web site, www.FTD.COM. Please allow at least 15 minutes to register, download and install any necessary audio software. To listen to the call by phone dial (877) 381-6199 for North American callers or (706) 679-4384 for International callers; mention Conference ID #21300459. A replay of the conference call will be available through August 23, 2006 beginning one hour after the completion of the live call by phone at (800) 633-8284 for North American callers or (402) 977-9140 for International callers or on the Web at www.FTD.COM. The conference call contains time-sensitive information that is accurate only as of August 9, 2006, the date of the live broadcast. The call is the property of FTD Group, Inc. Any redistribution, retransmission or rebroadcast of the conference call in any form without the express written consent of FTD Group, Inc. is strictly prohibited.

ABOUT FTD GROUP, INC.

FTD Group, Inc. is a leading provider of floral-related products and services to consumers and retail florists, as well as other retail locations offering floral products, in the U.S., Canada, the U.K. and Ireland. The business is supported by the highly recognized FTD and Interflora brands. Both brands are supported by the Mercury Man logo, which is displayed in approximately 50,000 floral shops globally. The consumer businesses operate primarily through the www.FTD.COM Web site in the U.S. and Canada and the www.interflora.co.uk Web site in the U.K. and Ireland and are complemented by the florist businesses, which provide products and services to the independent florist networks.

FORWARD-LOOKING STATEMENTS

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

Financial statements follow...

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



                              Three Months Ended       Year Ended
                                   June 30,             June 30,
                              -------------------  -------------------
                                2006      2005       2006      2005
                              --------- ---------  --------- ---------

Revenues:
   Florist segment             $46,242   $44,596   $189,360  $190,687
   Consumer segment             95,252    77,982    275,773   247,108
                              --------- ---------  --------- ---------
      Total revenues           141,494   122,578    465,133   437,795

Costs of goods sold and
 services provided:
   Florist segment              13,029    12,864     59,990    62,025
   Consumer segment             68,285    57,632    200,549   183,692
   Corporate                       517       521      2,235     2,300
                              --------- ---------  --------- ---------
      Total costs of goods
       sold and services
       provided                 81,831    71,017    262,774   248,017

Gross profit:
   Florist segment              33,213    31,732    129,370   128,662
   Consumer segment             26,967    20,350     75,224    63,416
   Corporate                      (517)     (521)    (2,235)   (2,300)
                              --------- ---------  --------- ---------
      Total gross profit        59,663    51,561    202,359   189,778

Advertising and selling:
   Florist segment              13,684    14,766     53,200    56,319
   Consumer segment             13,153     9,777     35,921    29,080
                              --------- ---------  --------- ---------
      Total advertising and
       selling                  26,837    24,543     89,121    85,399

General and administrative
 (includes management fees):
   Florist segment                 984     2,432      6,591    10,161
   Consumer segment              6,295     4,658     19,917    17,081
   Corporate                     6,459     6,084     25,674    37,491
                              --------- ---------  --------- ---------
      Total general and
       administrative           13,738    13,174     52,182    64,733

Operating income (loss) before
 corporate allocations:
   Florist segment              18,545    14,534     69,579    62,182
   Consumer segment              7,519     5,915     19,386    17,255
   Corporate                    (6,976)   (6,605)   (27,909)  (39,791)
                              --------- ---------  --------- ---------
      Total operating income
       before corporate
       allocations              19,088    13,844     61,056    39,646
                              --------- ---------  --------- ---------

Corporate Allocations:
   Florist segment               2,802     3,028     11,166    12,154
   Consumer segment                821       708      3,272     2,895
   Corporate                    (3,623)   (3,736)   (14,438)  (15,049)
                              --------- ---------  --------- ---------
      Total corporate
       allocations                   -         -          -         -

Income (loss) from operations:
   Florist segment              15,743    11,506     58,413    50,028
   Consumer segment              6,698     5,207     16,114    14,360
   Corporate                    (3,353)   (2,869)   (13,471)  (24,742)
                              --------- ---------  --------- ---------
      Total income from
       operations               19,088    13,844     61,056    39,646
                              --------- ---------  --------- ---------

Other income and expenses:
   Interest income                (396)     (183)      (924)     (649)
   Interest expense              4,853     5,037     19,449    20,466
   Interest expense and
    prepayment fees on shares
    subject to mandatory
    redemption                       -         -          -    34,732
   Other expense (income), net    (192)       31       (398)     (390)
                              --------- ---------  --------- ---------

      Total other expenses       4,265     4,885     18,127    54,159
                              --------- ---------  --------- ---------

      Income (loss) before
       income tax               14,823     8,959     42,929   (14,513)

Income tax expense               6,029     3,583     17,386     8,087
                              --------- ---------  --------- ---------

      Net income (loss)         $8,794    $5,376    $25,543  $(22,600)
                              ========= =========  ========= =========


Net income (loss) per common
 share - basic                   $0.31     $0.18      $0.89    $(1.15)
                              ========= =========  ========= =========
Net income (loss) per common
 share - diluted                 $0.30     $0.18      $0.86    $(1.15)
                              ========= =========  ========= =========

Weighted average common shares
 outstanding - basic            27,977    29,452     28,736    19,722
                              ========= =========  ========= =========
Weighted average common shares
 outstanding - diluted          28,936    30,366     29,779    19,722
                              ========= =========  ========= =========



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


                 ASSETS                   June 30, 2006  June 30, 2005
                 ------                   -------------  -------------
Current Assets:
   Cash and cash equivalents                   $10,954         $8,890
   Accounts receivable, less allowance for
    doubtful accounts of $4,437 at June
    30, 2006 and $2,521 at June 30, 2005        26,044         23,419
   Inventories, net                              3,542          6,495
   Deferred income taxes                         2,695          2,550
   Prepaid expenses and other current
    assets                                       3,290          7,782
                                          -------------  -------------
      Total current assets                      46,525         49,136

Property and equipment:
   Land and improvements                         1,380          1,380
   Building and improvements                    15,611         14,291
   Computer equipment                            4,931          3,345
   Furniture and equipment                       3,343          2,814
                                          -------------  -------------
      Total                                     25,265         21,830
   Less accumulated depreciation                 6,051          3,790
                                          -------------  -------------
      Property and equipment, net               19,214         18,040

Other assets:
   Deferred financing fees, net                  6,848          8,527
   Computer software, net                       10,577         11,010
   Other noncurrent assets                      14,557          8,985
   Other intangible assets, less
    accumulated amortization of
    $5,993 at June 30, 2006 and $3,393
    at June 30, 2005                            14,780         17,380
   Trademark                                   121,577        121,577
   Goodwill                                    336,659        336,659
                                          -------------  -------------
      Total other assets                       504,998        504,138
                                          -------------  -------------
      Total assets                            $570,737       $571,314
                                          =============  =============

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

Current liabilities:
   Accounts payable                            $45,273        $41,498
   Customer deposits                             4,519          5,143
   Unearned income                               1,909          2,522
   Accrued interest                              4,924          4,993
   Accrued compensation                          4,521          4,128
   Other accrued liabilities                     8,210          5,058
   Current maturities of long-term debt          1,125          1,633
                                          -------------  -------------
      Total current liabilities                 70,481         64,975

Senior secured credit facility                  48,875         67,330
Senior subordinated notes                      170,117        170,117
Post-retirement benefits and accrued
 pension obligations                             2,368          2,856
Deferred income taxes                           61,160         60,289

Stockholders' equity:
   Common stock:  $0.01 par value,
    75,000,000 shares authorized;
    29,482,182 and 29,451,791 shares
    issued as of June 30, 2006 and
    June 30, 2005, respectively                    295            295
   Additional paid-in capital                  233,362        232,759
   Accumulated deficit                          (1,554)       (27,097)
   Accumulated other comprehensive income
    (loss)                                         200           (210)
   Treasury stock, at cost, 1,504,480
    shares as of June 30, 2006                 (14,567)             -
                                          -------------  -------------
      Total stockholders' equity               217,736        205,747
                                          -------------  -------------
      Total liabilities and stockholders'
       equity                                 $570,737       $571,314
                                          =============  =============



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


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

                                                    2006       2005
                                                  ---------  ---------


Cash flows from operating activities:
   Net income (loss)                               $25,543   $(22,600)
   Adjustments to reconcile net income (loss) to
    net cash provided by operating activities:
      Depreciation                                   4,214      5,113
      Amortization                                   6,247      5,386
      Interest expense and prepayment fees on
       mandatorily redeemable shares                     -     34,732
      Gain from sale of business and related
       transactions                                   (961)         -
      Stock-based compensation                         625          -
      Amortization and write off of deferred
       financing costs                               1,679      1,934
      Provision for doubtful accounts                3,436      4,250
      Deferred income taxes                            822      4,438
      Increase (decrease) in cash due to changes
       in operating assets and liabilities:
         Accounts receivable                        (7,430)    (2,953)
         Inventories                                   581      2,897
         Prepaid expenses and other                  4,083      3,400
         Other noncurrent assets                    (4,129)       258
         Accounts payable                            4,225        187
         Other accrued liabilities, unearned
          income and customer deposits               1,910     (2,015)
                                                  ---------  ---------

            Net cash provided by operating
             activities                             40,845     35,027
                                                  ---------  ---------

Cash flows from investing activities:
   Capital expenditures                             (8,754)    (5,604)
   Proceeds from sale of business                    3,500          -
   Acquisition                                           -     (8,472)
                                                  ---------  ---------

            Net cash used in investing activities   (5,254)   (14,076)
                                                  ---------  ---------

Cash flows from financing activities:
   Repayments of long-term debt                    (18,963)   (20,708)
   Purchase of company stock                       (14,999)         -
   Proceeds from exercise of stock options             212          -
   Net proceeds from the issuance of common stock        -    192,227
   Redemption of preferred stock                         -   (186,811)
   Capital contribution - common stock                   -        827
   Deferred financing costs                              -       (243)
                                                  ---------  ---------

            Net cash used in financing activities  (33,750)   (14,708)
                                                  ---------  ---------

   Effect of foreign exchange rate changes on
    cash                                               223        156
                                                  ---------  ---------

Net increase in cash and cash equivalents            2,064      6,399

Cash and cash equivalents at beginning of period     8,890      2,491
                                                  ---------  ---------

Cash and cash equivalents at end of period         $10,954     $8,890
                                                  =========  =========



                            FTD GROUP, INC.
                          SEGMENT INFORMATION
                            (In thousands)

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

                             Gross Segment  Eliminations  Consolidated
                             -------------  ------------  ------------

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

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

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


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

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

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

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

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

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



                                        Three Months Ended
                                           June 30, 2005
                             -----------------------------------------
                             Gross Segment  Eliminations  Consolidated
                             -------------  ------------  ------------

Revenues:
Florist segment                   $44,625          $(29)      $44,596
Consumer segment                   84,111        (6,129)       77,982
                             -------------  ------------  ------------
      Total                       128,736        (6,158)      122,578
                             -------------  ------------  ------------

Costs of Goods Sold and
Services Provided:
Florist segment                    13,709          (845)       12,864
Consumer segment                   58,396          (764)       57,632
Corporate                             521             -           521
                             -------------  ------------  ------------
      Total                        72,626        (1,609)       71,017
                             -------------  ------------  ------------

Gross Profit:
Florist segment                    30,916           816        31,732
Consumer segment                   25,715        (5,365)       20,350
Corporate                            (521)            -          (521)
                             -------------  ------------  ------------
      Total                        56,110        (4,549)       51,561
                             -------------  ------------  ------------


Advertising and Selling:
Florist segment                    19,316        (4,550)       14,766
Consumer segment                    9,777             -         9,777
                             -------------  ------------  ------------
  Total                            29,093        (4,550)       24,543
                             -------------  ------------  ------------

General and Administrative:
Florist segment                     2,432             -         2,432
Consumer segment                    5,449          (791)        4,658
Corporate                           5,292           792         6,084
                             -------------  ------------  ------------
      Total                        13,173             1        13,174
                             -------------  ------------  ------------

Operating Income (Loss)
before Corporate Allocations:
Florist segment                     9,168         5,366        14,534
Consumer segment                   10,489        (4,574)        5,915
Corporate                          (5,813)         (792)       (6,605)
                             -------------  ------------  ------------
      Total                        13,844             -        13,844
                             -------------  ------------  ------------

Corporate Allocations:
Florist segment                     3,028             -         3,028
Consumer segment                      708             -           708
Corporate                          (3,736)            -        (3,736)
                             -------------  ------------  ------------
      Total                             -             -             -
                             -------------  ------------  ------------

Operating Income (Loss):
Florist segment                     6,140         5,366        11,506
Consumer segment                    9,781        (4,574)        5,207
Corporate                          (2,077)         (792)       (2,869)
                             -------------  ------------  ------------
      Total                       $13,844            $-       $13,844
                             =============  ============  ============

Depreciation and
Amortization:
Florist segment                      $887            $-          $887
Consumer segment                      563             -           563
Corporate                             961             -           961
                             -------------  ------------  ------------
      Total                        $2,411            $-        $2,411
                             =============  ============  ============



                            FTD GROUP, INC.
                          SEGMENT INFORMATION
                            (In thousands)

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

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

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

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


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

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

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

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

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

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



                                            Year Ended
                                           June 30, 2005
                             -----------------------------------------
                             Gross Segment  Eliminations  Consolidated
                             -------------  ------------  ------------

Revenues:
Florist segment                  $190,815         $(128)     $190,687
Consumer segment                  267,075       (19,967)      247,108
                             -------------  ------------  ------------
      Total                       457,890       (20,095)      437,795
                             -------------  ------------  ------------

Costs of Goods Sold and
Services Provided:
Florist segment                    65,208        (3,183)       62,025
Consumer segment                  186,225        (2,533)      183,692
Corporate                           2,300             -         2,300
                             -------------  ------------  ------------
      Total                       253,733        (5,716)      248,017
                             -------------  ------------  ------------

Gross Profit:
Florist segment                   125,607         3,055       128,662
Consumer segment                   80,850       (17,434)       63,416
Corporate                          (2,300)            -        (2,300)
                             -------------  ------------  ------------
      Total                       204,157       (14,379)      189,778
                             -------------  ------------  ------------


Advertising and Selling:
Florist segment                    70,697       (14,378)       56,319
Consumer segment                   29,080             -        29,080
                             -------------  ------------  ------------
  Total                            99,777       (14,378)       85,399
                             -------------  ------------  ------------

General and Administrative
(includes Management Fees):
Florist segment                    10,161             -        10,161
Consumer segment                   19,556        (2,475)       17,081
Corporate                          35,017         2,474        37,491
                             -------------  ------------  ------------
      Total                        64,734            (1)       64,733
                             -------------  ------------  ------------

Operating Income (Loss)
before Corporate Allocations:
Florist segment                    44,749        17,433        62,182
Consumer segment                   32,214       (14,959)       17,255
Corporate                         (37,317)       (2,474)      (39,791)
                             -------------  ------------  ------------
      Total                        39,646             -        39,646
                             -------------  ------------  ------------

Corporate Allocations:
Florist segment                    12,154             -        12,154
Consumer segment                    2,895             -         2,895
Corporate                         (15,049)            -       (15,049)
                             -------------  ------------  ------------
      Total                             -             -             -
                             -------------  ------------  ------------

Operating Income (Loss):
Florist segment                    32,595        17,433        50,028
Consumer segment                   29,319       (14,959)       14,360
Corporate                         (22,268)       (2,474)      (24,742)
                             -------------  ------------  ------------
      Total                       $39,646            $-       $39,646
                             =============  ============  ============

Depreciation and
Amortization:
Florist segment                    $4,241            $-        $4,241
Consumer segment                    2,405             -         2,405
Corporate                           3,853             -         3,853
                             -------------  ------------  ------------
      Total                       $10,499            $-       $10,499
                             =============  ============  ============



                            FTD GROUP, INC.
                      NON-GAAP FINANCIAL MEASURES
         PRO FORMA NET INCOME AND PRO FORMA EARNINGS PER SHARE
                              (Unaudited)
                 (In thousands, except per share data)


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

In addition to the GAAP financial measures set forth in this press
release, the Company has included certain non-GAAP financial measures
within the meaning of Regulation G as a result of significant changes
in the Company's capital structure resulting from the Company's
initial public offering in February 2005 (the "IPO"). The Company has
included "pro forma EPS," calculated based on "pro forma net income,"
and "pro forma weighted average shares outstanding," which are all
non-GAAP financial measures. The Company's management believes that
these measurements are important to investors and other interested
persons and that such persons benefit from having a consistent basis
for comparison between quarters and for comparison with other
companies in the industry.

While management believes that pro forma net income and pro forma EPS
will be helpful to investors in understanding and evaluating the
Company's performance in the periods immediately following the IPO,
management does not expect to continue to provide pro forma net income
and pro forma EPS once the effects of the significant changes to the
Company's capital structure are able to be fully reflected in the
Company's financial statements.

The Company is providing pro forma net income, pro forma EPS and pro
forma weighted average shares outstanding for the year ended June 30,
2005, assuming that the following transactions had occurred on June
30, 2004:

    (i) the issuance of 15,842,893 shares in connection with the IPO;
   (ii) the repurchase of the 14% Senior Redeemable Exchangeable
        Cumulative Preferred Stock and the 12% Junior Redeemable
        Exchangeable Cumulative Preferred Stock; and
  (iii) the termination of the Management Services Agreement.


                                                     Six
                                                    Months     Year
                      Three Months Ended             Ended     Ended
             ------------------------------------- --------- ---------
             September December March 31, June 30,  June 30,  June 30,
             30, 2004  31, 2004   2005      2005      2005      2005
             --------- -------- --------- -------- --------- ---------

Net income
 (loss), as
 reported
 (GAAP basis) $(3,147)    $756  $(25,585)  $5,376  $(20,209) $(22,600)
Plus:
 management
 fees, net of
 40% tax
 effect           328      300     7,710        -     7,710     8,338
Plus:
 interest
 expense and
 prepayment
 fees on
 shares
 subject to
 mandatory
 redemption     4,943    5,105    24,684        -    24,684    34,732
             --------- -------- --------- -------- --------- ---------

Pro forma net
 income        $2,124   $6,161    $6,809   $5,376   $12,185   $20,470
             ========= ======== ========= ======== ========= =========

Pro forma EPS:
--------------
Basic           $0.07    $0.21     $0.23    $0.18     $0.41     $0.70
             ========= ======== ========= ======== ========= =========
Diluted         $0.07    $0.21     $0.22    $0.18     $0.40     $0.68
             ========= ======== ========= ======== ========= =========


Basic:
------
Weighted
 average
 shares
 outstanding,
 as reported
 (GAAP basis)  13,336   13,609    22,493   29,452    25,973    19,722
Add: weighted
 average
 effect as if
 IPO occurred
 on 6/30/04    15,843   15,843     6,959        -     3,480     9,661
             --------- -------- --------- -------- --------- ---------
Pro forma
 weighted
 average
 shares
 outstanding   29,179   29,452    29,452   29,452    29,453    29,383
             ========= ======== ========= ======== ========= =========


Diluted:
--------
Weighted
 average
 shares
 outstanding
 (GAAP basis)  13,336   13,609    23,460   30,366    26,913    20,291
Add: weighted
 average
 effect as if
 IPO occurred
 on 6/30/04    15,843   15,843     6,959        -     3,480     9,661
             --------- -------- --------- -------- --------- ---------
Pro forma
 weighted
 average
 shares
 outstanding   29,179   29,452    30,419   30,366    30,393    29,952
             ========= ======== ========= ======== ========= =========



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


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

The Company defines EBITDA as net income (loss) before net interest
expense, income tax expense, depreciation and amortization. The
Company defines Adjusted EBITDA as EBITDA plus (i) expenses that are
not considered reflective of the Company's ongoing operations and (ii)
management fees, because these fees were excluded in measuring the
Company's performance under the executive compensation plan, the
senior credit agreement and the indenture governing the 7.75% Senior
Subordinated Notes (the "Notes"). EBITDA and Adjusted EBITDA are
calculated as follows for the periods presented:



             Three Months Ended  Six Months Ended      Year Ended
                  June 30,           June 30,           June 30,
             ------------------ ------------------ -------------------
               2006     2005      2006     2005      2006      2005
             -------- --------- -------- --------- --------- ---------


Net income
 (loss), as
 reported
 (GAAP basis) $8,794    $5,376  $16,215  $(20,209)  $25,543  $(22,600)
plus:
 Interest
 expense, net  4,457     4,854    9,053     9,950    18,525    19,817
plus:
 Interest
 expense and
 prepayment
 fees on
 shares
 subject to
 mandatory
 redemption        -         -        -    24,684         -    34,732
plus:
 Depreciation
 and
 amortization  2,721     2,411    5,345     4,886    10,461    10,499
plus: Income
 tax expense   6,029     3,583   10,961     2,981    17,386     8,087
             -------- --------- -------- --------- --------- ---------
EBITDA (1)    22,001    16,224   41,574    22,292    71,915    50,535
plus:
 Management
 fees (2)          -         -        -    12,850         -    13,897
             -------- --------- -------- --------- --------- ---------
Adjusted
 EBITDA (1)  $22,001   $16,224  $41,574   $35,142   $71,915   $64,432
             ======== ========= ======== ========= ========= =========


(1) The Company uses EBITDA and Adjusted EBITDA as supplemental
    measures of performance. The Company presents Adjusted EBITDA
    because it considers it an important supplemental measure of
    performance, as it is used as a performance measure under the
    senior credit facility entered into in connection with the 2004
    Going Private Transaction, the indenture governing the Notes and
    the Company's executive compensation plan. The adjustment made in
    the calculation of Adjusted EBITDA, as described above, is an
    adjustment that would be made in calculating the Company's
    performance for purposes of coverage ratios under the senior
    credit facility and the indenture governing the Notes, and the
    Company's executive compensation plan bases incentive compensation
    payments in significant part on the Company's performance measured
    using Adjusted EBITDA as presented above. Measures similar to
    EBITDA and Adjusted EBITDA are also widely used by the Company and
    by others in the Company's industry to evaluate and price
    potential acquisition candidates.

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

    EBITDA and Adjusted EBITDA have limitations as analytical tools,
    and should not be considered in isolation, or as a substitute for
    analysis of the Company's results as reported under GAAP. Some of
    the limitations of EBITDA and Adjusted EBITDA are that they do not
    reflect the Company's cash expenditures for capital expenditures,
    they do not reflect the significant interest expense or the cash
    requirements necessary to service interest or principal payments
    on the Company's debt, they do not reflect changes in, or cash
    requirements for, the Company's working capital requirements, they
    do not reflect the impact of management fees paid, and other
    companies in the Company's industry may calculate these measures
    differently than presented above. The Company compensates for
    these limitations by relying primarily on GAAP results and using
    EBITDA and Adjusted EBITDA only supplementally.

(2) The Management Services Agreement was terminated in connection
    with the Company's initial public offering in February 2005.



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


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

The Company defines EBITDA as net income before net interest expense,
income tax expense, depreciation and amortization. The Company defines
Adjusted EBITDA as EBITDA plus expenses that are not considered
reflective of the Company's ongoing operations because these fees are
excluded in measuring the Company's performance under the executive
compensation plan, the senior credit agreement and the indenture
governing the 7.75% Senior Subordinated Notes (the "Notes"). EBITDA
and Adjusted EBITDA are calculated as follows for the period
presented:

                                                      Year Ended
                                                     June 30, 2007
                                                 (Forecasted Targets)
                                                ----------------------
     Revenues                                                $630,000

     Net income (GAAP basis)                                  $26,500
     plus: Interest expense, net                               26,000
     plus: Depreciation and amortization                       14,500
     plus: Income tax expense                                  16,000
                                                ----------------------
     EBITDA (1)                                                83,000
     plus: Write-off of deferred financing fees                 2,400
                                                ----------------------
     Adjusted EBITDA (1)                                      $85,400
                                                ======================


(1) The Company uses EBITDA and Adjusted EBITDA as supplemental
    measures of performance. Measures similar to EBITDA and Adjusted
    EBITDA are also widely used by the Company and by others in the
    Company's industry to evaluate and price potential acquisition
    candidates. The Company believes EBITDA and Adjusted EBITDA
    facilitate operating performance comparisons from period to period
    and company to company by backing out potential differences caused
    by variations in capital structure (affecting relative interest
    expense), tax positions (such as the impact on periods or
    companies of changes in effective tax rates or net operating
    losses) and the age and book depreciation of facilities and
    equipment (affecting relative depreciation expense). The Company
    also presents EBITDA and Adjusted EBITDA because it believes they
    are frequently used by investors and other interested parties in
    the evaluation of high yield issuers, many of which present EBITDA
    and Adjusted EBITDA when reporting their results.

    EBITDA and Adjusted EBITDA have limitations as analytical tools,
    and should not be considered in isolation, or as a substitute for
    analysis of the Company's results as reported under GAAP. Some of
    the limitations of EBITDA and Adjusted EBITDA are that they do not
    reflect the Company's cash expenditures for capital expenditures,
    it does not reflect the significant interest expense or the cash
    requirements necessary to service interest or principal payments
    on the Company's debt, it does not reflect changes in, or cash
    requirements for, the Company's working capital requirements and
    other companies in the Company's industry may calculate this
    measure differently than presented above. The Company compensates
    for these limitations by relying primarily on GAAP results and
    using EBITDA and Adjusted EBITDA only supplementally.

CONTACT: FTD Group, Inc.
Jandy Tomy (Investor Relations), 630-724-6984
jtomy@ftdi.com

SOURCE: FTD Group, Inc.

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