ftd group inc. reports second quarter fiscal year 2008 reports

SECOND QUARTER FISCAL YEAR 2008 RESULTS

Second quarter fiscal year 2008 consolidated revenue grew $4.0 million, or 2.6%, to $155.5 million, compared to consolidated revenue of $151.5 million for the same period of fiscal year 2007. Foreign currency rate changes accounted for approximately $3.3 million of the revenue growth. Resulting net income for the second quarter of fiscal year 2008 was $9.0 million, or $0.30 per diluted share, compared to net income of $6.1 million, or $0.21 per diluted share, in the prior year quarter.

Domestic Consumer Segment

The Domestic Consumer Segment achieved revenue of $64.6 million in the second quarter of fiscal year 2008, compared to revenue of $69.5 million in the same period of fiscal year 2007, representing a 7.0% decline. Second quarter operating income in the Domestic Consumer Segment was $6.1 million, or 9.5% of Domestic Consumer Segment revenue, compared to $3.8 million in the prior year quarter, or 5.4% of Domestic Consumer Segment revenue. Operating margin during the period increased due to more efficient marketing spend as well as reduced general and administrative costs.

Domestic Consumer orders during the second quarter of fiscal year 2008 totaled 998,000 compared to 1,136,000 orders in the same period of fiscal year 2007. Average order value increased to $63.23 in the current quarter from $60.01 in the prior year's quarter.

Domestic Florist Segment

The Domestic Florist Segment achieved revenue of $44.6 million in the second quarter of fiscal year 2008, consistent with the $44.6 million of revenue achieved in the same period of the prior fiscal year. Second quarter fiscal year 2008 operating income for the Domestic Florist Segment was $14.1 million, or 31.5% of Domestic Florist Segment revenue, compared to $14.4 million in the prior year quarter, or 32.3% of Domestic Florist Segment revenue. This slight decline is related to a change in product mix during the quarter.

International Segment

For the second quarter of fiscal year 2008, the International Segment, primarily comprised of the Interflora U.K. business, achieved revenue of $46.3 million compared to revenue of $37.5 million in the second quarter of the prior fiscal year, representing a 23.4% increase. This increase includes $3.3 million, or 7.8%, related to favorable foreign currency movement between the U.S. dollar and the pound sterling. The International Segment achieved operating income of $4.1 million, or 8.8% of revenue, in the second quarter of fiscal year 2008 compared to $2.7 million, or 7.2% of revenue, in the second quarter of fiscal year 2007.

The International Segment continues to experience strong demand as consumer order volume totaled 542,000 for the second quarter of fiscal year 2008, compared to 473,000 orders in the same period of the prior fiscal year. Average order value in the International Segment was $69.66 in the current quarter, an 8.7% increase, primarily attributable to favorable foreign currency movement, compared to $64.07 for the same period of the prior fiscal year. Internet orders increased to 71.8% in the current quarter, from 69.3% for the same period of fiscal year 2007.

BALANCE SHEET AND OTHER HIGHLIGHTS

As of December 31, 2007, the Company's cash and cash equivalents totaled $27.5 million. The Company's debt balance totaled $302.0 million, including notes payable of $1.7 million related to the Interflora U.K. acquisition, compared to total debt of $313.4 million as of September 30, 2007. As of December 31, 2007, the Company had $72.0 million available under its revolving credit facility.

In addition to the $11.4 million debt repayment made during the second quarter of fiscal year 2008, the Company paid a quarterly cash dividend of $0.1625 per share on January 7, 2008 to shareholders of record on December 24, 2007, in an amount totaling $4.8 million.

OUTLOOK

"As we look to the second half of our fiscal year, Valentine's Day, U.K. Mother's Day and Easter all fall during the fiscal third quarter this year and Mother's Day in the U.S. occurs in the fiscal fourth quarter. We believe we are well positioned for the remainder of the fiscal year, and are reconfirming our revenue and Adjusted EBITDA targets for the year and increasing our annual EPS target," concluded Soenen.

For fiscal year 2008, the Company is reaffirming, without change, its previously announced annual revenue target of approximately $645 million and targeted Adjusted EBITDA of approximately $98 million (as adjusted for items that management does not consider reflective of core operations), with targeted annual Adjusted EBITDA as a percentage of revenue of approximately 15%. The Company's targeted Adjusted EBITDA includes approximately $4 million of expense related to stock compensation associated with Statement of Financial Accounting Standards No. 123(R) and a deferred compensation plan at Interflora U.K. The Company is increasing its targeted net income for the fiscal year to $40 million, or $1.35 per diluted share, from $37.1 million, or $1.23 per diluted share. The above targets are only estimates, which may be exceeded or alternatively may not be achieved.

CONFERENCE CALL
Listen to the Conference Call (replay) given by the FTD Management

FINANCIAL STATEMENTS

SOURCE: FTD Group, Inc.