FTD Group CEO says international sales and acquisitions will grow business

During a midday conference call, executives of FTD Group, Inc. (NYSE: FTD) said international growth and acquisition activity will propel the provider of flowers and gift products to earnings above Wall Street estimates. The company said in a press release it expects earnings of $1.18 per share, compared with analyst estimates of $1.04, and revenue of $645 million, compared with analyst estimates of $653.9 million, for the 2008 fiscal year ending June 30. The 2008 outlook compares with earnings of $1.08 per share and revenue of $613 million for 2007.

“Based on everything I can see today, I think that’s a good stake to put in the ground,” CEO Mike Soenen said during the call.

Domestic pricing opportunities, international growth and a sales increase would enable the company to beat its forecast, he said during the call.

During the next 12 months, FTD will continue to look both domestically and internationally for merger and acquisition targets. Last summer, the company acquired Interflora, a British flower delivery business.

“I would expect and hope investors would expect that we will be very active on that front,” Soenen said. “We’re going to continue to look for other opportunities.”

The chief executive said the company expects a “fairly aggressive” online marketing environment during the 2008 fiscal year, and that FTD will focus on offline campaigns, retention marketing and corporate accounts in an effort to counter the fierce online situation. Additionally, he said the company will continue to expand its gift segment through existing partnerships with companies such as Build-A-Bear Workshop, Inc (NYSE: BBW), Harry & David Holdings, Mrs. Fields Famous Brands and Godiva Chocolatier.

FTD doesn’t have any “huge” tech investments planned for the next year, Soenen said, but will make a couple investments to improve conversion rates.

The Downers Grove, Ill.-based firm plans to expand its online and technology services, the CEO said. The company offers website and retail business services to florists. Also, FTD expects to expand its fresh flower business – where the company acts as the middleman between flower growers and florists. The fresh flower segment currently has about 1,000 customers that actively buy each month.

Soenen said he sees the international market as a target for strong growth.

“The [international] market is just starting to embrace the Internet for commerce,” he said. “It’s like the United States was five years ago.”

The business is expanding its product set as well, the CEO said. FTD would like to expand its wine delivery - about 800 florists presently have licenses to deliver wine - and its traditional gift business.

Before the opening bell, FTD announced fourth-quarter revenue of $169.8 million, below Wall Street estimates of $173.4 million but above revenue of $141.5 million during the same period of 2006. For the three months ended June 30, FTD’s net income was $10.8 million, or $0.36 a share, which beat analyst expectations of $0.28 per share. In 2006, FTD’s fourth-quarter net income was $8.8 million, or $0.30 a share.

“We’ve been very pleased with the year. Clearly, it’s been a very competitive year, both in terms of the online market and the entry of 1-800-FLOWERS in our business-to-business space, making things more difficult than perhaps in past years,” Soenen said. “Despite that, I believe we’ve managed the company very well. We had very strong operating results.”

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