UNITED ONLINE PLANNING TO SPIN OFF FTD AS A PUBLICLY TRADED COMPANY

The board of directors of United Online, Inc. (Nasdaq: UNTD), FTD’s parent company, has approved a preliminary plan to split off FTD into a separate public company.

United Online acquired FTD in 2008 for $754 million, but now it wants to separate the two businesses into independent companies.

The proposed spin-off of FTD is expected to take the form of a tax-free pro-rata distribution to United Online stockholders. For example, if a stockholder owns 1 percent of United Online at the time of the FTD spin-off, then, immediately following the spin-off, the stockholder would own 1 percent of each of FTD and United Online, with the latter comprising social networking sites Memory Lane™  and Classmates^®; Internet service providers NetZero^®and Juno^®; website hosting provider MySite; and online shopping rewards program MyPoints^®.

The transaction is expected to be completed within the next 12 months, targeting the first quarter of 2013; however, the company notes that there is “no assurance that any separation or other transaction will occur or, if one does occur, there can be no assurance as to its terms or timing.”

Mark R. Goldston, chairman, president and chief executive officer of United Online, explains: “We believe it currently is in the best interests of United Online and its stockholders to separate these distinct businesses. The separation is expected not only to unlock value for our stockholders but also to provide significant operational and strategic flexibility for these businesses, better position them to capitalize on their well-recognized brands, and enhance long-term stockholder value.”

United Online has retained Moelis & Company LLC, a global investment bank, as its financial advisor to assist with the proposed spin-off of FTD.

For the six months ended June 30, 2012:

• Revenue for FTD grew year over year 2.6 percent, from $335.2 million to $343.9 million.
           
• Operating income for FTD increased 9.4 percent, from $26.6 million to $29.1 million in the first six months of 2011.

• Revenue for United Online declined year over year 4.6 percent, from $497.1 million to $474.1 million.

In the first six months of 2011, FTD's net income decreased 25.3 percent, from $26.9 million to $20.1 million.