Thursday, November 25, 2004

FTD seeks to bloom again as a public firm... BUT....

FTD seeks to bloom again as a public firm

By Rob Kaiser
Tribune staff reporter
Published November 25, 2004

Like a spurned suitor returning with an armful of flowers, FTD Inc. is seeking to win its way back into investors' hearts.

The Downers Grove-based flower delivery service--which saw its shares plunge after going public in 1999 and went private earlier this year--filed papers this week to return as a publicly traded company.

Now owned by the Los Angeles-based private equity firm Leonard Green & Partners, FTD is seeking to raise as much as $180 million. The company did not disclose how many shares it plans to sell or the price of the shares being offered.

The financial documents filed this week show a growing company saddled with sizable debt.

FTD posted revenue of $397.1 million in the 12-month period ending June 30 and a net loss of $6.1 million.

The company did have $13.7 million in income from operations in the period, but that was wiped out by $16.4 million in interest payments and other expenses.

As of Sept. 30, FTD had assets of $581.3 million and $428.6 million in debt. It had $1.2 million in cash.

The high debt is a result of the private equity firm's acquisition of the company.

FTD plans to use money it raises from the public offering to buy back preferred stock issues.

A company spokeswoman declined to comment beyond the public filing.

FTD sells flowers to consumers through its Web site and toll free number, generating more than 3.5 million orders annually that are filled by the 20,000 FTD member florists.

In the 12-month period that ended June 30, consumer sales brought in $216.8 million, more than half of FTD's revenues. The company makes the remainder of its money by providing technology, services and merchandise to the FTD florists.

FTD's first foray into the public markets was in September 1999, when the company spun its online unit into the inflating Internet bubble. Following the dot-com burst, was reconnected with its FTD parent in 2002, and the two entities were fused into one public company.

An investment fund run by Leonard Green & Partners bought FTD in February, and took the company private.

Michael Soenen, a 34-year-old who had been at the helm of when it went public, returned to the company in May as FTD's president and chief executive.

Selling directly to consumers has been a growing area for the company.

Revenue from consumer orders grew from $154.1 million in fiscal year 2002 to $191 million the following year to $216.8 million in the most recent year. During the quarter ended Sept. 30, the consumer segment generated sales of $36.4 million, up 14 percent from the year-earlier quarter.

FTD plans to continue its growth in this area by expanding its marketing partnerships and specialty gift offerings and by offering lower-priced flower arrangements to younger consumers, according to the filing.

Copyright © 2004, Chicago Tribune

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