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FTD Group, Inc. (FTD-OLD)

F1Q07 Earnings Call

October 31, 2006 10:00 am ET

Executives

Jandy Tomy - IR

Michael Soenen - President and CEO

Becky Sheehan - CFO

Analysts

Anthony Noto - Goldman Sachs

Troy Mastin - William Blair

Mark Mahaney - Citigroup

Arsola Moraine - Bear Stearns Asset Management

Justin Post - Merrill Lynch

Jeff Stein - KeyBanc Capital Markets

Andrew Bard - Post Advisory Group

Presentation

Operator

Ladies and gentlemen, thank you for standing by, and welcome to the First Quarter 2007 Earnings Call. During the presentation all participants will be in a listen-only mode. Afterwards we will conduct a question-and-answer session. (Operator Instructions). As a reminder this conference is being recorded Tuesday October 31. Your speakers for today are Michael Soenen and Becky Sheehan.

I would now like to turn the conference call over to Ms. Tomy. Please go ahead.

Jandy Tomy

Thank you. And welcome to FTD Group Inc.'s fiscal 2007 first quarter conference call. A press release was sent out this morning highlighting the Company's results. A copy of that release is available at the Company's website, www.ftd.com under the Investor Relations section.

Before we begin, I want to reiterate that this conference call contains various forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 regarding FTD Group Inc.'s outlook, anticipated revenue growth, and profitability. Also included are statements regarding the anticipated benefits of investments in new products, programs, and offerings, and statements regarding 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. These forward-looking statements are based on FTD Group Inc.'s current expectations, assumptions, estimates, and projections about the Company and its industry. Actual results could differ from those anticipated by the forward-looking statements. Certain factors that could cause these results to differ are detailed in the first quarter 2007 press release. We expressly disclaim any obligation to update forward-looking statements.

I would now like to turn the call over to Michael Soenen, President and CEO of FTD.

Michael Soenen

Thank you Jandy. And thanks everyone for attending. For those of you who've had a chance to get through the release you'll see we had just an amazing quarter, really great in all fronts. I am going to go through all that with you today, but before so, I'd like to just kind of set a quick agenda for the call. I'm going to take you through just some first quarter highlights; then Becky Sheehan is going to come on and walk you through the detail of the quarter. I'll come back and give some outlook on what we see going forward and hopefully, we'll move through all of that fairly quickly and then we'll open it up for Q&A for everybody on the call.

In terms of the first quarter highlights. The first quarter are the smallest quarter of the year. It's only about 17% of the revenue, but just looking at the numbers, it's clear that we really have things cooking around here. Our domestic business had 11.5% order growth for the quarter which really had a lot to do with the fact that we are seeing a much more rationale competitive environment in online search, our marketing team is developing some rather effective offline marketing campaigns, and we continue to see ourselves able to monetize our site through advertising revenue and other sources generating yet more revenue and earnings from that segment. Additionally, we are seeing some of the leverage in the investments that we made last year with respect to our investments in our website or order processing systems and in our call center environments, and when you kind of add up what we are seeing in top line and in the leverage that we are seeing with the certain investments you can see some of the investments that are really trying to flow through to you the investor. In terms of our domestic florist business we have seen about 3.9% of revenue growth that's growth excluding the Renaissance Card business we saw the year ago. I would say continue shrink we are seeing across the board, our product sales where those are the (inaudible) the containers we are selling to florists, the fresh flower sales all those initiatives are on or ahead of plan. Additionally, we are seeing increased penetration in the services we are selling to our customers both the websites we built, what we are doing with them in the Yellow Pages all of those products we are seeing across the board strengthen all of those product lines.

Finally, just planned cost reductions, I think we do a really a good job around here of keeping our cost structure fairly low and our ability to realize some of those efforts which we kind of engage in on an ongoing basis also have contributed to some of the betterment this quarter.

Finally, our international business, it is just going so well right now, over 25% increase in the consumer order volume. I would say this business is exactly where I would have expected it to be at this point. They are on plan and I am very pleased with the progress we are making there. Just as a quick reminder, this quarter only reflects two months of the results because of the acquisition that closed on July 31, but nonetheless and I am very pleased with where we are at this point.

In summary, 27%ish growth for the quarter over 45% growth in EBITDA, just kind of an across the board home run. So with that I would like to turn it over to Becky and let her walk you through some of the details, Becky.

Becky Sheehan

Thanks Mike. As Mike mentioned, we are very pleased by our first quarter performance. My comments this morning will highlight our results and our financial position and so let me begin with our consolidated results. Our first quarter revenue was $108.8 million, an increase of $22.9 million or 26.7% over the prior year's quarter. As Mike mentioned we acquired Interflora on July 31 and as a result [two month of variable] results are included within our first quarter. Interflora contributed $17.6 million of revenue and the remainder of the revenue growth was organic largely driven by order volumes and our domestic consumer business.

Let me remind you that $2.1 million of revenue in the first quarter of last year came from the Renaissance business, which we divested in December of last year. Excluding Renaissance from the prior year, our year-over-year comparable for our domestic business are very strong, 9% revenue growth in the quarter where we have no holiday. Even more noteworthy is our ability to grow the bottom line. As detailed in our release, our first quarter EBITDA excluding other income of $1.5 million was primarily related to foreign currency contracts we entered in connection with the Interflora acquisition was $18.7 million, up 45% from the first quarter a year ago when EBITDA was $12.9 million. Our consolidated operating margins increased to 14.1% from 12.1% last year and as a side note, our domestic businesses achieved operating margins of 15.5% compared with that 12.1% from the prior year.

All in net income for the quarter was $5.4 million or $0.18 per diluted share and that includes $0.03 per diluted share related to the other income which as I previously mentioned, is primarily related to the net foreign currency gains recognized during the quarter versus the year ago when net income was $3.4 million or $0.11.

Moving onto our segments. In our Domestic Consumer segment we recorded year-over-year first quarter revenue growth of 14%. This was primarily driven by an increase in the order volume. Our domestic consumer orders during the quarter totaled 768,000, up 11.5% from the prior year first quarter. Internet orders increased slightly to 88.1% from 88% last year. And average order value also increased slightly to $60.52 in the current quarter from $60.31 in the prior year quarter. As Mike mentioned, not only did we grow our top line, but we also improved profitability due to increased order volume, a reduction in marketing costs per order, and the addition of our advertising revenues. Our domestic consumer operating margins were 7.9% versus 6.3% last year. Resulting operating income for this segment was $3.8 million, a 44.5% increase over last year's first quarter.

Our Domestic Florist segment reported a decrease in revenues of 1.1% to $43.8 million in the first quarter of this year from $44.3 million in the prior year first quarter. But again, 2006 results included $2.1 million of revenue from the Renaissance Greeting Card business, which we no longer own. Excluding this revenue from last year to provide a more comparable measure, revenue was up 3.9%, primarily driven by strong system sales, and sales related to our online services as Mike mentioned. Operating margins in this business also remained strong, partially reflecting its planned cost reductions, as well as the benefit of divesting a non-core lower margin business. Margins for this quarter were 32.5% compared to 25.4% a year ago period. As a result, operating income in the Domestic Florist segment was up 26.4% despite of lower revenues.

Moving onto our International segment, revenues were $17.6 million in the first quarter, and operating income was $1.2 million, or 6.8% of revenues. Both were inline with our expectations. Consumer order volumes in this business grew at 25.6% compared with the prior year period. Let me remind you that this business is very similar to the rest of our domestic business. As a reminder though, the UK's Mother's Day is in March and therefore, it will fall in our fiscal third quarter.

Let me turn to some highlights on the balance sheet, at September 30, 2006 the Company's total debt balance is $349.5 million which includes notes payable related to the Interflora acquisition totaling $23.3 million. Total debt is up from $220.1 million at the end of the fiscal year primarily due to the new product agreement we entered into in order to finance the Interflora transaction. Note that we had 44 million available for borrowing under our revolving credit facility as of the end of the quarter. Our cash totaled $13.3 million. We remained committed to using our strong cash flows in ways to yield the most long-term shareholder value. Our bias remains with strengthening our balance sheet through debt pay down.

Capital expenditures for the quarter were $1.9 million primarily related to the continued technology improvement. And finally as a result of the Interflora acquisition, we have carefully reviewed what we consider to be the key metric of our consolidated business and I want to go through these with you now. For our domestic consumer segment, we will disclose total order volume, internet order volume as a percentage of the total, and average order value. We will no longer disclose specialty guest as a percentage of our total order volume which by the way for the quarter was 40.9% because we no longer believe this is a key metrics of our business. In our Domestic Florist Segment, materially all of our revenue and EBITDA is derived from our top 10,000 member. As we have demonstrated we have been able to consistently grow our florist business while letting the less profitable members continue to decline as we do not believe our members of ZT drivers of the domestic floral segment. We will no longer be reporting the size of our membership base to investors. All other reportable information will remain the same. In our international segment, we will report consumer order volume, internet order volume as a percentage of the total order and average value. I will now turn the call back over to Mike, who will comment on our outlook.

Michael Soenen

Thank you, Becky. More than anything I am just extremely pleased with the execution of our business plan. The team here is just doing an amazing job and I just can't thank them enough. In terms of where we are going and what we see, at current time, I think it's going to be more or the same. In the consumer business, we really saw the market rationalize this summer with respect to online search. We remain cautious about the holiday that’s certainly something that I don’t want to get too far ahead of myself on, but this certainly this more rationale environment has made things much easier for us around here. The progress being made by the marketing and merchandising teams both that are managing the day-to-day changes in the online marketing environment and just the new products, the stuff we are doing with [tied] old and the new products lines, we have revamp the florist. We are seeing huge improvements in our sales and flow through there and it is very, very encouraging and certainly on a technology side, the investments we have made to get our operating cost down both on the web and in our order processing environment in our call centers. We are starting to see the benefits of that now and I look forward and hoping to continue to repost benefits going forward.

In our floral segment, it is more or the same play block where we think we are going to continue to penetrate further our existing products sets. Our new products are showing good signs of traction early on in their launch periods and our growth initiative continues to move forward as we anticipate cash being in over 1000 retail locations for this Christmas holiday. As we think of -- our International segment, we think we can continue to derive growth there just by leveraging our marketing and technology experience between the two operations, continuing to let them run the playbook they've been running in terms of developing new products, and really keeping our eye on acquisition opportunities with the other not-for-profit countries and associations throughout year up as we believe that’s a very real growth initiative, something I'm focused on personally with Steve Richards, our CEO over there, and I envision us while there's nothing certainly in and I never commented on M&A activity, certainly something that we think over the next few years will be an opportunity for us.

Other than that, we’re just very pleased. It's been an early quarter. I don’t want to make a big deal about it. Certainly, we have some wind at our backs. I thought long and hard about bumping guidance for the quarter because we were so far ahead, I decided to be a little reserved, and let us get through Christmas before we do anything with the guidance, but certainly, we’re in a strong market now and we're performing very well in that market. And I look forward to coming back to you guys after the holiday, and we really see what we learn from Christmas, and giving you guys perhaps a better picture of where we think the year will come out. That said I do think we're in very good position right now to achieve the targets that are already set, and I look forward to updating you guys after the holiday. With that, that’s our call for the day. Thanks for your support. I guess I'd like to open it up for any questions anyone may have.

Question-and-Answer Session

Operator

Thank you. (Operator Instructions). Your first question comes from Anthony Noto with Goldman Sachs.

Anthony Noto - Goldman Sachs

Thank you very much. Mike you had mentioned that you have seen some of the cost benefits from some of the initiatives you have done over the last couple of years and the EBITDA margins were obviously up significantly on the year-over-year basis. So almost 300 basis points. I was wondering if you could drill any for us that margin expansion what really drove it, how much of it was mix versus some productivity savings and how much more do you think you can get over the next couple of years that’s a margin level that we had not previously thought [kind of] get through. So it is pretty significant. Thanks.

Michael Soenen

Yeah. Anthony I think a lot of it is on the productivity side. I think we have run very lean with respect to the technology around here, and we are focused on keeping order processing costs low, focusing the cost of servicing our customers very low, but still providing kind of a superior experience for our customers. And we have made some bigger investments both in terms of call center and we are seeing us -- we booked that big call center last year, we are seeing some scale there. We are also seeing the technology cost continue to hold check while we are kind of able to flow increased order volumes through that. And on the marketing side, just in our florist business, we are continuing to get more and more florist business while holding our marketing costs and promotional cost in check. So we're just trying to see kind of growth on our high margin business with no real changes in our fixed cost structure, and we are seeing more efficient processing of orders and customer care in our higher volume consumer business, and it's just a little bit of one of those perfect storms or we're just kind of hitting on all the cylinders at the same time.

Anthony Noto - Goldman Sachs

So do you think there is further upside in that level? I mean, could your long-term margins be closer to 20% on an EBITDA basis?

Michael Soenen

Yeah. I don’t think so. I think we are kind of there. I think we probably suggested to investors we were there before. There is always opportunities; we are always going to look for those and to drive to push our self higher. But I wouldn’t be planning for it from an investment standpoint, I do feel it's an obligation as CEO to find it though.

Anthony Noto - Goldman Sachs

Great, thank you.

Operator

Your next question comes from Troy Mastin from William Blair. Please proceed with your question.

Troy Mastin - William Blair

Good morning guys. Nice quarter.

Michael Soenen

Thanks Troy.

Troy Mastin - William Blair

First I wanted to ask about marketing cost, you said in the press release that you took advantage of opportunities in the marketplace which I assumes means on the marketing side you saw a downtick in marketing side. Just give us some perspective on what you are seeing in the marketplace, what you did in particular, how sustainable you think some of these things may be at least based on the (inaudible) today.

Michael Soenen

Well, look I think we have some changes in the marketplace, certainly ProFlowers are down owned by Liberty Media. 800-Flowers had a very poor quarter and the prior quarter not the one just reported to the one prior to that. And it kind of publicly stated that they were going to focus on profitability on top of at Teleflora they have had to replace their CEO, and I think there is a little bit of turnover there. When you added all lot what you had with competitive landscape that behaved much more rationally over the summer month and so rather than drive each other crazy for the same order volume, I think everybody focusing getting better at what they do and the online cost came down a bit. And certainly the growth rate effectively stopped and we saw it even come back little bit in some cases. So that was good relative to the expectations we have laid out for you guys. I have -- as I think through the rest of the year there is Christmas, Valentine's Day and Mother's Day kind of being the big event, Valentine's Day and Mother's Day we really rarely see much in terms of competition; if we do it is from our own industry. And I am hopeful that the other competitors behave rationally and this [space] us continue the way it is. I think Christmas is the one that as I think it through, last year we have a much broader competitive set. You have gift baskets and wine and cheese baskets. In that wider universe I think it's somewhat less predictable which is frankly why I didn’t take advantage of bumping guidance at this time. I want to see how we come through that holiday with a wider set of competitors knowing that I always have tremendous amount of confidence in Valentines and Mother's Day because the competitors have so much more narrow.

Troy Mastin - William Blair

Okay great. And then secondarily, I wanted to ask about the international business with less perspective on the market that you see over there, if you feel like you are gaining share, how fast is this market growing with your order volumes [zap] over 20%?

Michael Soenen

Yeah, I mean, I think we are still trying to find out for certain. Obviously, that’s a great number and we feel good about it. I think I want to be a little hesitant to this kind of raise the victory flag there yet. I think we've kind of laid out from the beginning for investors, I think we have few solid years of making investments both in terms of databases, in terms of marketing, in terms of what we want to do on the customer service side and we are going to kind of load the gun there a bit and shoot out of it. So I'm not -- I'm encouraged by the number, the number is obviously a very strong one and a better one than I had anticipated at this point. But I'm not really focused on that part of the business right now. I think we are more focused on making the key investments, getting ourselves ready for kind of a bigger longer run and really start to look for performance out of that business kind of 18 months out from now. And it was nice to have such a good metric to report to investors so quickly.

Troy Mastin - William Blair

Is it fair to say you -- we are not seeing any effects yet of the acquisition by FTD in terms of leveraging some of your things like technology and customer service?

Michael Soenen

We have made very, very little progress on that at this stage of the game.

Troy Mastin - William Blair

Okay, thank you very much.

Operator

Your next question comes from Mark Mahaney with Citigroup. Please proceed with your question.

Mark Mahaney - Citigroup

I want a little bit more on the international side. That unit growth, can you just give us a sense of how that trended versus over the last year? And then, are there particular -- are there major product differences and how Interflora sells in Europe that are different than in the US? In other words, are there particular products that seem to sell much better in those markets than what you are selling here? Thank you.

Michael Soenen

Mark, generically, the order -- the products that we sell, the price point, yes, certainly they tail out a bit at the local market. But the average order values are roughly the same. The way they go to market is roughly the same. There aren't any big differences there. I think the encouraging thing is that as this group had been a not-for-profit entity, I don’t think they were terribly focused on being a good consumer direct market. I think they focused quite a bit on their Florist segment but not as much on being a very strong consumer direct marketer. And the encouraging news to report there is that the 26% growth in unit is actually an accelerating number. So, now when we are seeing good growth but we are seeing it accelerate and so, certainly it’s a good sign early in terms of just pushing more and more units through that system. But we haven’t really begun to tap kind of the way, I think the real monetization of that business could be really three, four, five years down the road.

Mark Mahaney - Citigroup

And again what would you attribute that acceleration to?

Michael Soenen

I just think the group is really -- I mean the shift to a four profit mindset, the staffing with better human capital, which I think they have done an excellent job of, and really just getting a year or two of learnings behind them with respect to being kind of basic direct marketing one-on-one, they are just trying to learn from their mistakes and apply that. And we are seeing the lift as a result of those types of actions.

Mark Mahaney - Citigroup

Thank you very much.

Operator

(Operator Instructions). Your next question comes from [Arsola Moraine] with Bear Stearns Asset Management. Please proceed with your question.

Arsola Moraine - Bear Stearns Asset Management

Thanks. I wonder if you could talk a little bit about the other side of the Internet advertising space that is the folks you are buying that space from the Goggle's and Yahoo's and others and whether there are any changes in that environment in this year versus last year and how you would be looking at holiday?

Michael Soenen

Yeah, I mean, there are no changes. I mean I cannot go into it assuming that it is going to be hypercompetitive and difficult and that’s what we have planned for. And that’s what we always expect. I think what has been encouraging is that I think for the most part competitively we haven’t been making each other crazy in this space. I think we have seen kind of other categories come in and buying up media in this space they have been here in the auto companies, telecom have been big buyers of the media. But for the most part within our verticals things have been fairly normalized. And so I think that’s a good thing. I have no way to predict how my competitors lack and all I can tell investors is [somewhat to last year], for whatever reason people (inaudible) $50, $60, $70 on order, we are just not going to do it. We have already demonstrated, we will step out of the market at that point and we have a different revenue growth, but certainly deliver all the cash flow and earnings that we expect. And so that’s what we do in our tough times and I don’t foresee any of that. I foresee good times right now, but if that occurs we will act a lot quickly in that manner.

Arsola Moraine - Bear Stearns Asset Management

How quickly can you respond if things start to get crazy?

Michael Soenen

Daily, hourly.

Arsola Moraine - Bear Stearns Asset Management

Okay, thanks.

Operator

Your next question comes from Justin Post with Merrill Lynch. Please proceed with your question.

Justin Post - Merrill Lynch

Hi, Mike nice margin leverage in the quarter. Can we talk a little bit about Leonard Green, where are they out with their equity position at this point?

Michael Soenen

Yeah. I mean Leonard Green has got about 52% of the company. I think the people probably saw they filed the shelf offering a few weeks back. Now there's no offering contemplated at that time. I have no way to really know what they are going to do, longer term it's really nothing that’s been discussed. So I don’t have a lot of color there. But it's logical to expect that overtime they’re going to want to move out of their position in a reasonable manner. It hasn’t been discussed, but that’s kind of what I'm expecting, and we'll cross that bridge when we get to it.

Justin Post - Merrill Lynch

Okay, and in your internal cash models, and you've said that's probably your best source of or use of cash, why do you feel that way?

Michael Soenen

We were doing share buybacks before, and I just think now, I think we are 4.2 times total debt to EBITDA somewhere in that area. And, I mean we seem to get a lot of investor attention when we get below 4, and we seem to get a lot more when we get down to 3. And so, my goal would be just kind of deliver the balance sheet for a while, keep delivering, and get our self right for that next kind of international acquisition that hits the board. And right now, that’s just kind of my focus delever the balance sheet a bit, make sure I've got some firepower when the opportunities hit, and trying to get those investments in the balance sheet that I think can do -- or on the P&L, they’re going to be better than kind of what we’re doing with debt pay down.

Justin Post - Merrill Lynch

Okay.

Becky Sheehan

And as a reminder of (inaudible) share buyback a year ago, our stock price was much lower than it is today also.

Justin Post - Merrill Lynch

Okay, great. And when you talked about when on the road show about a year and a half ago, we talked a lot about how your consumer business can funnel orders into your florist business, do you still see that happening, or is there kind of a new focus for your florist business going forward?

Michael Soenen

No. I think it’s a big opportunity. I think, look, we've fairly demonstrated that by growing that consumer business, we have a lot of order volume with which to get through our customers, and that is helpful for their business, and it's helpful for ours. And so as we continue to grow that business, I'm looking at that as one of the key drivers along with developing new products, and along with getting further penetration of our existing products, but between those three levers, I am expecting us to continue to grow that business.

Justin Post - Merrill Lynch

Okay. And then last question, it looks like relative to our expectations, you beat less spending on the florist marketing side, have you narrowed your focus on who you really focused on for that business as far as kind of your customers or is there any dramatic change in strategy in the florist business?

Michael Soenen

There is no real change in strategy. I think one of the things I have done just a bad job of communicating as a CEO is that materially all of our revenue and EBITDA comes out of our top 10,000 florists. Okay. You know people will say well, I've got 19,000 or 18.5 or what's happening, when in a fact these florist from the tail don’t do a lot in terms of revenue and EBITDA. And so what we really have been doing is really horning down in seeing, what is that our top customers want. What is that they respond to and need most and really focusing our efforts on the customers who are helping us move the needle and less so, about the customers who are kind of on a very tail that kind of [shone] a lot. And so, that’s something we’ve been migrating into. It's not a big shift one way or another. But it's something that as we get more and more orders and we can reward more and more our very top customers, it is better for them and it's better for us.

Justin Post - Merrill Lynch

That hurt your US coverage at all as far as what we you can deliver to their consumers or any major ramification to that strategy?

Michael Soenen

None. I think we'll give you some examples, there is something like 12,000 McDonald's in the country and I think, we look at it from a distribution standpoint and we look at the math and said, God, with 5,000 in the right spot, we can get this done and 10,000 is helpful just to help us get through the peak and all the other stuff. I don’t see -- I want to be clear for investors -- I don’t see us going to 10,000 numbers. That is not what I see at all. I am just adjusting that we're focusing on where the revenue and EBITDA opportunities are and focusing those marketing dollars appropriately.

Justin Post - Merrill Lynch

Okay. And last question, as we look forward to the next quarter, what do you think the key drivers are of potential upside or downside relative to last year what happened last year?

Michael Soenen

Yes, I think we are going to run the same playbook. I think depending on where online marketing cost go around the holiday, if we see a very rational environment I would expect potential betterment and if we see a somewhat irrational environment I would expect us to have last revenue and protect our bottom line the best we can. That’s just kind of the way I'd like to run it. And I think that would be the one metric in the next quarter I would keep an eye on. Everything else we are cruising, we seem to be doing a decent job. I just can’t say enough how happy I am with the work the team is doing. They are just doing an amazing job. But that’s the one variable that we probably have less control over that I would want to keep an eye on and just make sure people are aware of.

Justin Post - Merrill Lynch

Has activity for the holidays picked up a little bit as October has progressed in your side?

Michael Soenen

We haven’t seen anything changed at this point, but it's way too early for that.

Justin Post - Merrill Lynch

Thank you.

Operator

Your next question comes from Jeff Stein with KeyBanc Capital Markets. Please proceed with our question.

Jeff Stein - KeyBanc Capital Markets

I am wondering if you might talk a little bit about pricing of your products and services to florist. Given your margin expansion wondering if you have been getting any type of a lift from price increase.

Michael Soenen

Not really. There isn’t a terribly much change on pricing. I think for the most part it is mature the same as it was a year ago.

Jeff Stein - KeyBanc Capital Markets

Okay. Thank you.

Operator

Your next question comes from [Andrew Bard with Post Advisory Group]. Please proceed with your question.

Andrew Bard - Post Advisory Group

Yes. Just a quick conformation for me, on your international business is there any significant difference in the seasonality of that business relative to the US domestic business as we look at your revenues quarter over quarter if you track roughly the same?

Michael Soenen

I think the roughly the same. I think we just need to acknowledge that Mother's Day will be in the third quarter versus the fourth quarter.

Andrew Bard - Post Advisory Group

Got you.

Michael Soenen

And so I think that’s just one thing I want to highlight. Sometimes we run into this with investors [where] Easter shifts between quarters. Now just to help complicate things a bit for everybody, we’re going to have a Mother's Day that move between quarters as well. But at the end of the day, the size of the peaks are roughly the same. It’s a matter of where they fall on occasion.

Andrew Bard - Post Advisory Group

Okay, very good.

Operator

Ms. Tomy, there are no further questions at this time. I will now turn the call back to you. Please continue with your presentation or closing remarks.

Michael Soenen

Yeah, I just want to thank everybody. Obviously, there's been a lot going on in the business for the last two years. I think we were starting to see kind of the results of rather hard work, and we’re going to put our heads down and get back to work for the rest of the year and hopefully we'll keep bringing you some good news. More than anything, I just want to appreciate your support and for being there for us. Thanks.

Jandy Tomy

That was FTD Group Inc.'s fiscal 2007 first quarter conference call. If you did not have the opportunity to listen to the entire call, a replay will be available through November 14, 2006 by calling 1-800-633-8284 for North American callers, or 402-977-9140 for international callers. Please mention conference ID 21307097. Thank you.

Operator

Ladies and gentlemen, that does conclude the conference call for today. We thank you for your participation, and we ask that you please disconnect your lines.

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