Use these links to rapidly review the document
TABLE OF CONTENTS
INDEX TO FINANCIAL STATEMENTS
TABLE OF CONTENTS

Table of Contents

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No.          )

Filed by the Registrant ý

Filed by a Party other than the Registrant o

Check the appropriate box:

ý

 

Preliminary Proxy Statement

o

 

Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))

o

 

Definitive Proxy Statement

o

 

Definitive Additional Materials

o

 

Soliciting Material under §240.14a-12

 

FTD Companies, Inc.

(Name of Registrant as Specified In Its Charter)

 

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

o

 

No fee required.

ý

 

Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
    (1)   Title of each class of securities to which transaction applies:
        Common Stock, par value $0.001 per share, of Provide Commerce, Inc.
 
    (2)   Aggregate number of securities to which transaction applies:
        1,000 shares of Common Stock of Provide Commerce, Inc.
 
    (3)   Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):
        In accordance with Section 14(g) of the Exchange Act, the filing fee was determined by multiplying the book value of the Common Stock of Provide Commerce, Inc. being acquired by FTD Companies,  Inc. (as reflected in the equity section of the unaudited condensed consolidated and combined balance sheet of Provide Commerce, Inc. as of June 30, 2014) of $402,682,000 by 0.0001288
 
    (4)   Proposed maximum aggregate value of transaction:
        $402,682,000
 
    (5)   Total fee paid:
        $51,865
 

o

 

Fee paid previously with preliminary materials.

o

 

Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.

 

 

(1)

 

Amount Previously Paid:
        
 
    (2)   Form, Schedule or Registration Statement No.:
        
 
    (3)   Filing Party:
        
 
    (4)   Date Filed:
        
 

Table of Contents

LOGO

[    •    ], 2014

Dear Fellow Stockholder:

        FTD Companies, Inc. ("FTD," "we," "us" or "our"), Liberty Interactive Corporation ("LIC") and Provide Commerce, Inc., an indirect wholly owned subsidiary of LIC ("Provide Commerce") have entered into a Stock Purchase Agreement, dated July 30, 2014 (the "stock purchase agreement"), pursuant to which FTD (through a wholly owned subsidiary) proposes to acquire from a wholly owned subsidiary of LIC all of the issued and outstanding shares of common stock, par value $0.001 per share, of Provide Commerce, for an aggregate purchase price of approximately $430 million (the "transaction"). The purchase price consists of (i) cash consideration of $121 million and (ii) 10.2 million shares (the "FTD shares") of FTD's common stock, par value $0.0001 per share. The FTD shares represent the number of shares of FTD common stock that would equal 35% of the post-closing issued and outstanding shares of FTD common stock (based on the number of shares issued and outstanding on July 29, 2014), valued for purposes of the transaction at the volume weighted average closing price of FTD common stock for the ten trading days ended July 28, 2014.

        On behalf of the Board of Directors of FTD, we cordially invite you to attend a special meeting of our stockholders, which will be held on [    •    ], 2014 at [    •    ] Central Time, at our corporate offices located at 3113 Woodcreek Drive, Downers Grove, IL 60515. At the special meeting, you will be asked to consider and vote upon: (1) a proposal to approve the issuance of the FTD shares to a wholly owned subsidiary of LIC in the transaction (the "stock issuance") and (2) a proposal to adjourn the special meeting, if necessary or appropriate, for the solicitation of additional proxies in the event that there are not sufficient votes at the time of the special meeting to constitute a quorum or to approve the stock issuance.

        Our common stock is listed on the NASDAQ Global Select Market under the symbol "FTD". We are seeking stockholder approval of the stock issuance in connection with the transaction to satisfy NASDAQ Listing Rule 5635(a), which requires stockholder approval prior to the issuance of securities in connection with the acquisition of stock or assets of another company if the issuance would constitute more than 20% of the total number of shares of FTD common stock outstanding before the issuance. If the stock issuance is approved, the FTD shares will be issued to a wholly owned subsidiary of LIC in a private placement transaction under Section 4(a)(2) of the Securities Act of 1933, as amended, and will be subject to certain restrictions on transfer.

        The stock issuance must be approved by the holders of a majority of the shares of FTD common stock represented in person or by proxy and entitled to vote on the matter, provided that a quorum is present in person or by proxy at the special meeting. Adjournment of the special meeting, if necessary or appropriate, for the solicitation of additional proxies requires the affirmative vote of the holders of a majority of the shares of FTD common stock represented in person or by proxy and entitled to vote on the matter, whether or not a quorum is present at the special meeting.

        Stockholders of record at the close of business on [    •    ], 2014 are entitled to receive notice of, and to vote at, the special meeting and any adjournment or postponement thereof.

        AFTER CAREFUL CONSIDERATION, OUR BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR THE PROPOSAL TO APPROVE THE STOCK ISSUANCE AND FOR THE PROPOSAL TO ADJOURN THE SPECIAL MEETING, IF NECESSARY OR APPROPRIATE, TO SOLICIT ADDITIONAL PROXIES.


Table of Contents

        This proxy statement provides you with detailed information about FTD, Provide Commerce, the stock issuance and the transaction. You may obtain additional information about us from documents that we have filed with the Securities and Exchange Commission as described under "Where You Can Find More Information" beginning on page 123 of the accompanying proxy statement. We strongly encourage you to carefully read the accompanying proxy statement and the information incorporated by reference into the accompanying proxy statement. Before deciding how to vote on the proposal to authorize the stock issuance, you should consider the information contained in the section entitled "Risk Factors" beginning on page 26 of the accompanying proxy statement.

        It is very important that your vote be represented at the special meeting regardless of the number of shares of FTD common stock you own. Even if you plan to attend the special meeting, we urge you to submit your vote promptly. You may vote your shares via a toll-free telephone number, over the Internet, or by marking, signing and dating your proxy card and returning it in the envelope provided, as described in further detail herein. Voting by telephone, over the Internet or by proxy card will not prevent you from voting in person, but will ensure that your vote is counted if you are unable to attend the special meeting.

        Thank you for your cooperation and continued support.

    On behalf of the Board of Directors,

 

 

Robert Berglass
Chairman of the Board of Directors

 

 

Robert S. Apatoff
President, Chief Executive Officer and Director

        Neither the Securities and Exchange Commission nor any state securities regulator has approved or disapproved the proposed issuance of shares of FTD common stock in connection with the transaction or determined whether the accompanying proxy statement is truthful or complete. Any representation to the contrary is a criminal offense.

        These proxy materials are being mailed to stockholders of record on or about [    •    ], 2014.


Table of Contents

LOGO

NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
[    •    ], 2014

        A special meeting of stockholders of FTD Companies, Inc. ("FTD," "we," "us" or "our") will be held on [    •    ], 2014 at [    •    ] Central Time, at our corporate offices located at 3113 Woodcreek Drive, Downers Grove, IL 60515, for the following purposes:

        The accompanying proxy statement provides you detailed information about these items of business.

        Stockholders will also transact such other business as may properly come before the special meeting or any adjournment or postponement thereof. At this time, our board of directors knows of no other proposals or matters that will be presented at the special meeting.

        Only stockholders of record of FTD common stock at the close of business on [    •    ], 2014, the record date, are entitled to notice of, and to vote at, the special meeting and any adjournment or postponement thereof. Our stockholders must approve the stock issuance in accordance with the terms of the stock purchase agreement in order for us to complete the transaction.

        AFTER CAREFUL CONSIDERATION, OUR BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR THE PROPOSAL TO APPROVE THE STOCK ISSUANCE AND FOR THE PROPOSAL TO ADJOURN THE SPECIAL MEETING, IF NECESSARY OR APPROPRIATE, TO SOLICIT ADDITIONAL PROXIES.


Table of Contents


YOUR VOTE IS IMPORTANT!

        Your vote is very important. Whether or not you plan to attend the special meeting, we hope you will vote as soon as possible. Please vote before the special meeting using the Internet, telephone or by signing, dating and mailing the proxy card in the pre-paid envelope, to ensure that your vote will be counted. Please review the instructions on each of your voting options described in the accompanying proxy statement. Your proxy may be revoked before the vote at the special meeting by following the procedures outlined in the accompanying proxy statement.

    On behalf of the Board of Directors,

 

 

Robert Berglass
Chairman of the Board of Directors

 

 

Robert S. Apatoff
President, Chief Executive Officer and Director

Downers Grove, Illinois
[    •    ], 2014


Table of Contents


ADDITIONAL INFORMATION

        Additional business and financial information about FTD can be found in documents previously filed by us with the U.S. Securities and Exchange Commission (the "SEC"). This information is available to you without charge at the SEC's website at www.sec.gov. In addition to receiving the proxy statement from FTD in the mail or obtaining the information on the SEC's website, FTD stockholders will also be able to obtain a proxy statement, free of charge, from FTD at its website, www.ftdcompanies.com, or by requesting copies in writing or by e-mail using the following contact information:

FTD Companies, Inc.
c/o Investor Relations
3113 Woodcreek Drive
Downers Grove, IL 60515
ir@ftdi.com

        You may also request additional copies from our proxy solicitor, D.F. King & Co., Inc., using the following contact information:

D.F. King & Co., Inc.
48 Wall Street, 22nd Floor
New York, NY 10005
Collect: (212) 269-5550
Toll free: (800) 714-3313
Email address: FTD@dfking.com

        If you would like to request any documents, please do so by [    •    ], 2014 in order to receive them before the special meeting.

        See "Where You Can Find More Information" beginning on page 123 for more information about the documents previously filed by us with the SEC and incorporated herein by reference.

        In addition, if you have questions about the transaction, you may contact our proxy solicitor, D.F. King & Co., Inc., by telephone at (800) 714-3313 (toll-free) or via email at FTD@dfking.com.

        All information contained in the accompanying proxy statement regarding Provide Commerce was provided by Provide Commerce and LIC.


Table of Contents


TABLE OF CONTENTS

 
  Page  

Summary

    1  

Special Meeting of FTD Stockholders (See page 36)

    1  

The Transaction (See page 41)

    2  

The Companies (See page 42)

    3  

Board Recommendation (See page 50)

    3  

Reasons for the Transaction (See page 50)

    4  

Opinion of FTD's Financial Advisor (See page 55)

    4  

Interests of Certain Persons in the Transaction (See page 63)

    4  

FTD Board of Directors Following the Transaction (See page 66)

    5  

Impact of the Stock Issuance on Existing FTD Stockholders (See page 67)

    5  

Material United States Federal Income Tax Consequences of the Transaction to FTD Stockholders (See page 67)

    6  

Accounting Treatment of the Transaction (See page 67)

    6  

Appraisal Rights (See page 67)

    6  

Regulatory Approvals and Clearances (See page 67)

    6  

Federal Securities Law Consequences; Restrictions on Transfer (See page 67)

    6  

Financing of the Transaction (See page 68)

    6  

The Stock Purchase Agreement (See page 70)

    7  

The Investor Rights Agreement (See page 81)

    9  

Summary Historical Financial Data

    10  

Summary Unaudited Pro Forma Combined Financial Data (See page 112)

    13  

Questions and Answers

    15  

Special Note Concerning Forward-Looking Statements

    24  

Risk Factors

    26  

Special Meeting of FTD Stockholders

    36  

Date, Time and Place

    36  

Purpose of the Special Meeting

    36  

Voting; Quorum

    36  

Voting Procedure

    37  

Adjournments and Postponement

    38  

Solicitation

    38  

Recommendation of the FTD Board of Directors

    39  

Householding

    39  

Stockholder Proposals for 2015 Annual Meeting

    39  

The Transaction

    41  

General Description of the Transaction

    41  

The Companies

    42  

Background of the Transaction

    43  

Board Recommendation

    50  

Reasons for the Transaction

    50  

Opinion of FTD's Financial Advisor

    55  

Certain Financial Projections

    62  

Interests of Certain Persons in the Transaction

    63  

FTD Board of Directors Following the Transaction

    66  

Impact of the Stock Issuance on Existing FTD Stockholders; Effect of Transaction

    67  

Material United States Federal Income Tax Consequences of the Transaction to FTD Stockholders

    67  

Accounting Treatment of the Transaction

    67  

i


Table of Contents

 
  Page  

Appraisal Rights

    67  

Regulatory Approvals and Clearances

    67  

Federal Securities Law Consequences; Restrictions on Transfer

    67  

Financing the Transaction

    68  

The Stock Purchase Agreement

    70  

Terms of the Transaction

    70  

Representations and Warranties

    70  

Representations and Warranties Made by LIC and Provide Commerce

    71  

Representations and Warranties Made by FTD

    71  

Interim Covenants

    72  

Cooperation

    73  

Proxy Statement

    73  

The Special Meeting of FTD Stockholders

    73  

Alternative Proposals, Superior Proposals and Non-Solicitation

    73  

Recommendation Changes

    74  

Actions to Complete the Transaction

    75  

Regulatory Approvals

    75  

Employee Benefit Matters

    76  

Financing

    76  

Investor Directors

    76  

RedEnvelope

    76  

Closing Conditions

    77  

Termination

    78  

Termination Fees

    78  

Representation and Warranty Survival

    79  

Indemnification by LIC

    79  

Indemnification by FTD

    79  

Exclusive Relief

    80  

Expenses and Fees

    80  

Governing Law

    80  

The Investor Rights Agreement

    81  

Ownership Cap

    81  

Permitted Tender Offer

    81  

Takeover Defense

    82  

Other General Standstill Provisions

    82  

Notification Right

    84  

Participation Rights

    84  

Quorum Requirement

    86  

Transfer Restrictions

    86  

Registration Rights

    87  

LIC Representation on the FTD Board of Directors

    88  

Affiliates of LIC

    89  

Representations and Warranties

    89  

Termination

    90  

Governing Law

    90  

Securities Ownership of Certain Beneficial Owners and Management of FTD

    91  

Comparative Per Share Data

    94  

Comparative Historical and Pro Forma Per Share Data

    94  

Historical Common Stock Market Price and Dividend Data

    94  

FTD Dividend Policy

    95  

ii


Table of Contents

 
  Page  

Provide Commerce's Business

    96  

General

    96  

Industry Overview

    96  

Business Strategy

    96  

Competition

    97  

Seasonality

    97  

Products

    98  

Suppliers and Distribution Facilities

    98  

Customer Service

    98  

Technology and Systems

    98  

Regulation

    99  

Employees

    99  

Proprietary Rights

    99  

Foreign and Domestic Operations

    99  

Selected Historical Consolidated and Combined Financial Data Of Provide Commerce

    100  

Provide Commerce's Management's Discussion and Analysis of Financial Condition and Results of Operations

    101  

Overview

    101  

Consolidated and Combined Operating Results

    101  

Six Months Ended June 30, 2014 compared to Six Months Ended June 30, 2013

    101  

Years Ended December 31, 2013, 2012 and 2011

    103  

Year Ended December 31, 2013 compared to Year Ended December 31, 2012

    103  

Year Ended December 31, 2012 compared to Year Ended December 31, 2011

    105  

Liquidity and Capital Resources

    106  

Off-Balance Sheet Arrangements

    108  

Qualitative and Quantitative Risk

    108  

Critical Accounting Policies

    108  

Recent Accounting Pronouncements

    110  

Unaudited Pro Forma Combined Financial Information of FTD Companies, Inc

    112  

Where You Can Find More Information

    123  

Index to Financial Statements

    F-1  

Annexes

   
 
 

Annex A: Stock Purchase Agreement

   
 
 

Annex B: Form of Investor Rights Agreement

       

Annex C: Opinion of Moelis & Company LLC

       

iii


Table of Contents

 


SUMMARY

        This summary highlights some of the information in the annexes attached to, and the documents incorporated by reference into, this proxy statement. It does not contain all of the information that is important to you. We urge you to read this proxy statement, as well as the annexes to and the documents incorporated by reference into, this proxy statement, carefully and in their entirety to understand fully the stock purchase agreement, the investor rights agreement, the transaction and the stock issuance. The parenthetical page references included below direct you to a more complete description of the topics presented in this summary. See "Where You Can Find More Information" beginning on page 123 of this proxy statement.


Special Meeting of FTD Stockholders (See page 36)

        The special meeting of the stockholders of FTD Companies, Inc. ("FTD," "we," "us" and "our") will be held on [    •    ], 2014 at [    •    ] Central Time, at our corporate offices located at 3113 Woodcreek Drive, Downers Grove, IL 60515, for the following purposes:

    to approve the issuance (the "stock issuance") of 10,203,010 shares (the "FTD shares") of FTD common stock, par value $0.0001 per share ("FTD common stock"), to a wholly owned subsidiary of Liberty Interactive Corporation ("LIC"), pursuant to the Stock Purchase Agreement, dated July 30, 2014 (the "stock purchase agreement"), by and among FTD, LIC and Provide Commerce, Inc., an indirect wholly owned subsidiary of LIC ("Provide Commerce"), pursuant to which FTD (through a wholly owned subsidiary) proposes to acquire from a wholly owned subsidiary of LIC all of the issued and outstanding shares of common stock, par value $0.001 per share, of Provide Commerce (the "transaction"); and

    to adjourn the special meeting, if necessary or appropriate, for the solicitation of additional proxies in the event that there are not sufficient votes at the time of the special meeting to constitute a quorum or to approve the stock issuance.

        Our stockholders must approve the stock issuance in accordance with the terms of the stock purchase agreement in order for us to complete the transaction.

        Only stockholders of record of FTD common stock at the close of business on [    •    ], 2014, the record date, are entitled to notice of, and to vote at, the special meeting and any adjournment or postponement thereof. You are entitled to one vote on each matter submitted to stockholders at the special meeting for each share of FTD common stock held as of the record date. At the close of business on the record date, [    •    ] shares of FTD common stock were issued and outstanding.

        The affirmative vote of the holders of a majority of the shares of FTD common stock represented in person or by proxy and entitled to vote on the matter is required for the approval of the stock issuance, provided that a quorum is present in person or by proxy at the special meeting. A properly executed proxy marked "Abstain" with respect to such matter will be counted for purposes of determining whether there is a quorum and will have the effect of a vote AGAINST the stock issuance.

        The affirmative vote of the holders of a majority of the shares of FTD common stock represented in person or by proxy and entitled to vote on the matter is required for the approval of the adjournment of the special meeting, if necessary or appropriate, for the solicitation of additional proxies whether or not a quorum is present at the special meeting. A properly executed proxy marked "Abstain" with respect to such matter will be counted for purposes of determining whether there is a quorum and will have the effect of a vote AGAINST the adjournment of the special meeting.

 


Table of Contents

        If you do not provide voting instructions to your brokerage firm, bank, broker-dealer or other similar organization with respect to the proposal to approve the stock issuance or the proposal to adjourn the special meeting, such organization may not exercise discretion and would be prohibited from voting your shares of FTD common stock with respect to those proposals. In such case, if such organization signs and returns a proxy with respect to your shares of FTD common stock, but does not vote on such proposals, your shares will be reflected as "broker non-votes." Such "broker non-votes" will not be counted for purposes of determining whether there is a quorum. Assuming a quorum is present, "broker non-votes" will have no effect on the proposal to approve the stock issuance or the proposal to adjourn the special meeting, if necessary or appropriate, to solicit additional proxies.

        This solicitation is made on behalf of our board of directors, and we will pay the costs of solicitation. Copies of solicitation materials will be furnished to banks, brokerage firms and other custodians, nominees and fiduciaries holding shares in their names that are beneficially owned by others so that they may forward the solicitation material to such beneficial owners upon request. We will reimburse banks, brokerage firms and other custodians, nominees and fiduciaries for reasonable expenses incurred by them in sending proxy materials to our stockholders. In addition to the solicitation of proxies by mail, our directors, officers and employees may solicit proxies by telephone, facsimile or personal interview. No additional compensation will be paid to these individuals for any such services. We have engaged D.F. King & Co., Inc. to assist in the solicitation of proxies for the special meeting and will pay D.F. King & Co., Inc. a fee of approximately $12,500, plus reimbursement of out-of-pocket expenses.


The Transaction (See page 41)

        On July 30, 2014, FTD, LIC and Provide Commerce entered into the stock purchase agreement. Pursuant to the stock purchase agreement, FTD, Inc., a wholly owned subsidiary of FTD, will acquire from a wholly owned subsidiary of LIC all of the issued and outstanding shares of common stock, par value $0.001 per share, of Provide Commerce for an aggregate purchase price of approximately $430 million. The purchase price consists of (1) cash consideration of $121 million, and (2) the FTD shares, totaling 10,203,010 shares of FTD common stock. The cash portion of the purchase price is subject to adjustment for changes in Provide Commerce's working capital as of the date of closing of the transaction, certain transaction expenses and other customary adjustments that may be determined at or after the closing. The stock portion of the purchase price consists of the number of shares of FTD common stock that would equal 35% of the post-closing issued and outstanding shares of FTD common stock (based on the number of shares issued and outstanding on July 29, 2014), valued for purposes of the transaction at the volume weighted average closing price of FTD common stock for the ten trading days ended July 28, 2014.

        The parties have also agreed that prior to closing the transaction, LIC will separate, by means of a distribution, the RedEnvelope business from the Provide Commerce business. The RedEnvelope business will be retained by LIC and will not be part of the transaction.

        Concurrent with the closing of the transaction, FTD and LIC also will enter into an Investor Rights Agreement (the "investor rights agreement") governing certain rights of and restrictions on LIC in connection with the shares of FTD common stock that LIC will own following the transaction.

        As of June 30, 2014, FTD and Provide Commerce incurred transaction costs of $1.7 million each. FTD expects to incur approximately $13 to $15 million in total transaction costs. Provide Commerce expects to incur approximately $4 to $5 million in total transaction costs. We also expect to incur integration costs associated with combining the companies and the achievement of synergies, which may be material. We are in the process of assessing such costs.

 

2


Table of Contents


The Companies (See page 42)

FTD Companies, Inc.

        FTD is a premier floral and gifting company. FTD provides floral, gift and related products and services to consumers, retail florists, and other retail locations primarily in the United States ("U.S."), Canada, the United Kingdom ("U.K."), and the Republic of Ireland. The business uses the highly-recognized FTD® and Interflora® brands, both supported by the iconic Mercury Man logo that is displayed in nearly 40,000 floral shops in 150 countries. FTD's portfolio of brands also includes Flying Flowers, Flowers Direct, and Drake Algar in the U.K. We maintain our principal executive offices at 3113 Woodcreek Drive, Downers Grove, IL 60515. Our telephone number is (630) 719-7800.

Provide Commerce, Inc.

        Provide Commerce, acquired by LIC in February 2006, is a leading ecommerce retailer of high quality gifts backed by superior customer service. With a portfolio of brands that offer fresh flowers, gourmet food products, unique personalized gifts, and other gifting items, Provide Commerce presents a wide assortment of gifting options for consumers at a variety of price points. Provide Commerce utilizes proprietary technology to power its websites, manage the supply chain for its perishable products, and conduct light manufacturing operations for its personalized products. Provide Commerce derives a large portion of its revenue from the sale of flowers and plants on its ProFlowers and ProPlants websites, and the remainder primarily from the sale of gourmet foods and gifts from its branded websites and mobile apps: Cherry Moon Farms, for fresh premium fruits; Shari's Berries, for gourmet-dipped berries and related gifting products; Personal Creations, for personalized and unique gifts; Gifts.com, for a wide variety of everyday gifting searchable through its proprietary gifting tools; Kalla, for unique high-end floral gifting and delivery experiences in select locales; and Sincerely, for mobile gifting apps. The principal executive offices of Provide Commerce are located at 4840 Eastgate Mall, San Diego, CA 92121. Provide Commerce's telephone number is (858) 729-2800.

Liberty Interactive Corporation

        LIC operates and owns interests in a broad range of digital commerce businesses. Those interests are currently attributed to two tracking stock groups: the Liberty Interactive Group and the Liberty Ventures Group. The Liberty Interactive Group is primarily focused on digital commerce and consists of Liberty Interactive Corporation's subsidiaries QVC, Provide Commerce, Backcountry.com, Bodybuilding.com, Evite, and CommerceHub and its interest in HSN. The businesses and assets attributed to the Liberty Venture Group consist of all of Liberty Interactive Corporation's businesses and assets other than those attributed to the Liberty Interactive Group and include its interest in Expedia, and minority interests in Time Warner and Time Warner Cable. LIC owns Provide Commerce indirectly through Liberty Interactive, LLC, a wholly owned subsidiary of LIC. The principal executive offices of LIC are located at 12300 Liberty Boulevard, Englewood, CO 80112. LIC's telephone number is (720) 875-5300.


Board Recommendation (See page 50)

        After discussion and deliberation based on the information considered during its evaluation of the proposed transaction with LIC, the FTD board of directors unanimously determined that the transaction is fair to and in the best interests of FTD and its stockholders, approved the stock purchase agreement and the investor rights agreement and directed that the stock issuance be submitted for consideration by FTD stockholders at the special meeting. Accordingly, the FTD board recommends that you vote FOR the proposal to approve the stock issuance and FOR the proposal to adjourn the special meeting, if necessary or appropriate, to solicit additional proxies. For more information

 

3


Table of Contents

regarding the factors considered by the FTD board in reaching its decision, see the section entitled "The Transaction—Reasons for the Transaction" beginning on page 50.


Reasons for the Transaction (See page 50)

        In developing its recommendation that FTD stockholders vote in favor of the stock issuance, the FTD board of directors considered many factors, including the benefits described in this proxy statement and the positive and negative factors described in the section of this proxy statement entitled "The Transaction—Reasons for the Transaction" beginning on page 50, unanimously determined that the transaction is fair to and in the best interests of FTD and its stockholders and approved the stock purchase agreement and the investor rights agreement. The FTD board believes that the transaction will be beneficial because it is expected to enhance FTD's consumer floral and gifting category, diversify revenue streams and broaden consumer demographics, enhance the consumer shopping experience and strengthen FTD's floral network. In addition, the transaction is expected to generate significant cost synergies that will increase stockholder value, including approximately $25 million in annual synergies that are expected within 36 months of the closing of the transaction, and strengthen FTD's financial position.


Opinion of FTD's Financial Advisor (See page 55)

        In connection with the transaction, the FTD board of directors received a written opinion, dated July 28, 2014, from FTD's financial advisor, Moelis & Company LLC ("Moelis"), as to the fairness, from a financial point of view and as of the date of such opinion, to FTD of the consideration to be paid by FTD in the transaction. The full text of Moelis' written opinion dated July 28, 2014, which sets forth the assumptions made, procedures followed, matters considered and limitations on the review undertaken in connection with the opinion, is attached as Annex C to this proxy statement and is incorporated herein by reference. Stockholders are urged to read Moelis' written opinion carefully and in its entirety. Moelis' opinion was provided for the use and benefit of the FTD board (in its capacity as such) in its evaluation of the transaction. Moelis' opinion is limited solely to the fairness, from a financial point of view and as of the date of such opinion, to FTD of the consideration to be paid by FTD in the transaction, and does not address FTD's underlying business decision to effect the transaction or the relative merits of the transaction as compared to any alternative business strategies or transactions that might be available with respect to FTD. Moelis' opinion does not constitute a recommendation to any FTD stockholder as to how such stockholder should vote or act with respect to the transaction or any other matter.


Interests of Certain Persons in the Transaction (See page 63)

        Except as described below, none of our directors or executive officers have any interests in the transaction that may be different from, or in addition to, the interests of FTD's stockholders generally. The FTD board of directors was aware of the interests described below and considered them, among other matters, in evaluating the transaction, approving the stock purchase agreement and the investor rights agreement and recommending that FTD stockholders vote in favor of the issuance of the FTD shares to LIC in accordance with the terms of the stock purchase agreement.

        In connection with FTD's entry into the stock purchase agreement, on July 28, 2014, FTD entered into amended and restated employment agreements (the "new employment agreements") with its current President and Chief Executive Officer, Robert S. Apatoff, Executive Vice President and Chief Financial Officer, Becky A. Sheehan, and Executive Vice President, General Counsel and Secretary, Scott D. Levin. Each new employment agreement amends and restates in its entirety each executive's employment agreement (the "prior employment agreements") entered into with FTD in connection with FTD's separation from United Online, Inc. on November 1, 2013.

 

4


Table of Contents

        The new employment agreements will be effective on the date of the closing of the transaction, with a term expiring on December 31, 2019. If the transaction is not completed, the new employment agreements will be deemed null and void, will terminate effective as of the termination of the stock purchase agreement and the prior employment agreements will continue in full force and effect.

        Pursuant to the new employment agreements, immediately upon their effectiveness, Mr. Apatoff's, Ms. Sheehan's and Mr. Levin's then-current annual base salaries will be increased by $100,000, $50,000 and $50,000, respectively. Upon the new employment agreements' effectiveness, Mr. Apatoff, Ms. Sheehan and Mr. Levin will be granted an award of restricted stock units with a value of $730,000, $438,000 and $306,000, respectively, which awards will vest at the rate of one-third on each of the first three anniversaries of the grant date. In addition, the new employment agreements provide that each of Mr. Apatoff, Ms. Sheehan and Mr. Levin will remain eligible to participate in each of FTD's employee benefit plans that are generally available to all employees or senior executives and to participate in an annual bonus program with a target bonus set by the FTD board of directors in an amount of up to 100% of the executive's annual base salary. Each new employment agreement also provides for certain payments in connection with the termination of an executive's employment, including in connection with a change of control. For purposes of the new employment agreements, "change of control" includes completion of the transaction.

        The new employment agreements and related award of restricted stock units are described in more detail under the section entitled "The Transaction—Interests of Certain Persons in the Transaction" beginning on page 63.


FTD Board of Directors Following the Transaction (See page 66)

        In connection with the closing of the transaction, the FTD board of directors will be increased from seven to eleven directors, with LIC selecting four new directors for appointment to the board. In addition, at the closing of the transaction, we will be required to appoint one of those directors to each of the Nominating and Corporate Governance Committee, Audit Committee and Compensation Committee of the FTD board. Such appointments will be subject in all respects to the terms and conditions contained in the investor rights agreement. Two such directors will be appointed to the 2016 class of the FTD board, with terms expiring at our 2016 annual meeting, and one such director will be appointed to each of the 2015 and 2017 classes, with terms expiring at our 2015 and 2017 annual meetings, respectively.


Impact of the Stock Issuance on Existing FTD Stockholders (See page 67)

        The stock issuance will dilute the ownership and voting interests of our existing stockholders. As of July 29, 2014, there were 18,948,447 shares of FTD common stock issued and outstanding. Assuming the approval of the stock issuance, consisting of 10,203,010 shares, and no other change to the number of shares of FTD common stock issued and outstanding as of July 29, 2014, LIC would own 35% of the post-closing issued and outstanding shares of FTD common stock. Therefore, the ownership and voting interests of our existing stockholders will be proportionately reduced.

        In addition, concurrent with the execution of the stock purchase agreement, the FTD board of directors resolved to waive Section 203 of the General Corporation Law of the State of Delaware (the "DGCL") with respect to LIC and its affiliates, thereby exempting LIC and its affiliates from the restrictions on business combinations set forth in Section 203. The continued effectiveness of this waiver is a condition to closing of the transaction, and FTD is prohibited from rescinding this waiver under the terms of the investor rights agreement. Further, under the terms of the investor rights agreement, FTD will be prohibited from implementing a stockholder rights plan, unless the plan exempts certain actions by LIC in accordance with the terms of the investor rights agreement.

 

5


Table of Contents


Material United States Federal Income Tax Consequences of the Transaction to FTD Stockholders (See page 67)

        Because existing FTD stockholders do not participate in the transaction, they will not recognize gain or loss in connection with the transaction with respect to their FTD common stock.


Accounting Treatment of the Transaction (See page 67)

        We prepare our financial statements in accordance with accounting principles generally accepted in the United States of America ("GAAP"). Under GAAP, the transaction will be accounted for by applying the acquisition method with FTD treated as the acquirer.


Appraisal Rights (See page 67)

        None of FTD's stockholders will be entitled to exercise appraisal rights or to demand payment for his, her or its shares of FTD common stock in connection with the transaction.


Regulatory Approvals and Clearances (See page 67)

        Under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR Act"), and the rules and regulations thereunder, the transaction may not be completed until required information and materials have been furnished to the Antitrust Division of the United States Department of Justice (the "DOJ") and the United States Federal Trade Commission (the "FTC") and certain waiting period requirements have expired or been terminated. On August 14, 2014, each of FTD, LIC and Provide Commerce filed a pre-merger notification and report form pursuant to the HSR Act with the DOJ and the FTC. On September 4, 2014, the DOJ and the FTC granted the parties' requests for early termination of the waiting period.


Federal Securities Law Consequences; Restrictions on Transfer (See page 67)

        If the stock issuance is approved, the FTD shares will be issued to a wholly owned subsidiary of LIC in a private placement transaction under Section 4(a)(2) of the Securities Act of 1933, as amended, and will be subject to certain restrictions on transfer.

        In addition, the FTD shares will be subject to further restrictions on transfer and LIC will be entitled to certain registration rights as described in more detail in "The Investor Rights Agreement—Other General Standstill Provisions" and "—Registration Rights" on pages 82 and 87, respectively.


Financing of the Transaction (See page 68)

        Concurrent with the execution of the stock purchase agreement, FTD entered into a financing commitment letter (as amended, amended and restated, supplemented or otherwise modified, the "commitment letter") with Bank of America, N.A. ("Bank of America"), Merrill Lynch, Pierce, Fenner & Smith Incorporated, Wells Fargo Bank, National Association, Wells Fargo Securities, LLC ("WF Securities"), and subsequently by joinder to the commitment letter, BMO Harris Bank, N.A., Bank of Montreal and Compass Bank. The commitment letter provided, on the terms and subject to the conditions set forth in the commitment letter, for a new term loan facility to be added to FTD's existing $350 million revolving credit facility under the credit agreement, dated as of July 17, 2013 (the "2013 credit agreement"), by and among FTD, Interflora British Unit ("Interflora"), the material wholly owned domestic subsidiaries of FTD party thereto as guarantors, the financial institutions party thereto from time to time, Bank of America Merrill Lynch and WF Securities, as joint lead arrangers and book managers, and Bank of America, as administrative agent for the lenders. The commitment letter further provided the conditions for a revolving loan advance (the "acquisition advance") under

 

6


Table of Contents

the 2013 credit agreement in connection with the closing of the transaction, which advance would be used to finance the cash portion of the purchase price.

        On September 19, 2014, FTD entered into an amendment to the 2013 credit agreement (the "credit agreement amendment"), among FTD, Interflora, the guarantors party thereto, the lenders party thereto (the "lenders"), and Bank of America, as administrative agent for the lenders (in such capacity, the "administrative agent"). The credit agreement amendment amended and restated the 2013 credit agreement in its entirety (as amended and restated, the "amended and restated credit agreement"). Among other things, the amended and restated credit agreement provides for a term loan in an aggregate principal amount of $200 million (the "term loan") and the conditions for the acquisition advance. The proceeds of the term loan were used to repay a portion of outstanding revolving loans under the amended and restated credit agreement in advance of the closing of the transaction to ensure sufficient revolving availability under the amended and restated credit agreement to make the acquisition advance. FTD expects the acquisition advance, together with cash balances, to be sufficient to provide the financing necessary to pay the cash portion of the purchase price under the stock purchase agreement. The commitments of the lenders to fund the acquisition advance are subject to certain limited conditions set forth in the amended and restated credit agreement.


The Stock Purchase Agreement (See page 70)

        The stock purchase agreement, which is attached to this proxy statement as Annex A, is described in more detail under the section entitled "The Stock Purchase Agreement" beginning on page 70. We urge you to read the stock purchase agreement in its entirety because the stock purchase agreement and not this proxy statement is the legal document governing the transaction.

    Closing Conditions

        The closing of the transaction is subject to various customary closing conditions, including, among others:

    approval by FTD's stockholders of the stock issuance;

    the absence of any law or order from any court or governmental authority preventing or prohibiting the transaction;

    expiration or termination of the waiting periods under applicable antitrust laws;

    the absence of any event or development that has had a material adverse effect on FTD or Provide Commerce; and

    the continued effectiveness of a waiver of Section 203 of the DGCL with respect to LIC.

    Representations and Warranties; Covenants

        The stock purchase agreement contains customary representations and warranties made by each of FTD, LIC and Provide Commerce.

        The parties have also agreed to various covenants in the stock purchase agreement, including, among others, covenants:

    to conduct their respective operations in the ordinary course of business consistent with past practice;

    to cooperate to prepare and file FTD's proxy statement in connection with obtaining the approval of FTD's stockholders of the stock issuance;

 

7


Table of Contents

    restricting, subject to certain limitations, FTD's ability to solicit or enter into certain alternative transactions; and

    to complete, and to cooperate in connection with, the financing transactions contemplated by the commitment letter, or to obtain alternative financing for the transaction.

        The parties have also agreed that prior to closing the transaction, LIC will separate, by means of a distribution, the RedEnvelope business from the Provide Commerce business that FTD will acquire in the transaction.

        In addition, pursuant to the terms of the stock purchase agreement and the investor rights agreement, FTD will increase the size of its board of directors from seven to eleven directors, with LIC selecting four new directors for appointment to the board as of the closing of the transaction.

    Termination; Termination Fees

        The stock purchase agreement contains certain termination rights for both FTD and LIC (for itself and on behalf of Provide Commerce) and further provides that FTD must pay to LIC certain termination fees upon termination of the stock purchase agreement under the following circumstances:

    a termination fee of $10.75 million if (1) either party terminates the stock purchase agreement because the transaction has not closed by January 31, 2015 or a later date under certain circumstances or because FTD's stockholders fail to approve the stock issuance, and (a) an alternative acquisition proposal for FTD was announced prior to the event giving rise to such termination right and (b) within twelve months of such termination FTD enters into a definitive agreement to consummate such alternative acquisition proposal, or (2) LIC terminates the stock purchase agreement because the FTD board of directors changes its recommendation to stockholders regarding the issuance of the FTD shares, fails to recommend against a third party tender offer for FTD, breaches its "no-shop" covenant, fails to take certain actions in connection with the solicitation of votes for approval of the stock issuance or fails to call and hold the special meeting of stockholders;

    a termination fee of $12.9 million if, subject to LIC's prior matching right, FTD terminates the stock purchase agreement in order to enter into a superior proposal for the acquisition of FTD; and

    a termination fee of $17.2 million if, subject to LIC's prior matching right, LIC terminates the stock purchase agreement because the FTD board of directors changes its recommendation to stockholders regarding the stock issuance due to the occurrence of certain not reasonably foreseeable intervening events materially and disproportionately favorable to FTD.

        Further, the stock purchase agreement provides that LIC must pay a termination fee of $6 million to FTD if FTD terminates the stock purchase agreement because of Provide Commerce's failure to deliver certain audited and unaudited financial statements of Provide Commerce.

    Indemnification

        Subject to certain exceptions and other provisions, LIC and FTD have agreed to indemnify each other for breaches of representations and warranties, breaches of covenants and certain other matters. The indemnification provided by each party to the other with respect to breaches of certain representations and warranties is subject to a cap on losses of $86 million and applies only to the extent such losses exceed $4.3 million in the aggregate, each of which cap and deductible amounts is subject to certain exceptions.

 

8


Table of Contents



The Investor Rights Agreement (See page 81)

        The agreed form of investor rights agreement, which is attached to this proxy statement as Annex B, is described in more detail under the section entitled "The Investor Rights Agreement" beginning on page 81. We urge you to read the investor rights agreement in its entirety because the investor right agreement and not this proxy statement is the legal document that will govern certain rights of and restrictions on LIC in connection with the shares of FTD common stock that LIC will own following the transaction.

    Ownership Cap; Permitted Tender Offer

        Under the terms of the investor rights agreement, LIC will be restricted from acquiring additional shares of FTD common stock if, (1) until December 31, 2016, following such acquisition, LIC would own in excess of 37.5% of the total number of the outstanding shares of FTD common stock and (2) after December 31, 2016, following such acquisition, LIC would own in excess of 40% of the total number of outstanding shares of FTD common stock, in each case, subject to certain exceptions.

        Notwithstanding these restrictions, LIC would be permitted, subject to certain conditions, to make a non-negotiated permitted tender offer to acquire additional shares of FTD common stock if, (a) after December 31, 2016, LIC has negotiated in good faith with the FTD board of directors for a period of at least thirty days and is unable to reach an agreement on a transaction or (b) at any time following 10 days after the date a third party makes an unsolicited tender offer for shares of FTD common stock and if, during such 10 day period, FTD fails to take customary defensive actions, provided, (i) in either case, that LIC's tender offer must be an offer for all outstanding shares of FTD common stock and (ii) LIC's tender offer cannot close until a majority of the outstanding shares of FTD common stock not owned by LIC have been tendered, provided that the requirement in this clause (ii) does not apply in the event of a third party offer as described in clause (b) above.

    Takeover Defense

        FTD may not amend, modify or rescind the resolution of the FTD board of directors that waives Section 203 of the DGCL as to LIC and its affiliates. FTD also may not implement a stockholder rights plan unless such plan by its terms exempts, or at the time of implementation FTD takes action to exempt, the acquisitions of FTD common stock by LIC pursuant to the terms of the investor rights agreement.

    Other General Standstill Provisions

        The investor rights agreement further provides that during the 18 month period following the closing of the transaction (the "restricted period"), LIC will be bound by customary standstill provisions, including covenants not to solicit competing proxies or call special meetings of FTD's stockholders, subject to the earlier expiration of the standstill provisions or certain waivers thereto upon the occurrence of certain events. In addition, during the restricted period, LIC may not transfer any shares of FTD common stock that it owns, subject to certain exceptions.

        After the expiration of the restricted period, LIC may sell shares of FTD common stock, subject to FTD's right of first refusal with respect to certain market sales, provided that in no event may LIC sell FTD common stock to any person if such person would beneficially own in excess of 15% of the total outstanding shares of FTD common stock, subject to certain exceptions. Beginning 36 months after closing of the transaction, LIC would be permitted to transfer its shares of FTD common stock in a block sale to a single party, subject to certain limitations with respect to the transferee and FTD's right of first offer.

 

9


Table of Contents

        The investor rights agreement also includes limitations on pledging, stock lending transactions and hedging by LIC of shares of FTD common stock.

    Registration Rights; Participation Rights

        Pursuant to the terms of the investor rights agreement, LIC is entitled to customary demand and piggyback registration rights and, subject to certain limitations, a participation right pursuant to which LIC may maintain its ownership percentage of FTD common stock.

        The investor rights agreement provides that, for so long as LIC owns at least 15% of the outstanding shares of FTD common stock, FTD is required to provide advance notice to LIC before entering into an agreement regarding a merger, consolidation, change of control or other business combination transaction. In addition, if FTD enters into an agreement with a third party that would result in a change of control of FTD, FTD may issue to such third party, outside of LIC's participation right described above, a number of shares of FTD common stock equal to 19.9% of the total number of shares then outstanding. However, such issuance will not dilute LIC's right to representation on the FTD board of directors.

    LIC Representation on the FTD Board of Directors

        As described above, LIC will be entitled to select four new directors for appointment to the FTD board of directors as of the closing of the transaction. Pursuant to the investor rights agreement, following the closing:

    LIC will be entitled to proportional representation on the FTD board based upon its ownership percentage, rounded up to the next whole number of directors;

    FTD will be required to use its reasonable best efforts to cause the election of each LIC nominee at subsequent FTD stockholders meetings;

    at least half of LIC's nominees must be independent under applicable listing standards, subject to LIC's rights to have at least two LIC officers serving as directors; and

    FTD must appoint one of LIC's nominees to each committee of the FTD board, subject to applicable listing standards and provided that no such director may serve as chairman of the board or chairman of a committee.

        In addition, for a period of five years (or six years, in the event the FTD board of directors ceases to be classified or FTD implements majority voting for directors), and so long as (1) a LIC-nominated director remains on the board and (2) LIC owns less than 50% of the outstanding shares of FTD common stock, LIC will be required to vote its shares of FTD common stock in favor of the FTD board's director slate at each stockholders meeting at which directors are to be elected. So long as LIC owns at least 5% of the outstanding shares of FTD common stock, LIC has agreed to attend, in person or by proxy, all meetings of FTD's stockholders so that such shares may be counted for purposes of determining a quorum at such meetings.


Summary Historical Financial Data

Summary Historical Consolidated Financial Data of FTD

        The following table presents summary historical consolidated financial data as of December 31, 2013 and 2012 and for the years ended December 31, 2013, 2012 and 2011, derived from our audited consolidated financial statements, which are included in our annual report on Form 10-K for the year ended December 31, 2013 and incorporated by reference into this proxy statement. The table also presents summary historical consolidated financial data as of December 31, 2011 and for the year ended December 31, 2010 derived from audited consolidated financial statements that are not included

 

10


Table of Contents

in or incorporated by reference into this proxy statement. Additionally, the table presents summary historical consolidated financial data as of June 30, 2014 and for the six months ended June 30, 2014 and 2013, derived from our unaudited condensed consolidated financial statements, which are included in our quarterly report on Form 10-Q for the quarterly period ended June 30, 2014 and incorporated by reference into this proxy statement. In the opinion of FTD's management, the unaudited interim information reflects all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of financial position and operating results for the periods presented. Results for interim periods should not be considered indicative of results for any other periods or for the year.

        The information presented below is only a summary. The historical results are not necessarily indicative of results that can be expected for any future period. The summary financial data set forth below should be read in conjunction with "Management's Discussion and Analysis of Financial Condition and Results of Operations" and the historical consolidated financial statements and notes thereto for 2013, 2012 and 2011, which are included in our annual report on Form 10-K for the year ended December 31, 2013, and "Management's Discussion and Analysis of Financial Condition and Results of Operations" and the historical condensed consolidated financial statements and notes thereto for the three and six months ended June 30, 2014, which are included in our quarterly report on Form 10-Q for the quarterly period ended June 30, 2014, and, in each case, are incorporated by reference in this proxy statement.

        Prior to November 1, 2013, FTD was a wholly owned subsidiary of United Online, Inc. ("United Online"). On November 1, 2013, United Online separated into two independent, publicly-traded companies: FTD Companies, Inc. and United Online, Inc. (the "separation"). The separation was consummated through a tax-free dividend involving the distribution of all shares of FTD common stock to United Online's stockholders. In connection with the separation, holders of United Online common stock received one share of FTD common stock for every five shares of United Online common stock held on the record date for the separation (prior to giving effect to a reverse stock split of United Online shares). Following completion of the separation, FTD became an independent, publicly-traded company on the NASDAQ Global Select Market utilizing the symbol "FTD".

        Our historical consolidated financial statements prior to November 1, 2013 include allocations of certain corporate costs from United Online, including costs related to senior management, legal, human resources, finance, information technology, and centrally-managed employee benefit arrangements. We believe the allocations of corporate costs from United Online are reasonable and do not believe FTD's costs would have been significantly different on a stand-alone basis prior to separation. However, these costs may not be representative of the future costs we will incur as a stand-alone public company, and do not include certain additional costs we may incur as a stand-alone public company.

        The historical financial information presented may not necessarily reflect our financial position and results of operations as if we had operated as a stand-alone public company during the periods prior to November 1, 2013. Accordingly, our historical results should not be relied upon as an indicator of our future performance.

 

11


Table of Contents

        The following amounts are in thousands, except per share data:

 
  Six Months Ended June 30,   Year Ended December 31,  
 
  2014   2013   2013(a)(b)   2012   2011   2010  

Statement of Operations Data:

                                     

Revenues

  $ 357,947   $ 354,562   $ 627,343   $ 613,514   $ 587,249   $ 554,576  

Operating income

  $ 26,624   $ 29,158   $ 33,666   $ 44,189   $ 41,217   $ 32,113  

Net income

  $ 14,329   $ 14,775   $ 12,502   $ 21,174   $ 15,721   $ 6,607  

Earnings per common share(c):

                                     

Basic

  $ 0.74   $ 0.79   $ 0.67   $ 1.14   $ 0.85   $ 0.36  

Diluted

  $ 0.74   $ 0.79   $ 0.67   $ 1.14   $ 0.85   $ 0.36  

 

 
   
  As of December 31,  
 
  As of
June 30, 2014
 
 
  2013   2012   2011  

Balance Sheet Data:

                         

Cash and cash equivalents

  $ 63,495   $ 48,162   $ 67,347   $ 47,058  

Total assets

  $ 662,951   $ 655,264   $ 684,629   $ 677,459  

Long-term debt, net of discounts

  $ 220,000   $ 220,000   $ 233,144   $ 258,474  

Common shares outstanding(c)

    18,948     18,829     18,584     18,584  

(a)
During the year ended December 31, 2013, FTD incurred transaction-related costs related to the separation that negatively impacted operating income by $13.4 million, net income by $12.3 million and earnings per common share by $0.66.

(b)
On July 17, 2013, FTD refinanced its debt and entered into the 2013 credit agreement. FTD repaid in full its then existing debt under its prior 2011 credit agreement, and in connection with such transaction FTD recorded a $2.3 million pre-tax loss ($1.4 million after tax) on extinguishment of debt during the year ended December 31, 2013, which was recorded in interest expense.

(c)
In connection with the separation, FTD's previously outstanding 10,000 shares of common stock were automatically reclassified and became 18,583,927 shares of common stock. The same number of shares was used to calculate basic and diluted earnings per share for the periods prior to the separation.

Summary Historical Consolidated and Combined Financial Data of Provide Commerce (See page 100)

        The following table presents summary historical consolidated financial data of Provide Commerce as of December 31, 2013 and 2012 and for the years ended December 31, 2013, 2012 and 2011, derived from Provide Commerce's audited consolidated and combined financial statements, which are included in this proxy statement. Additionally, the table presents summary historical consolidated financial data as of June 30, 2014 and for the six months ended June 30, 2014 and 2013, derived from Provide Commerce's unaudited condensed consolidated and combined interim financial statements, which are included in this proxy statement. In the opinion of Provide Commerce's management, the unaudited interim information reflects all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of financial position and operating results for the periods presented. Results for interim periods should not be considered indicative of results for any other periods or for the year.

        The information presented below is only a summary. The historical results presented below are not necessarily indicative of results that can be expected for any future period. The summary financial data set forth below should be read in conjunction with "Provide Commerce's Management's Discussion and Analysis of Financial Condition and Results of Operations" beginning on page 101 and Provide

 

12


Table of Contents

Commerce's historical consolidated and combined financial statements and notes thereto included with this proxy statement.

        The following amounts are in thousands:

 
  Six Months Ended
June 30,
  Year Ended December 31,  
 
  2014   2013   2013   2012   2011  

Statement of Operations Data:

                               

Net sales

  $ 418,840   $ 401,719   $ 606,057   $ 563,944   $ 522,103  

Operating income (loss)(a)

  $ 10,732   $ 32,363   $ (19,985 ) $ 21,061   $ 25,841  

Net income (loss)(a)

  $ 4,964   $ 19,940   $ (18,281 ) $ 13,008   $ 16,599  

(a)
During the year ended December 31, 2013, Provide Commerce recorded impairments of goodwill and intangible assets of the Gifts.com reporting unit which negatively impacted operating income by $35.0 million and net income by $27.3 million.

 
   
  As of December 31,  
 
  As of
June 30, 2014
 
 
  2013   2012  

Balance Sheet Data:

                   

Cash and cash equivalents

  $ 46,789   $ 44,952   $ 52,495  

Total assets

  $ 514,993   $ 523,117   $ 563,702  

Long-term debt

             


Summary Unaudited Pro Forma Combined Financial Data (See page 112)

        The following table reflects the pro forma effect of the acquisition of Provide Commerce by FTD, and the issuance of $130.0 million of additional debt on the balance sheet of FTD as of June 30, 2014 and the statement of operations of FTD for the six months ended June 30, 2014 and the year ended December 31, 2013. The summary unaudited pro forma combined financial data is prepared as if the acquisition of Provide Commerce had been consummated as of June 30, 2014, for purposes of the unaudited pro forma combined balance sheet, and on January 1, 2013, for purposes of the unaudited pro forma combined statements of operations.

        This information is only a summary. We are providing the summary unaudited pro forma combined financial data for informational purposes only. It does not necessarily represent or indicate what the financial position and results of operations of FTD would actually have been had the acquisition and other pro forma adjustments in fact occurred at the dates indicated. It also does not necessarily represent or indicate the future financial position or results of operations FTD will achieve after the acquisition of Provide Commerce.

        You should read the summary unaudited pro forma combined financial data together with the other information and the accompanying notes that are included or incorporated by reference elsewhere in this document.

 

13


Table of Contents

        The following amounts are in thousands:

 
  Six Months
Ended
June 30,
2014
  Year Ended
December 31,
2013
 

Unaudited Pro Forma Combined Statements of Operations Data:

             

Revenues

  $ 776,787   $ 1,233,400  

Operating income (loss)(a)

    30,375     (5,651 )

Net income (loss)(a)

    13,957     (19,727 )

(a)
During the year ended December 31, 2013, Provide Commerce recorded impairments of goodwill and intangible assets of the Gifts.com reporting unit which negatively impacted operating income by $35.0 million and net income by $27.3 million.

 
   
 

Unaudited Pro Forma Combined Balance Sheet Data as of June 30, 2014:

       

Cash and cash equivalents

  $ 55,053  

Total assets

    1,311,455  

Long-term debt

    350,000  

 

14


Table of Contents


QUESTIONS AND ANSWERS

        The following questions and answers are intended to address briefly some commonly asked questions regarding the transaction and the stock issuance. These questions and answers, as well as the summary beginning on page 1, are not meant to be a substitute for the information contained in the remainder of this proxy statement, and this information is qualified in its entirety by the more detailed descriptions and explanations contained elsewhere in this proxy statement. Stockholders are urged to carefully read this entire proxy statement, including the attached annexes. You should pay special attention to "Special Note Concerning Forward-Looking Statements" beginning on page 24 and "Risk Factors" beginning on page 26.

Q:
Why am I receiving this document?

A:
We are using this document to solicit proxies of our stockholders for the approval of the stock issuance in connection with the acquisition by our wholly owned subsidiary, FTD, Inc., of all the issued and outstanding shares of Provide Commerce's common stock, pursuant to the stock purchase agreement. Following the completion of the transaction, Provide Commerce will be an indirect wholly owned subsidiary of FTD.
Q:
When is the special meeting of FTD stockholders and where will it be held?

A:
The special meeting will be held on [    •    ], 2014 at [    •    ] Central Time, at our corporate offices located at 3113 Woodcreek Drive, Downers Grove, IL 60515.
Q:
Who is eligible to vote at the special meeting?

A:
If you are an FTD stockholder of record as of the close of business on [    •    ], 2014, the record date for the special meeting, you are entitled to receive notice of, and to vote at, the special meeting.
Q:
What matters are FTD stockholders being asked to approve at the special meeting?

A:
You are being asked to vote on the following matters:

1.
to approve the stock issuance; and

2.
to adjourn the special meeting, if necessary or appropriate, for the solicitation of additional proxies in the event that there are not sufficient votes at the time of the special meeting to constitute a quorum or to approve the stock issuance.

15


Table of Contents

Q:
Why is stockholder approval required for the stock issuance?

A:
We are seeking stockholder approval of the stock issuance to satisfy NASDAQ Listing Rule 5635(a), which requires stockholder approval prior to the issuance of securities in connection with the acquisition of stock or assets of another company if the issuance would constitute more than 20% of the total number of shares of FTD common stock outstanding before the issuance. If the transaction is completed, we will issue the FTD shares to a wholly owned subsidiary of LIC, which represent the number of shares of FTD common stock that would equal 35% of the post-closing issued and outstanding shares of FTD common stock (based on the number of shares issued and outstanding on July 29, 2014).

Q:
What will happen if FTD's stockholders vote to approve the stock issuance?

A:
If the stock issuance is approved, all required authorizations, clearances, consents and governmental approvals are obtained and, subject to the satisfaction or waiver of the other closing conditions, we expect the transaction to be completed near the end of 2014.

Q:
What will happen if FTD's stockholders do not vote to approve the stock issuance?

A:
If the stock issuance is not approved, we will not be able to complete the transaction. The stock purchase agreement would be terminated, and, if certain conditions are met in addition to FTD's stockholders failure to approve the stock issuance, a termination fee may be payable by FTD to LIC. We provide additional information relating to termination rights under the stock purchase agreement in the section below entitled "The Stock Purchase Agreement" beginning on page 70.

Q:
Why is FTD proposing to engage in the transaction and the stock issuance?

A:
We believe that the transaction would further FTD's vision to become the leading and most trusted floral and gifting company in the world. We believe that the transaction would unite two complementary businesses to offer customers a greater variety of floral and gifting products and an enhanced shopping experience, and that the transaction would result in the following anticipated benefits, among others:

enhanced FTD consumer floral and gifting category by combining FTD's iconic brands, FTD and Interflora, and Mercury Man logo with Provide Commerce's respected and highly recognizable e-commerce brands, including ProFlowers, Shari's Berries and Personal Creations;

diversified revenue streams and broadened consumer demographics through the combination of FTD's and Provide Commerce's complementary businesses and customer bases, with opportunities for cross-selling brands;

enhanced consumer shopping experience by allowing FTD to offer a wider selection of floral and gifting products, thereby providing consumers with greater convenience and choice;

strengthened floral network by enabling FTD to invest in new products, services and technology to support member florists in their local businesses;

generation of significant cost synergies to increase stockholder value, including approximately $25 million in annual synergies expected within 36 months of the closing of the transaction, through changes in procurement and fulfillment including leveraging Provide Commerce's supply chain network to support FTD's florist network members, and efficiencies in overhead, customer service, and marketing; and

strengthened financial position, including that the transaction will create a combined company with annual revenue in excess of $1 billion and will increase FTD's market capitalization and

16


Table of Contents

Q:
Why does the FTD board of directors recommend that I vote FOR the stock issuance?

A:
In developing its recommendation that FTD stockholders vote in favor of the stock issuance, the FTD board of directors considered many factors, including the benefits described in this proxy statement and the positive and negative factors described in the section entitled "The Transaction—Reasons for the Transaction" beginning on page 50, unanimously determined that the transaction is fair to and in the best interests of FTD and its stockholders and approved the stock purchase agreement and the investor rights agreement. The FTD board believes that the transaction will provide the strategic and financial benefits described in the immediately preceding question. Accordingly, the FTD board recommends that you vote FOR the proposal to approve the stock issuance.

Q:
Are there risks associated with the transaction?

A:
Yes. The material risks associated with the transaction that are known to us are discussed in the section entitled "Risk Factors" beginning on page 26.

Q:
What will LIC receive as consideration in the transaction?

A:
Upon the closing of the transaction, FTD (through a wholly owned subsidiary) will acquire from a wholly owned subsidiary of LIC all of the issued and outstanding shares of Provide Commerce's common stock for an aggregate purchase price of approximately $430 million. The purchase price consists of (i) cash consideration of $121 million and (ii) the FTD shares, totaling 10,203,010 shares of FTD common stock. The FTD shares represent the number of shares of FTD common stock that would equal 35% of the post-closing issued and outstanding shares of FTD common stock (based on the number of shares issued and outstanding on July 29, 2014), valued for purposes of the transaction at the volume weighted average closing price of FTD common stock for the ten trading days ended July 28, 2014.

Q:
What will happen to my FTD common stock upon completion of the transaction?

A:
Each outstanding share of FTD common stock will be unaffected by the transaction and will remain outstanding. Holders of FTD common stock will continue to hold the shares that they currently hold.

Q:
Will the stock issuance dilute the existing stockholders' percentage of ownership in FTD?

A:
Yes. The stock issuance will dilute your existing holdings of FTD common stock. As of July 29, 2014, there were 18,948,447 shares of FTD common stock issued and outstanding. Assuming the approval of the stock issuance, consisting of 10,203,010 shares, and no other change to the number of shares of FTD common stock issued and outstanding as of July 29, 2014, LIC would own 35% of the post-closing issued and outstanding shares of FTD common stock. Therefore, your ownership and voting interest in FTD will be proportionately reduced.

17


Table of Contents

Q:
Do I, as a stockholder of FTD, have dissenters' or appraisal rights if I object to the stock issuance?

A:
No. Our existing stockholders do not have rights of appraisal or similar rights of dissenters with respect to the stock issuance.

Q:
How does the FTD board of directors recommend I vote for the proposal to adjourn the special meeting?

A:
The FTD board of directors recommends a vote FOR the proposal to adjourn the special meeting, if necessary or appropriate, to solicit additional proxies in the event that there are not sufficient votes at the time of the special meeting to constitute a quorum or approve the stock issuance.

Q:
What other matters may arise at FTD's special meeting?

A:
Other than the two proposals described in this proxy statement, we do not expect any other matters to be presented for a vote at the special meeting. If any other matter is properly brought before the special meeting, your proxy gives authority to the individuals named in the proxy to vote on such matters in their discretion.

Q:
Other than the stock purchase agreement, what other agreements have been or will be entered into in connection with the proposed transaction?

A:
Concurrent with the closing of the transaction, LIC and FTD will enter into the investor rights agreement, the agreed form of which is attached hereto as Annex B. The investor rights agreement provides for certain restrictions on LIC's ability to acquire additional shares of FTD common stock in excess of a cap and includes customary standstill provisions applicable to LIC during the 18 month restricted period following closing of the transaction, subject to more limited restrictions following the restricted period. The investor rights agreement also includes limitations on transfers, pledging, stock lending transactions and hedging by LIC of shares of FTD common stock. Pursuant to the terms of the investor rights agreement, LIC is entitled to customary demand and piggyback registration rights and, subject to certain limitations, a participation right pursuant to which LIC may maintain its ownership percentage of FTD common stock. For so long as LIC owns at least 15% of the outstanding shares of FTD common stock, FTD is required to provide advance notice to LIC before entering into an agreement regarding a merger, consolidation, change of control or other business combination transaction. The investor rights agreement also includes certain director appointment and nomination rights in favor of LIC and obligates LIC, subject to certain limitations, to vote its shares of FTD common stock in favor of the FTD board's director slate at each stockholders meeting at which directors are to be elected. The agreement is described more fully below in the section entitled "Investor Rights Agreement" beginning on page 81.

18


Table of Contents

Q:
Are there restrictions on the resale of the FTD shares issued to LIC in connection with the transaction?

A:
Yes. The FTD shares issued in connection with the transaction will be considered "restricted securities" under Rule 144 of the Securities Act of 1933, as amended (the "Securities Act").
Q:
Will FTD's senior management team change following the completion of the transaction?

A:
No. Upon the closing of the transaction, FTD's senior management team will remain in place with Robert S. Apatoff continuing as President and Chief Executive Officer.

Q:
Will the FTD board of directors change following the completion of the transaction?

A:
Yes. Though Robert Berglass will continue as Chairman of the FTD board of directors, the stock purchase agreement provides that, immediately after the closing of the transaction, we will increase the size of the FTD board from seven to eleven members and will appoint four individuals selected for appointment by LIC to fill the vacancies. The investor rights agreement contains additional provisions regarding LIC's rights to designate individuals for election to the FTD board as described more fully in the section below entitled "The Investor Rights Agreement—LIC Representation on the FTD Board of Directors" beginning on page 88.
Q:
What expenses is FTD incurring in connection with the transaction?

A:
We anticipate that FTD will incur total transaction costs of approximately $13 to $15 million. As of June 30, 2014, FTD had incurred transaction costs of $1.7 million. We also expect to incur integration costs associated with combining the companies and the achievement of synergies, which may be material. We are in the process of assessing such costs.

Q:
What are the material U.S. federal income tax consequences of the transaction?

A:
Because existing FTD stockholders do not participate in the transaction, they will not recognize gain or loss in connection with the transaction with respect to their FTD common stock.

Q:
What is the difference between holding shares as a stockholder of record and as a beneficial owner?

A:
Stockholder of Record

19


Table of Contents

Q:
How do FTD's stockholders of record vote?

A:
Stockholders of record may vote in person at the special meeting or by proxy. There are three ways stockholders of record can vote by proxy: (1) by telephone; (2) by Internet; or (3) by completing and returning the proxy card enclosed with these proxy materials prior to the special meeting or submitting a signed proxy card at the special meeting.
Q:
How do beneficial owners of shares of FTD common stock vote?

A:
If your shares of FTD common stock are held in "street name," the organization holding your account will send you a request for directions for voting those shares. The organization holding your account will provide you with a voting instruction form with instructions on how to vote your shares. Many (but not all) participate in a program that offers telephone or Internet voting options.
Q:
How do the stockholders of FTD revoke their vote?

20


Table of Contents

Q:
What quorum requirement applies?

A:
On the record date, [    •    ], 2014, [    •    ] shares of FTD common stock were issued and outstanding. The presence at the special meeting, in person or by proxy, of the holders of a majority of the shares of FTD common stock issued and outstanding on the record date will constitute a quorum. Your shares of FTD common stock will be counted for purposes of determining a quorum if you attend the special meeting and vote in person or if you vote by telephone, by Internet or by submitting a properly executed proxy card by mail. Abstentions are counted as present for purposes of determining whether there is a quorum for the transaction of business, but broker non-votes are not.

Q:
What vote is required to approve the proposals?

A:
The affirmative vote of the holders of a majority of the shares of FTD common stock represented in person or by proxy and entitled to vote on the matter is required for the approval of the stock issuance, provided that a quorum is present in person or by proxy at the special meeting. A properly executed proxy marked "Abstain" with respect to such matter will be counted for purposes of determining whether there is a quorum and will have the effect of a vote AGAINST the stock issuance. Broker non-votes will not be counted for purposes of determining whether there is a quorum, but, assuming a quorum is present, will have no effect on the stock issuance.
Q:
What is a "broker non-vote"?

A:
Brokers holding shares of FTD common stock for beneficial owners have the authority to vote on certain "routine" matters, in their discretion, in the event they have not received instructions from the beneficial owners. However, when a proposal is not a "routine" matter and a broker has not received voting instructions from the beneficial owner of the shares with respect to that proposal, the broker may not vote the shares for that proposal. A "broker non-vote" occurs when a broker holding shares for a beneficial owner signs and returns a proxy with respect to those shares of stock held in a fiduciary capacity, but does not vote on a particular matter because the broker does

21


Table of Contents

Q:
Who will solicit and pay the cost of soliciting proxies from FTD's stockholders?

A:
This solicitation is made on behalf of the FTD board of directors, and we will pay the costs of solicitation. Copies of solicitation materials will be furnished to banks, brokerage firms and other custodians, nominees and fiduciaries holding shares in their names that are beneficially owned by others so that they may forward the solicitation material to such beneficial owners upon request. We will reimburse banks, brokerage firms and other custodians, nominees and fiduciaries for reasonable expenses incurred by them in sending proxy materials to our stockholders. In addition to the solicitation of proxies by mail, our directors, officers and employees may solicit proxies by telephone, facsimile or personal interview. No additional compensation will be paid to these individuals for any such services. We have engaged D.F. King & Co., Inc. to assist in the solicitation of proxies for the special meeting and will pay D.F. King & Co., Inc. a fee of approximately $12,500, plus reimbursement of out-of-pocket expenses.

Q:
Where can I obtain copies of these proxy materials?

A:
You can obtain copies of these proxy materials, free of charge, from FTD at its website, www.ftdcompanies.com, or by requesting copies in writing or by e-mail at: FTD Companies, Inc., c/o Investor Relations, 3113 Woodcreek Drive, Downers Grove, IL 60515, ir@ftdi.com. You may also request additional copies from our proxy solicitor, D.F. King & Co., Inc., at: D.F. King & Co., Inc., 48 Wall Street, New York, NY 10005.
Q:
When is this proxy statement being mailed?

A:
This proxy statement is being mailed to stockholders of record on or about [    •    ], 2014.

Q:
What do I need to do now?

A:
Please read this proxy statement carefully and vote either in person by attending the special meeting or by proxy. To vote by proxy, you may vote your shares via a toll-free telephone number, over the Internet, or by marking, signing and dating your proxy card and returning it to us in the envelope provided. If you vote by proxy, the proxy will instruct the persons named in the proxy to vote your shares of our common stock at the special meeting as you direct. If you submit a proxy that does not indicate how you wish to vote, the proxy will be voted FOR the proposal to approve the stock issuance and FOR the proposal to adjourn the special meeting, if necessary, or appropriate, to solicit additional proxies. We encourage you to vote your shares of FTD common stock as soon as possible so that your shares may be represented at the special meeting.

22


Table of Contents

Q:
Who can help answer my questions?

A:
If you have any questions about the matters described in this proxy statement, or if you need additional copies of this proxy statement or the enclosed proxy card, you should contact D.F. King & Co., Inc., our proxy solicitor, by telephone at (800) 714-3313 (toll-free) or via email at FTD@dfking.com.

Q:
Where can I find more information about FTD?

A:
You can find more information about us from the documents that we have filed with the SEC described in the section entitled "Where You Can Find More Information" beginning on page 123.

23


Table of Contents


SPECIAL NOTE CONCERNING FORWARD-LOOKING STATEMENTS

        This proxy statement contains certain forward-looking statements within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995, as amended, based on our current expectations, estimates and projections about our operations, industry, financial condition, performance, results of operations, and liquidity. Statements containing words such as "may," "believe," "anticipate," "expect," "intend," "plan," "project," "projections," "business outlook," "estimate," or similar expressions constitute forward-looking statements. These forward-looking statements include, but are not limited to, statements regarding potential acquisitions, including the planned acquisition of Provide Commerce; statements regarding expected synergies and benefits of the planned acquisition of Provide Commerce; expectations about future business plans, prospective performance and opportunities; statements regarding regulatory approvals; statements regarding the expected timing of the completion of the planned acquisition of Provide Commerce; and statements about our strategies. Potential factors that could affect these forward-looking statements include, among others:

        Additional factors that could affect these forward-looking statements are discussed in the section below entitled "Risk Factors," beginning on page 26, and in FTD's filings with the Securities and Exchange Commission, including without limitation, information under the captions "Management's Discussion and Analysis of Financial Condition and Results of Operations" and "Risk Factors." See the section entitled "Where You Can Find More Information" beginning on page 123 for more information about the documents incorporated by reference into this proxy statement.

24


Table of Contents

        Readers are cautioned not to place undue reliance on these forward-looking statements, which reflect management's analysis only as of the date hereof. Any such forward-looking statements are not guarantees of future performance or results and involve risks and uncertainties that may cause actual performance and results to differ materially from those predicted. Except as required by law, we undertake no obligation to publicly release the results of any revision or update to these forward-looking statements that may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.

25


Table of Contents


RISK FACTORS

        In addition to the other information included in or incorporated by reference into this proxy statement, you should carefully consider the material risks described below in deciding whether to vote for approval of the proposals presented at the special meeting. Additional risks and uncertainties not presently known to us or that are not currently believed to be material, if they occur, also may adversely affect FTD following the transaction. For additional risks related to FTD, please see FTD's Annual Report on Form 10-K filed with the SEC on March 10, 2014, and FTD's Quarterly Report on Form 10-Q filed with the SEC on August 13, 2014, which are incorporated by reference herein. If any of the following events occur, our business, financial condition, results of operations, and cash flows could be materially adversely affected, and the trading price of our common stock could materially decline.

Failure to complete the transaction could negatively impact our business, financial condition, results of operations or stock prices.

        Completion of the transaction is conditioned upon the satisfaction of certain closing conditions, including the approval of the stock issuance. The required conditions to closing may not be satisfied in a timely manner, if at all, or, if permissible, waived. If the transaction is not completed for these or any other reasons, our ongoing business may be adversely affected and will be subject to a number of risks and consequences, including the following:

26


Table of Contents

        In addition, any delay in the completion of the transaction, or any uncertainty about the completion of the transaction, could have a material adverse effect on our business, financial condition, results of operations, and cash flows.

We may be unable to obtain the financing necessary to complete the transaction.

        The obligations of the lenders to provide the acquisition advance under the amended and restated credit agreement are subject to a number of conditions, which may not be achieved. These conditions include (1) the contemporaneous closing of the transaction on the terms and conditions set forth in the stock purchase agreement, (2) the absence of a material adverse effect with respect to Provide Commerce and its domestic subsidiaries since the date of the stock purchase agreement, (3) the joinder of Provide Commerce and its domestic subsidiaries as guarantors under the amended and restated credit agreement, and (4) the administrative agent having a perfected lien and security interest on the assets of Provide Commerce and its domestic subsidiaries as described in the amended and restated credit agreement. If any of the conditions are not satisfied and we fail to receive the acquisition advance, we may be unable to complete the transaction.

We will incur substantial additional indebtedness in connection with the transaction.

        Pursuant to the terms of the commitment letter, we entered into the credit agreement amendment with the lenders and borrowed the term loan. The amended and restated credit agreement further provides for the acquisition advance, which advance shall be used to finance the cash portion of the purchase price. The proceeds of the term loan were used to repay a portion of outstanding revolving loans under the amended and restated credit agreement in advance of the closing of the transaction to ensure sufficient revolving availability under the amended and restated credit agreement to make the acquisition advance. As a result, following the transaction we will have indebtedness that is substantially greater than our indebtedness prior to the transaction. This higher level of indebtedness may:

        We cannot assure you that cash flows, combined with additional borrowings under the amended and restated credit facility and any future credit facility, will be available in an amount sufficient to enable us to repay our indebtedness, or to fund other liquidity needs.

        In addition, we may incur substantial additional indebtedness in the future, which could cause the related risks to intensify. We may need to refinance all or a portion of our indebtedness on or before their respective maturities. We cannot assure you that we will be able to refinance any of our indebtedness on commercially reasonable terms or at all. If we are unable to refinance our debt, we

27


Table of Contents

may default under the terms of our indebtedness, which could lead to an acceleration of the debt. We do not expect that we could repay all of our outstanding indebtedness if the repayment of such indebtedness was accelerated.

The acquisition of Provide Commerce will increase our participation in the U.S. consumer market. Competition could have a material adverse effect on our business, financial condition, results of operations, and cash flows.

        The acquisition of Provide Commerce will increase our participation in the U.S. consumer market. The U.S. consumer market for flowers and gifts is highly competitive and fragmented as consumers can purchase the products we offer from numerous sources, including traditional local retail florists, supermarkets, mass merchants, gift retailers, and floral and gift mass marketers. We believe the primary competitive factors in the U.S. consumer market are price, quality of products, selection, fulfillment capabilities, customer service, ordering convenience, and strength of brand. Our key competitors in the consumer market include online, catalog and floral and gift retailers and mass market retailers with floral departments.

        We face intense competition in the consumer market. We expect that the sales volumes at supermarkets and mass merchants will continue to increase, and that other online floral mass marketers will continue to increase their competition with us. In particular, the nature of the internet as a marketplace facilitates competitive entry and comparative shopping, and we continue to experience increased competition as a result. Some of our competitors may have significant competitive advantages over us, may engage in more significant discounting, may devote significantly greater resources to marketing campaigns or other aspects of their business or may respond more quickly and effectively than we can to new or changing opportunities or customer requirements.

        Increased competition in the consumer market may result in lower revenues, reduced gross margins, loss of market share, and increased marketing expenditures. We cannot provide assurance that we will be able to compete successfully or that competitive pressures will not have a material adverse effect on our business, financial condition, results of operations, and cash flows.

The transaction may result in a loss of customers and strategic alliances.

        As a result of the transaction, some of the customers, potential customers or strategic partners of FTD or Provide Commerce may terminate their business relationship with FTD following the transaction. In addition, strategic partners may delay entering into, or decide not to enter into, a business relationship with us because of the transaction. If customers or strategic alliances are adversely affected by the transaction, our business and financial performance following the transaction would suffer.

Certain of our floral network members may choose not to do business with us as a result of the acquisition of Provide Commerce. The loss of floral network members could materially and adversely affect our business, financial condition, results of operations, or cash flows.

        A significant portion of our profitability is dependent on our floral network members. The amount of revenues and profits we generate from individual floral network members can vary significantly. We have lost, and may continue to lose, floral network members as a result of declines in the number of local retail florists as a result of economic factors and competition, as well as our members choosing not to do business with us. Certain of our floral network members may choose not to do business with us as a result of the acquisition of Provide Commerce. There can be no assurance that the decline in the number of floral network members will not increase in the future, including as a result of our acquisition of Provide Commerce, or that we will not lose floral network members that generate

28


Table of Contents

significant revenues for our business, either of which could materially and adversely affect our business, financial condition, results of operations, or cash flows.

Our revenues and operating results fluctuate on a seasonal basis and may suffer if revenues during peak seasons do not meet our expectations. Provide Commerce's business experiences a greater level of seasonality than the FTD business, which could materially and adversely affect our business, financial condition, results of operations, or cash flows.

        Our business is seasonal, and our quarterly revenues and operating results typically exhibit seasonality. For example, revenues and operating results tend to be lower for the quarter ending September 30 because none of the most popular floral and gift holidays, which include Valentine's Day, Easter, Mother's Day, Thanksgiving, and Christmas, fall within that quarter. In addition, depending on the year, Easter and the U.K. Mother's Day sometimes fall within the quarter ending March 31 and sometimes fall within the quarter ending June 30.

        Provide Commerce's business experiences a greater level of seasonality than the FTD business. In 2013, Provide Commerce earned approximately 65% of its revenue in the first half of the year.

        Our operating results may suffer if revenues during our peak seasons do not meet expectations, as we may not generate sufficient revenues to offset increased costs incurred in preparation for peak seasons. Our working capital and cash flows also fluctuate during the year as a result of the factors set forth above. Any heightened seasonality of our business as a result of our acquisition of Provide Commerce could materially and adversely affect our business, financial condition, results of operations, or cash flows.

Uncertainties associated with the transaction may cause a loss of management personnel and other key employees which could adversely affect our future business and operations following the transaction.

        We and Provide Commerce are dependent on the experience and industry knowledge of our respective officers and other key employees to execute our business plans. The success of the combined company after the transaction will depend in part upon our ability to retain key management personnel and other key employees. Our and Provide Commerce's current and prospective employees may experience uncertainty about their roles within FTD or other concerns regarding our operations following the transaction, any of which may have an adverse effect on our ability to attract or retain key management and other key personnel. Accordingly, no assurance can be given that we will be able to attract or retain key management personnel and other key employees until the transaction is completed or following the transaction to the same extent that we have previously been able to attract or retain such employees.

Certain of FTD's directors and executive officers may have potential conflicts of interest in connection with the transaction.

        The interests of certain of FTD's directors and executive officers in the transaction may be different from, or in addition to, the interests of FTD's stockholders generally. Certain of FTD's executive officers have entered into new employment agreements in connection with the transaction and will receive increased salaries and restricted stock unit awards following closing of the transaction. The new employment agreements and related matters are discussed in more detail under the section entitled "The Transaction—Interests of Certain Persons in the Transaction" beginning on page 63. FTD stockholders should consider whether these interests may have influenced those directors and executive officers with respect to the transaction.

29


Table of Contents

The transaction is subject to a number of conditions, including the absence of certain legal or regulatory actions and the expiration or termination of any waiting or notice period under applicable antitrust laws. Any imposition of conditions to completion of the transaction by a legal or regulatory authority could impair our ability to complete the transaction on a timely basis, result in abandonment of the transaction or otherwise have a material adverse effect on us.

        Completion of the transaction is conditioned upon, among other matters, the absence of certain legal or regulatory actions and the receipt of certain governmental authorizations, consents, orders, clearances or other approvals. Notwithstanding termination of the waiting period under the HSR Act, at any time before the closing of the transaction, the DOJ, the FTC or others could take action under the antitrust laws with respect to the transaction, including seeking to enjoin the completion of the transaction or to require the divestiture of certain assets of FTD or Provide Commerce. There can be no assurance that a challenge to the transaction on antitrust grounds will not be made or, if such a challenge is made, that it would not be successful. Any imposition of conditions to completion of the transaction by a legal or regulatory authority could impair our ability to complete the transaction on a timely basis, result in abandonment of the transaction or otherwise have a material adverse effect on us. In addition, if we were to proceed with the transaction despite the imposition of regulatory conditions or restrictions, our business, financial condition, results of operations, cash flows and the price of our common stock following completion of the transaction could be adversely affected.

Any delay in completing the transaction may reduce or eliminate the benefits expected to be achieved thereunder.

        In addition to the required regulatory approvals and clearances, the transaction is subject to a number of other conditions beyond our control that may prevent, delay or otherwise materially adversely affect its completion. We cannot predict whether and when these other conditions will be satisfied.

        Furthermore, the requirements for obtaining the required clearances and approvals could delay the completion of the transaction for a significant period of time or prevent it from occurring. Any delay in completing the transaction could cause us not to realize some or all of the synergies and other benefits that we expect to achieve if the transaction is successfully completed within its expected time frame.

The anticipated benefits of the transaction may not be realized.

        To be successful after the transaction, we will need to combine and integrate the operations of FTD and Provide Commerce into one company. Integration will require substantial management attention and could detract attention from the day-to-day business of the combined company. We could encounter difficulties in the integration process, such as difficulties offering products and services across our expanded brand portfolio, the need to revisit assumptions about reserves, revenues, capital expenditures and operating costs, including synergies, the loss of key employees or customers or the need to address unanticipated liabilities. In addition, we cannot be assured that all of the goals and anticipated benefits of the transaction will be achievable, particularly as the achievement of the benefits are in many important respects subject to factors that we do not control. These factors would include such things as the reactions of our floral network members and third parties with whom we enter into contracts and do business and the reactions of investors and analysts.

        If we cannot integrate our business and Provide Commerce's business successfully, we may fail to realize the expected benefits of the transaction, including the annual cost synergies of approximately $25 million expected within 36 months following the closing of the transaction. Similarly, we currently anticipate that the transaction will be accretive to cash earnings per share in the first full year following the completion of the transaction, excluding costs to achieve synergies and other one-time costs related to the transaction. This expectation is based on preliminary estimates that are subject to change. We could also encounter additional transaction and integration costs, may fail to realize all of the benefits anticipated in the transaction or be subject to other factors that affect preliminary estimates. Any of

30


Table of Contents

these factors could cause a decrease in our cash earnings per share or decrease or delay the expected accretive effect of the transaction and contribute to a decrease in the price of FTD common stock.

We expect to incur substantial expenses related to the transaction and our integration with Provide Commerce.

        We expect to incur approximately $13 to $15 million in total transaction costs. We also expect to incur integration costs associated with combining the companies and the achievement of synergies, which may be material. We are in the process of assessing such costs. There are many factors beyond our control that could affect the total amount or the timing of our transaction and integration expenses. Moreover, many of the expenses that will be incurred are, by their nature, difficult to estimate accurately. To the extent our transaction expenses are higher than anticipated and integration costs are material, our business, financial condition, results of operations, and cash flows could be materially adversely affected and our ability to meet the leverage ratio and fixed charged ratio mandated by our credit facilities may be impaired.

We may be unable to make, on a timely basis, necessary changes to the Provide Commerce internal control structure.

        In performing the audit of the consolidated financial statements of Provide Commerce for the year ended December 31, 2013, Provide Commerce's external auditor identified several deficiencies in the internal control over financial reporting. The following were considered to be material weaknesses in Provide Commerce's internal controls:

31


Table of Contents

        Following completion of the transaction, Provide Commerce will be included in FTD's reporting under the Exchange Act. In addition, under the Sarbanes-Oxley Act of 2002, we must maintain effective disclosure controls and procedures and internal control over financial reporting. We may face difficulties or experience delays in developing changes and improvements to Provide Commerce's internal controls and accounting systems subsequent to the closing of the transaction. We may need to commit substantial resources, including substantial time from existing accounting personnel and from external consultants, to implement additional procedures and improved controls. This in turn could have an adverse effect on our business, results of operations, or financial condition, harm our reputation, or otherwise cause a decline in investor confidence and our stock price.

We may be unable to integrate Provide Commerce's business with our own successfully. The Provide Commerce business operates in a manner different from our own and with which we have limited experience.

        The transaction involves the combination of two companies that currently operate as independent companies. Following the transaction, we will be required to devote significant management attention and resources to integrating Provide Commerce's business practices and operations with our own. Potential difficulties we may encounter as part of the integration process include the following:

        In addition, the Provide Commerce business is operated in a manner different from the manner in which we operate the FTD business, particularly with regard to inventory management, product delivery and distribution. We have limited experience managing operations similar to those of Provide Commerce and the loss of Provide Commerce management personnel and key employees could have an adverse affect on our ability to integrate and operate the Provide Commerce business. FTD and Provide Commerce have operated and, until the completion of the transaction, will continue to operate independently. It is possible that the integration process could result in diversion of the attention of each company's management which could adversely affect each company's ability to maintain relationships with customers, floral network members, employees and other constituencies or our ability

32


Table of Contents

to achieve the anticipated benefits of the transaction, or could reduce each company's earnings or otherwise adversely affect our business and financial results following the transaction.

Certain of Provide Commerce's businesses are in the early stages of operations and therefore subject to additional risks, uncertainties, expenses and difficulties frequently encountered with respect to early stage businesses.

        Certain of Provide Commerce's businesses, including Gifts.com, Kalla and Sincerely, are in the early stages of operations and require additional investment. The prospects for these businesses must be considered in light of the risks, uncertainties, expenses and difficulties frequently encountered with respect to businesses in their early stages of operations. These businesses must compete with established competitors having substantially greater experience and resources. Failure by Provide Commerce or, following the closing of the transaction, us to implement or execute business strategies successfully, could have a material adverse effect on Provide Commerce's or our business, financial condition, results of operations, and cash flows.

The transaction will result in changes to the FTD board of directors that may affect the strategy and operations of the combined company as compared to that of FTD and Provide Commerce prior to the transaction.

        If we complete the transaction, the composition of the FTD board of directors will change. Following the completion of the transaction, the FTD board will increase from seven to eleven directors and four new directors selected for appointment to the FTD board by LIC will become members of the FTD board. This new composition of the FTD board may affect our business strategy and operating decisions following completion of the transaction. In addition, there can be no assurances that the new board will function effectively as a team and that there will not be any adverse effects on our business as a result.

If the market price of FTD common stock increases prior to the completion of the transaction, the market value of the FTD shares will increase correspondingly and, therefore, the fair value of the purchase price for Provide Commerce will increase correspondingly.

        The number of shares of FTD common stock to be issued in connection with the transaction will not be adjusted in the event of any increase or decrease in the market price of FTD common stock before the closing of the transaction. As a result, the market value of the FTD shares, as reflected in the market price of FTD common stock, may be substantially higher at the time of the closing of the transaction than the market value at the time the FTD board of directors approved the transaction and the stock purchase agreement and we received an opinion from Moelis as to the fairness, from a financial point of view and as of the date of such opinion, to FTD of the consideration to be paid by FTD in the transaction. The market price of FTD common stock may fluctuate due to, among other things, changes in our business, operations or prospects, market assessments of the likelihood of completion of the transaction, the timing of the completion of the transaction, general market and economic conditions and other factors.

Current stockholders will have reduced ownership and voting interests after the transaction.

        We will issue the FTD shares to LIC in the transaction. We expect the FTD shares to represent approximately 35% of the total number of shares of FTD common stock issued and outstanding upon closing of the transaction with FTD's current stockholders owning the remaining 65% of the total number of shares of FTD common stock issued and outstanding. As a result, the ownership and voting interests in FTD of our current stockholders will be significantly reduced following the transaction, which will decrease the ability of our current stockholders to influence the election of directors and

33


Table of Contents

other matters. In addition, our current stockholders may experience dilution in their claim to our earnings per share.

As a significant stockholder of FTD following the transaction, LIC will have significant influence over FTD management and actions requiring general stockholder approval and its presence may affect the ability of a third party to acquire control of us.

        Following the transaction, LIC will own approximately 35% of the total number of shares of FTD common stock issued and outstanding. In connection with the closing of the transaction, the FTD board of directors will be increased from seven to eleven directors, with LIC selecting four new directors for appointment to the board. In addition, the investor rights agreement will contain certain rights in favor of LIC with regard to the appointment and election of LIC nominees to the board. Although the LIC directors will not constitute a majority of the FTD board, they may exercise influence over the decisions of the board.

        As a result, LIC will have significant influence over our affairs, policies and operations, such as the appointment of management, future issuances of common stock or other securities, the payment of dividends, if any, the incurrence of debt, amendments to our certificate of incorporation and bylaws and the entering into of extraordinary transactions, and LIC's interests may not in all cases be aligned with the interests of other FTD stockholders.

        In addition, having LIC as a significant stockholder may have the effect of making it more difficult for a third party to acquire, or of discouraging a third party from seeking to acquire, a majority of the outstanding shares of FTD common stock or control of the FTD board of directors through a proxy solicitation. In that regard, the investor rights agreement contains certain provisions that may magnify these risks, including LIC's right, in certain circumstances in response to a third party tender offer for shares of FTD common stock, to commence its own tender offer, restrictions on LIC's ability to transfer shares of FTD common stock during the restricted period and thereafter, the waiver of Section 203 of the DGCL with respect to LIC and its affiliates and the prohibition upon FTD from implementing a stockholder rights plan, unless the plan exempts certain actions by LIC in accordance with the terms of the investor rights agreement.

LIC may sell shares of FTD common stock beginning 18 months following the closing of the transaction, which could cause our stock price to decline.

        The FTD shares are restricted, but LIC may sell shares of FTD common stock following the transaction under certain circumstances. Concurrent with the closing of the transaction, FTD and LIC will enter into the investor rights agreement, which will impose certain restrictions on LIC's ability to transfer its shares of FTD common stock, including, among other things, an 18 month prohibition on the transfer of any shares of FTD common stock by LIC. The investor rights agreement will also grant LIC certain registration rights that, after the restricted period, will allow LIC to sell a large number of shares of FTD common stock in a short period of time. The sale of a substantial number of shares of FTD common stock by LIC or our other stockholders within a short period of time could cause our stock price to decline, make it more difficult for us to raise funds through future offerings of our common stock or acquire other businesses using our common stock as consideration.

Our future results will suffer if we do not effectively manage our expanded operations following the transaction.

        The transaction is expected to result in a combined company with annual revenues in excess of $1 billion. Our future success depends, in part, upon our ability to manage this expanded business, which will pose substantial challenges for management, including challenges related to the management

34


Table of Contents

and monitoring of new operations and associated increased costs and complexity. There can be no assurances that we will be successful following the transaction.

Our future results following the transaction may differ materially from the unaudited pro forma financial information included in this proxy statement.

        The unaudited pro forma combined financial information contained in this proxy statement is presented for purposes of presenting our historical consolidated financial statements with Provide Commerce's historical consolidated financial statements as adjusted to give effect to the transaction and is not necessarily indicative of the financial condition or results of operations of the combined company following the transaction. The unaudited pro forma combined financial information reflects adjustments, which are based upon preliminary estimates, to allocate the purchase price to Provide Commerce's acquired assets and liabilities. The purchase price allocation reflected in this proxy statement is preliminary, and final allocation of the purchase price will be based upon the fair value of the assets and liabilities of Provide Commerce as of the date of the completion of the transaction. In addition, the assumptions used in preparing the pro forma financial information may not prove to be accurate, and other factors may affect our financial condition and results of operations following the transaction. Any change in our financial condition or results of operations may adversely affect the price of our common stock.

Provide Commerce may have liabilities that are not known, probable or estimable at this time.

        As a result of the transaction, Provide Commerce will become an indirect wholly owned subsidiary of FTD and we will effectively assume all of its liabilities, whether or not asserted. There could be unasserted claims or assessments that we failed or were unable to discover or identify in the course of performing due diligence investigations of Provide Commerce. In addition, there may be liabilities that are neither probable nor estimable at this time which may become probable and estimable in the future. Any such liabilities, individually or in the aggregate, could have a material adverse effect on our business. We may learn additional information about Provide Commerce that adversely affects us, such as unknown, unasserted or contingent liabilities and issues relating to compliance with applicable laws.

35


Table of Contents


SPECIAL MEETING OF FTD STOCKHOLDERS

        We are furnishing this proxy statement to FTD stockholders as part of the solicitation of proxies by the FTD board of directors for use at the special meeting of FTD stockholders to be held on [    •    ], 2014, and at any adjournment or postponement thereof. This proxy statement is first being furnished to stockholders of record on or about [    •    ], 2014.


Date, Time and Place

        The special meeting of FTD stockholders will be held on [    •    ], 2014 at [    •    ] Central Time, at our corporate offices located at 3113 Woodcreek Drive, Downers Grove, IL 60515.


Purpose of the Special Meeting

        At the special meeting, FTD stockholders will be asked to approve:

        Our stockholders must approve the stock issuance in accordance with the terms of the stock purchase agreement in order for us to complete the transaction.

        We are seeking stockholder approval of the stock issuance to satisfy NASDAQ Listing Rule 5635(a), which requires stockholder approval prior to the issuance of securities in connection with the acquisition of stock or assets of another company if the issuance would constitute more than 20% of the total number of shares of FTD common stock outstanding before the issuance. If the transaction is completed, we will issue the FTD shares to LIC, which represent the number of shares of FTD common stock that would equal 35% of the post-closing issued and outstanding shares of FTD common stock (based on the number of shares issued and outstanding on July 29, 2014).

        Other than the two proposals described in this proxy statement, we do not expect any other matters to be presented for a vote at the special meeting. If any other matter is properly brought before the special meeting, your proxy gives authority to the individuals named in the proxy to vote on such matters in their discretion.


Voting; Quorum

        Only stockholders of record of FTD common stock at the close of business on [    •    ], 2014, the record date, are entitled to notice of, and to vote at, the special meeting and any adjournment or postponement thereof. You are entitled to one vote on each matter submitted to stockholders at the special meeting for each share of FTD common stock held as of the record date. At the close of business on the record date, [    •    ] shares of FTD common stock were issued and outstanding. The presence at the special meeting, in person or by proxy, of the holders of a majority of the shares of FTD common stock issued and outstanding on the record date will constitute a quorum.

        All votes will be tabulated by the Inspector of Elections appointed for the special meeting, who will separately tabulate affirmative and negative votes, abstentions and broker non-votes. Broker non-votes are shares held of record by, among others, brokerage firms or financial institutions but not voted due to the failure of the beneficial owners of those shares to provide voting instructions in cases in which such brokerage firms or financial institutions do not have discretion to vote on the proposal without such instructions. See "Voting Procedure—Beneficial Owners of Shares Held in Street Name" below. Abstentions are counted as present for purposes of determining whether there is a quorum for

36


Table of Contents

the transaction of business, but broker non-votes are not. Assuming a quorum is present, broker non-votes will not be counted for purposes of determining whether a proposal has been approved.

        The affirmative vote of the holders of a majority of the shares of FTD common stock represented in person or by proxy and entitled to vote on the matter is required for the approval of the stock issuance, provided that a quorum is present in person or by proxy at the special meeting. A properly executed proxy marked "Abstain" with respect to such matter will be counted for purposes of determining whether there is a quorum and will have the effect of a vote AGAINST the stock issuance. Broker non-votes will not be counted for purposes of determining whether there is a quorum, but, assuming a quorum is present, will have no effect on the stock issuance.

        The affirmative vote of the holders of a majority of the shares of FTD common stock represented in person or by proxy and entitled to vote on the matter is required for the approval of the adjournment of the special meeting, if necessary or appropriate, for the solicitation of additional proxies whether or not a quorum is present at the special meeting. A properly executed proxy marked "Abstain" with respect to such matter will be counted for purposes of determining whether there is a quorum and will have the effect of a vote AGAINST the adjournment of the special meeting. Broker non-votes will not be counted for purposes of determining whether there is a quorum, but, assuming a quorum is present, will have no effect on the adjournment of the special meeting.


Voting Procedure

        Stockholders of Record.    If your shares of FTD common stock are registered directly in your name with our transfer agent, Computershare, you are a stockholder of record. You may vote in person at the special meeting or by proxy. There are three ways stockholders of record can vote by proxy: (1) by telephone (by following the instructions on the proxy card); (2) by Internet (by following the instructions on the proxy card); or (3) by completing and returning the proxy card enclosed with these proxy materials prior to the special meeting or submitting a signed proxy card at the special meeting. Unless there are different instructions on the proxy card, all shares represented by valid proxies (and not revoked before they are voted) will be voted at the special meeting:

        Beneficial Owners of Shares Held in Street Name.    If your shares of FTD common stock are held in an account at a brokerage firm, bank, broker-dealer or other similar organization, then you are the beneficial owner of shares held in "street name," and such organization forwarded to you this proxy statement. Beneficial owners of shares held in street name can vote by proxy by following the instructions on the voting instruction form. Beneficial owners of shares held in street name can vote by proxy, by telephone or by Internet only if telephone or Internet voting is made available by the organization holding your account. The organization holding your account is considered the stockholder of record for purposes of voting at the special meeting. If you do not provide such organization with specific voting instructions, under the rules of the various national and regional securities exchanges, the organization that holds your shares may generally vote on routine matters but cannot vote on non-routine matters. If such organization does not receive instructions from you on how to vote your shares on a non-routine matter, the organization will inform our Inspector of Elections that it does not have the authority to vote on this matter with respect to your shares. This is generally referred to as a "broker non-vote." The approval of the stock issuance and the approval of the adjournment of the special meeting are not considered "routine" matters. Accordingly, if you do not provide voting instructions to your broker with respect to the proposal to approve the stock issuance or the proposal to adjourn the special meeting, the broker may not exercise discretion and is prohibited from giving a

37


Table of Contents

proxy to vote your shares with respect to those proposals. Further effects of a broker non-vote are described under "Voting; Quorum" above.

        YOUR VOTE IS IMPORTANT. PLEASE VOTE WHETHER OR NOT YOU PLAN TO ATTEND THE SPECIAL MEETING IN PERSON.

        Even if you plan to attend the special meeting, we encourage you to read this proxy statement and the documents incorporated by reference into this proxy statement and submit your vote promptly so that your shares of FTD common stock will be represented and voted in accordance with your instructions. Voting by telephone, over the Internet or by proxy card will not prevent you from voting in person, but will ensure that your vote is counted, if, for whatever reason, you are unable to attend the special meeting.

        You may revoke your proxy at any time before it is actually voted at the special meeting by:

        Your attendance at the special meeting will not, by itself, constitute a revocation of your proxy. You may also be represented by another person present at the special meeting by executing a form of proxy designating that person to act on your behalf.

        Shares may only be voted by or on behalf of the record holder of shares as indicated in our stock transfer records. If you are a beneficial owner of our shares, but those shares are held of record by another person such as a brokerage firm or bank, then you must provide voting instructions to the appropriate record holder so that such person can vote the shares. In the absence of such voting instructions from you, the record holder may not be entitled to vote those shares.


Adjournments and Postponement

        Although it is not currently expected, the special meeting may be adjourned or postponed for the purpose of soliciting additional proxies. Any signed proxies received by FTD in which no voting instructions are provided on such matter will be voted FOR the adjournment proposal. Any adjournment or postponement of the special meeting for the purpose of soliciting additional proxies will allow stockholders who have already sent in their proxies to revoke them at any time prior to their use at the special meeting as adjourned or postponed.


Solicitation

        This solicitation is made on behalf of our board of directors, and we will pay the costs of solicitation. Copies of solicitation materials will be furnished to banks, brokerage firms and other custodians, nominees and fiduciaries holding shares in their names that are beneficially owned by others so that they may forward the solicitation material to such beneficial owners upon request. We will reimburse banks, brokerage firms and other custodians, nominees and fiduciaries for reasonable expenses incurred by them in sending proxy materials to our stockholders. In addition to the solicitation of proxies by mail, our directors, officers and employees may solicit proxies by telephone, facsimile or personal interview. No additional compensation will be paid to these individuals for any such services. We have engaged D.F. King & Co., Inc. to assist in the solicitation of proxies for the special meeting and will pay D.F. King & Co., Inc. a fee of approximately $12,500, plus reimbursement of out-of-pocket expenses.

38


Table of Contents


Recommendation of the FTD Board of Directors

        AFTER CAREFUL CONSIDERATION, OUR BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR THE PROPOSAL TO APPROVE THE STOCK ISSUANCE AND FOR THE PROPOSAL TO ADJOURN THE SPECIAL MEETING, IF NECESSARY OR APPROPRIATE, TO SOLICIT ADDITIONAL PROXIES.


Householding

        We follow a procedure called "householding," which the SEC has approved. Under this procedure, we may deliver a single copy of this proxy statement to stockholders who share the same address unless we have received contrary instructions from one or more of the stockholders. This procedure reduces our printing costs, mailing costs and fees. If you would like to receive an additional copy of this proxy statement or separate copies of future proxy materials, please submit your request to: FTD Companies, Inc., c/o Investor Relations, 3113 Woodcreek Drive, Downers Grove, Illinois 60515, telephone: (630) 724-6984. Similarly, if you share an address with another stockholder and received multiple copies of this proxy statement, you may write or call us at the above address and telephone number to make arrangements to receive a single copy of our proxy materials at the shared address in the future.

        If your shares are registered differently or are held in more than one account at a brokerage firm, bank, broker-dealer or other similar organization, you may receive more than one copy of this proxy statement. Please follow the instructions printed on the proxy card or voting instruction form accompanying each copy of the proxy statement that you receive and vote the shares represented by each proxy card or voting instruction form to ensure that all of your shares are voted. We encourage you to have all accounts registered in the same name and address whenever possible. If you are a registered holder, you can accomplish this by contacting our transfer agent, Computershare, at (800) 962-4284 or in writing at Computershare, 250 Royall Street, Canton, Massachusetts 02021. If your shares are held in an account at a brokerage firm, bank, broker-dealer or other similar organization, you can accomplish this by contacting the brokerage firm, bank, broker-dealer or other similar organization.


Stockholder Proposals for 2015 Annual Meeting

        Stockholder proposals that are intended to be presented at our 2015 annual meeting of stockholders and included in our proxy statement relating to the 2015 annual meeting must be received by us no later than December 29, 2014, which is 120 calendar days before the anniversary of the date on which the proxy statement for our 2014 annual meeting was first distributed to our stockholders. If the date of the 2015 annual meeting is moved more than 30 days prior to, or more than 30 days after, June 10, 2015, the deadline for inclusion of proposals in our proxy statement for the 2015 annual meeting instead will be a reasonable time before we begin to print and mail our proxy materials. All stockholder proposals must be in compliance with applicable laws and regulations in order to be considered for possible inclusion in the proxy statement and form of proxy for the 2015 annual meeting.

        If a stockholder wishes to present a proposal at our 2015 annual meeting of stockholders and the proposal is not intended to be included in our proxy statement relating to the 2015 annual meeting, the stockholder must give advance notice to us prior to the deadline (the "Bylaw Deadline") for the annual meeting determined in accordance with our Bylaws. Under our Bylaws, in order to be deemed properly presented, the notice of a proposal must be delivered to our Corporate Secretary no later than March 12, 2015, and no earlier than February 10, 2015, which dates are 90 days and 120 days, respectively, prior to the anniversary of the date of the 2014 annual meeting.

39


Table of Contents

        However, if we determine to change the date of the 2015 annual meeting so that it occurs more than 30 days prior to, or more than 30 days after, June 10, 2015, stockholder proposals intended for presentation at the 2015 annual meeting but not intended to be included in our proxy statement relating to the 2015 annual meeting must be received by our Corporate Secretary no later than the close of business on the tenth day following the day on which such notice of the date of the 2015 annual meeting is mailed or public disclosure of the date of the annual meeting is made, whichever first occurs (the "Alternate Date"). If a stockholder gives notice of such proposal after the Bylaw Deadline (or the Alternate Date, if applicable), the stockholder will not be permitted to present the proposal to the stockholders for a vote at the 2015 annual meeting. All stockholder proposals must be in the form required by our Bylaws.

        If a stockholder complies with such procedures and submits the proposal before the Bylaw Deadline (or the Alternate Date, if applicable), then the holders of proxies solicited by the FTD board of directors for the annual meeting of stockholders at which that proposal is submitted will not have discretionary voting power with respect to that proposal and cannot vote those proxies in the absence of specific voting instructions from the persons who gave those proxies.

40


Table of Contents


THE TRANSACTION

        At the FTD special meeting, our stockholders will be asked to consider and vote upon a proposal to approve the stock issuance. Set forth below in this section, and in the section entitled "The Stock Purchase Agreement" beginning on page 70, is a discussion of the proposed transaction, including a description of the terms and conditions of the stock purchase agreement. You should review these sections carefully in connection with your consideration of the proposal.


General Description of the Transaction

        On July 30, 2014, FTD, LIC, and Provide Commerce entered into the stock purchase agreement.

        Pursuant to the stock purchase agreement, FTD, Inc., a wholly owned subsidiary of FTD, will acquire from a wholly owned subsidiary of LIC all of the issued and outstanding shares of common stock, par value $0.001 per share, of Provide Commerce for an aggregate purchase price of approximately $430 million. The purchase price consists of (1) $121 million in cash, and (2) the FTD shares, totaling 10,203,010 shares of FTD common stock. The cash portion of the purchase price is subject to adjustment for changes in Provide Commerce's working capital as of the date of closing of the transaction, certain transaction expenses and other customary adjustments that may be determined at or after the closing. The stock portion of the purchase price consists of the number of shares of FTD common stock that would equal 35% of the post-closing issued and outstanding shares of FTD common stock (based on the number of shares issued and outstanding on July 29, 2014), valued for purposes of the transaction at the volume weighted average closing price of FTD common stock for the ten trading days ended July 28, 2014.

        Upon closing of the transaction, Provide Commerce will become a wholly owned subsidiary of FTD. The FTD board of directors believes that the transaction will be beneficial because it is expected to enhance FTD's consumer floral and gifting category, diversify revenue streams and broaden consumer demographics, enhance the consumer shopping experience and strengthen FTD's floral network. In addition, the transaction is expected to generate significant cost synergies that will increase stockholder value, including approximately $25 million in annual synergies that are expected within 36 months of the closing of the transaction, and strengthen FTD's financial position.

        The closing of the transaction is subject to various customary closing conditions, including regulatory approval and approval of the stock issuance by FTD stockholders. The stock purchase agreement contains customary representations and warranties made by each of FTD, LIC and Provide Commerce and contains certain termination rights for both FTD and LIC, which provide that the parties must pay certain termination fees to the other under certain circumstances. The parties have also agreed that prior to closing the transaction, LIC will separate, by means of a distribution, the RedEnvelope business from the Provide Commerce business. The RedEnvelope business will be retained by LIC and will not be part of the transaction.

        Concurrent with the closing of the transaction, FTD and LIC also will enter into the investor rights agreement. The investor rights agreement will govern certain rights of and restrictions on LIC in connection with the shares of FTD common stock that LIC will own following the transaction. Among other things, the investor rights agreement provides for certain restrictions on LIC's ability to acquire additional shares of FTD common stock in excess of a cap and includes customary standstill provisions applicable to LIC during the restricted period, and certain lesser restrictions following the restricted period. The investor rights agreement also includes limitations on pledging, stock lending transactions and hedging by LIC of shares of FTD common stock. Pursuant to the terms of the investor rights agreement, LIC is entitled to customary demand and piggyback registration rights and, subject to certain limitations, a participation right pursuant to which LIC may maintain its ownership percentage of FTD common stock. For so long as LIC owns at least 15% of the outstanding shares of FTD common stock, FTD is required to provide advance notice to LIC before entering into an agreement

41


Table of Contents

regarding a merger, consolidation, change of control or other business combination transaction. The investor rights agreement also includes certain director appointment and nomination rights in favor of LIC and obligates LIC, subject to certain limitations, to vote its shares of FTD common stock in favor of the FTD board's director slate at each stockholders meeting at which directors are to be elected.

        In order to finance the transaction, FTD has entered into the credit agreement amendment with the lenders and borrowed the term loan under the amended and restated credit agreement. The amended and restated credit agreement provides, subject to the terms and conditions set forth therein, for the acquisition advance in connection with the closing of the transaction to be used to finance the cash portion of the purchase price. The commitments of the lenders to fund the acquisition advance are subject to certain limited conditions set forth in the amended and restated credit agreement.

        The stock purchase agreement, investor rights agreement and agreements related to financing the transaction are discussed more fully below.

        As of June 30, 2014, FTD and Provide Commerce incurred transaction costs of $1.7 million each. FTD expects to incur approximately $13 to $15 million in total transaction costs. Provide Commerce expects to incur approximately $4 to $5 million in total transaction costs.


The Companies

FTD Companies, Inc.

        We are a premier floral and gifting company with a vision to be the leading and most trusted floral and gifting company in the world. Our mission is to inspire, support, and delight our customers when expressing life's most important sentiments. We provide floral, gift and related products and services to consumers, retail florists, and other retail locations and companies in need of floral and gifting solutions. Our business uses the highly-recognized FTD® and Interflora® brands, both supported by the iconic Mercury Man logo. While we operate primarily in the U.S., Canada, the U.K., and the Republic of Ireland, we have worldwide presence as our iconic Mercury Man logo is displayed in nearly 40,000 floral shops in 150 countries. Our portfolio of brands also includes Flying Flowers, Flowers Direct, and Drake Algar in the U.K. While floral arrangements and plants are our primary offerings, we also market and sell gift items, including jewelry, chocolate dip delights™ and other sweets, gift baskets, wine, fruit, and spa products.

        Prior to November 1, 2013, FTD was a wholly owned subsidiary of United Online. On November 1, 2013, United Online separated into two independent, publicly-traded companies: FTD Companies, Inc. and United Online, Inc. The separation was consummated through a tax-free dividend involving the distribution of all shares of FTD common stock to United Online stockholders. In connection with the separation, holders of United Online common stock received one share of FTD common stock for every five shares of United Online common stock held on the separation record date (prior to giving effect to the reverse stock split of United Online shares). Following completion of the separation, FTD became an independent, publicly-traded company on the NASDAQ Global Select Market utilizing the symbol "FTD".

        FTD Companies, Inc., formerly known as UNOL Intermediate, Inc., is a Delaware corporation that was formed in April 2008. We maintain our principal executive offices at 3113 Woodcreek Drive, Downers Grove, IL 60515. Our telephone number is (630) 719-7800.

Provide Commerce, Inc.

        Provide Commerce, acquired by LIC in February 2006, is a leading ecommerce retailer of high quality gifts backed by superior customer service. With a portfolio of brands that offer fresh flowers, gourmet food products, unique personalized gifts, and other gifting items, Provide Commerce presents a wide assortment of gifting options for consumers at a variety of price points. Provide Commerce

42


Table of Contents

utilizes proprietary technology to power its websites, manage the supply chain for its perishable products, and conduct light manufacturing operations for its personalized products. Provide Commerce derives a large portion of its revenue from the sale of flowers and plants on its ProFlowers and ProPlants websites, and the remainder primarily from the sale of gourmet foods and gifts from its branded websites and mobile apps: Cherry Moon Farms, for fresh premium fruits; Shari's Berries, for gourmet-dipped berries and related gifting products; Personal Creations, for personalized and unique gifts; Gifts.com, for a wide variety of everyday gifting searchable through its proprietary gifting tools; Kalla, for unique high-end floral gifting and delivery experiences in select locales; and Sincerely, for mobile gifting apps. The principal executive offices of Provide Commerce are located at 4840 Eastgate Mall, San Diego, CA 92121. Provide Commerce's telephone number is (858) 729-2800.

Liberty Interactive Corporation

        LIC operates and owns interests in a broad range of digital commerce businesses. Those interests are currently attributed to two tracking stock groups: the Liberty Interactive Group and the Liberty Ventures Group. The Liberty Interactive Group is primarily focused on digital commerce and consists of Liberty Interactive Corporation's subsidiaries QVC, Provide Commerce, Backcountry.com, Bodybuilding.com, and CommerceHub and its interest in HSN. The businesses and assets attributed to the Liberty Venture Group consist of all of Liberty Interactive Corporation's businesses and assets other than those attributed to the Liberty Interactive Group and include its interest in Expedia, and minority interests in Time Warner and Time Warner Cable. The principal executive offices of LIC are located at 12300 Liberty Boulevard, Englewood, CO 80112. LIC's telephone number is (720) 875-5300.

        LIC owns Provide Commerce indirectly through Liberty Interactive, LLC, a wholly owned subsidiary of LIC.


Background of the Transaction

        Following the November 1, 2013 completion of the separation of FTD from United Online, the FTD board of directors has regularly evaluated strategies for enhancing stockholder value as we seek to execute our key strategic objectives and achieve our vision of being the leading and most trusted floral and gifting company in the world. In this regard, following the separation, FTD consulted with Moelis regarding various capital allocation matters. Moelis was familiar with the FTD business, having served as financial advisor to United Online in connection with the separation transaction.

        In January 2014, representatives of Moelis met with representatives of LIC, which included Gregory Maffei, President & CEO of LIC, and Christopher Shean, Senior Vice President and CFO of LIC, to discuss business unrelated to a possible transaction involving FTD and Provide Commerce. During the course of the conversation, Mr. Maffei indicated an interest in exploring a potential transaction with FTD.

        On January 21, 2014, representatives of Moelis contacted Robert Apatoff, our Chief Executive Officer, and conveyed LIC's interest in a possible transaction with FTD.

        On January 22, 2014, following discussions among FTD senior management as well as a discussion with Robert Berglass, our Chairman, Mr. Apatoff indicated to Moelis that FTD would be amenable to discussions with LIC regarding a potential acquisition of Provide Commerce by FTD. Moelis then contacted LIC and scheduled an initial meeting between FTD and LIC for February 19, 2014.

        On January 30, 2014, the FTD board of directors held a regularly scheduled meeting. Representatives of Moelis participated in the meeting at the request of the FTD board. During the meeting, FTD senior management reviewed with the board the discussions surrounding a possible acquisition of Provide Commerce from LIC that had taken place. Representatives of Moelis then provided the FTD board with an overview of LIC and the Provide Commerce business. Also at the

43


Table of Contents

meeting, Scott Levin, our General Counsel, provided the FTD board with an overview of the directors' fiduciary duties in general as well as such fiduciary duties in connection with a potential acquisition of Provide Commerce from LIC. At the conclusion of the meeting, the FTD board supported senior management's efforts to pursue initial discussions with LIC regarding a potential transaction.

        In February 2014, the parties negotiated the terms under which they would be willing to share information and, on February 19, 2014, FTD and LIC entered into a confidentiality agreement that included mutual standstill provisions. That same day, Mr. Apatoff and Becky Sheehan, our Chief Financial Officer, met with Messrs. Maffei and Shean in Los Angeles for initial discussions regarding the parameters of a possible transaction in which FTD would acquire Provide Commerce from LIC. Representatives of Moelis also were present at this meeting.

        Over the next month, representatives of Moelis coordinated the exchange of high-level business diligence items between FTD and LIC, and both parties opened data rooms to allow sharing of this information.

        On February 27, 2014, the FTD board of directors held a regularly scheduled meeting. Representatives of Moelis also participated in the meeting at the request of the FTD board. At the meeting, FTD senior management updated the FTD board regarding the February 19 meeting with representatives of LIC. Moelis, at the request of the FTD board, reviewed and presented on capital allocation alternatives available for FTD. At the meeting, the FTD board authorized a common stock repurchase plan. In addition, after further discussion, the FTD board directed senior management to further explore a potential acquisition of Provide Commerce from LIC.

        On March 18, 2014, Messrs. Apatoff and Levin and Ms. Sheehan met with Mr. Shean and other representatives of LIC in Denver for further discussions regarding the potential transaction. Members of the Provide Commerce management team also were present at the meeting. At this meeting, the parties discussed, among other things, deal structure, issues discovered during preliminary diligence and preliminary valuation matters. At the conclusion of the meeting, the parties agreed to continue to evaluate the potential transaction.

        Following the March 18 meeting, Mr. Shean informed representatives of Moelis that LIC would be interested in selling Provide Commerce to FTD for a purchase price in which Provide Commerce would be valued at the same EBITDA (defined as earnings before interest, taxes, depreciation, and amortization expense) multiple as FTD. Mr. Shean indicated that LIC was primarily interested in receiving FTD common stock as consideration for Provide Commerce, though LIC understood that any transaction that included FTD common stock as consideration would involve LIC receiving a minority stake in FTD.

        On March 25, 2014, the FTD board of directors held a regularly scheduled meeting. Representatives of Moelis also participated in the meeting at the request of the FTD board. At the meeting, FTD senior management and Moelis provided the board with an update regarding the discussions with LIC and Provide Commerce, including a summary of the March 18 meeting in Denver. The FTD board received detailed presentations regarding a possible acquisition of Provide Commerce by FTD, including preliminary synergy and valuation analyses from Moelis. The FTD board also discussed other transaction considerations and a proposed response to the initial LIC offer communicated to Moelis by Mr. Shean. After further discussion, the FTD board directed senior management and Moelis to evaluate additional transaction considerations and valuation matters. The FTD board then determined to convene a special meeting on March 28, 2014 to further consider the potential acquisition of Provide Commerce.

        On March 28, 2014, the FTD board of directors held a special meeting. Representatives of Moelis also participated in the meeting at the request of the FTD board. At the meeting, Moelis provided the board with a summary of additional transaction considerations and valuation matters as FTD

44


Table of Contents

considered a response to Provide Commerce's initial proposal. After further discussion, the FTD board instructed FTD senior management and Moelis to make a preliminary proposal to LIC regarding the terms on which FTD would be interested in acquiring Provide Commerce, subject to further diligence. FTD's preliminary proposal involved the acquisition of Provide Commerce for approximately $430 million plus potential additional value for the developing and non-perishable businesses of Provide Commerce. The preliminary proposal contemplated the issuance of FTD common stock to LIC as partial transaction consideration. In this regard, FTD senior management had consulted with and received advice from Jones Day, as legal counsel to FTD, including regarding the potential forms of consideration for the acquisition of Provide Commerce. Accordingly, based on the recommendation of FTD's legal and financial advisors, the preliminary proposal would involve limiting the stock portion of the transaction consideration such that LIC initially would own 35% of the outstanding shares of FTD common stock. The preliminary proposal would further require that LIC enter into a standstill agreement, which would include limits on LIC's ability to acquire additional shares of FTD common stock. These limitations initially would cap LIC's total ownership at 37.5% of the outstanding shares of FTD common stock through December 31, 2016 and then at 40% of the outstanding shares of FTD common stock after that date. In addition, the preliminary proposal contemplated that LIC would have the right to elect new members to the FTD board, commensurate with its potential ownership of FTD common stock. The FTD board indicated a willingness to enter into exclusive negotiations with LIC for a limited period and directed FTD senior management and Moelis to communicate the preliminary proposal to LIC.

        Following the March 28 meeting of the FTD board of directors, Moelis, at the direction of FTD senior management, communicated FTD's preliminary proposal for the acquisition of Provide Commerce to LIC.

        Over the course of April 2014, representatives of LIC and FTD had numerous discussions regarding the terms of a potential transaction. Moelis was involved in these discussions, as were Jones Day and Baker Botts L.L.P. ("Baker Botts"), as legal counsel to LIC. LIC's initial response to FTD's preliminary proposal was to indicate a willingness to reduce the purchase price for Provide Commerce to approximately $537.8 million. Mr. Shean, on behalf of LIC, indicated that LIC was willing to reduce the purchase price by approximately $10 million to fund the wind-down of Provide Commerce's RedEnvelope business, which FTD had indicated would not be a strategic fit for FTD going forward. Mr. Shean also indicated that, while LIC would be amenable to receiving some cash in the transaction and initial limitations of its ownership of FTD common stock, LIC believed that capping LIC's total ownership at 45% of the outstanding shares of FTD common stock for a three-year period, with no cap thereafter, would be appropriate. After additional discussions, LIC indicated a willingness to further reduce the purchase price for Provide Commerce to approximately $522 million.

        FTD senior management, with the assistance of Moelis, evaluated LIC's response to FTD's preliminary proposal, specifically in the light of additional financial and other diligence information that had been provided to FTD by LIC and Provide Commerce. Based on this evaluation, FTD senior management was of the view that FTD could increase the amount that FTD would pay for Provide Commerce to approximately $445 million plus $35 million for the developing and non-perishable businesses of Provide Commerce. FTD's continued diligence confirmed that the RedEnvelope business would not be a strategic fit for FTD going forward, so FTD's valuation of Provide Commerce reflected approximately $10 million of value that could be realized by LIC in connection with LIC's wind-down of the RedEnvelope business. Throughout this period, FTD continued to maintain that the standstill agreement and ownership limitations initially proposed by FTD would be central to any FTD agreement to acquire Provide Commerce that would result in LIC becoming a significant FTD stockholder.

        On April 25, 2014, the revised FTD proposal was communicated to LIC by Moelis and, on April 29, 2014, Mr. Shean, on behalf of LIC, notified FTD and Moelis that LIC was prepared to accept

45


Table of Contents

FTD's proposed valuation of Provide Commerce. Mr. Shean further indicated that LIC was prepared to move forward with negotiations regarding definitive transaction documentation. Mr. Shean noted that further negotiations regarding the proposed standstill agreement and ownership limitations would be required because LIC believed that FTD's proposal would unduly restrict LIC's flexibility with respect to an investment in FTD.

        At that time, LIC's position, as communicated to representatives of Moelis, was that LIC's total ownership of FTD common stock should be capped at 40% of the outstanding shares until December 31, 2016, at which time the cap would increase to 49.9% of the outstanding shares. Further, LIC's position was that it should have the right to launch a tender offer directly to FTD's other stockholders. Representatives of Moelis advised LIC that these positions would be communicated to FTD in advance of a meeting of the FTD board of directors scheduled for May 1, 2014.

        On April 30, 2014, Mr. Apatoff updated the FTD board on these developments in advance of an FTD board of directors meeting scheduled for the next day.

        On May 1, 2014, the FTD board of directors held a regularly scheduled board meeting. Representatives of Jones Day and Moelis participated in the meeting at the request of the FTD board. At the meeting, FTD senior management and Moelis provided the board with a detailed summary of the status of discussions regarding the potential acquisition of Provide Commerce. In this regard, the board reviewed a summary of the various transaction proposals that had been communicated among the parties and their respective advisors, as well as a recommendation that the parties agree to negotiate exclusively for approximately 60 days, or through the July 4 holiday. Jones Day also reviewed for the board the fiduciary duties of the directors in considering the potential transaction. The FTD board then reviewed the proposed terms of a formal engagement of Moelis as the company's financial advisor in connection with the potential transaction. At the conclusion of the meeting, the FTD board directed senior management to finalize the engagement with Moelis. The FTD board also authorized the entry into an exclusivity agreement with LIC providing for exclusivity through July 10, 2014, and further directed FTD senior management to continue to evaluate a potential acquisition of Provide Commerce. However, the FTD board reiterated the importance of including a standstill agreement and ownership limitations along the lines of those initially proposed by FTD.

        On May 2, 2014, Jones Day provided Baker Botts with a draft of an exclusivity agreement. On May 5, 2014, following negotiations regarding the terms and conditions of exclusivity, we entered into an exclusivity agreement with LIC providing for exclusivity through July 10, 2014. At this time, the parties also agreed to facilitate the sharing of more detailed diligence information.

        On May 14, 2014, at the request of Baker Botts, representatives of Jones Day and Baker Botts held a conference call to discuss LIC's position with respect to the terms of the investor rights agreement. In addition to reiterating LIC's position with respect to the share ownership cap (40% until December 31, 2016, then increasing to 49.9%) and the ability to launch a tender offer at any time without approval of the FTD board, representatives of Baker Botts communicated LIC's position that LIC should be able to close any such tender offer upon the tender of 60% of the total outstanding shares of FTD common stock, including shares already owned by LIC. At the conclusion of the conference call, Jones Day advised Baker Botts that Jones Day would discuss LIC's positions with FTD senior management and Moelis.

        On May 15, 2014, after further discussions with FTD senior management and Moelis, Jones Day circulated initial drafts of the stock purchase agreement and the investor rights agreement to LIC and Baker Botts. These drafts reflected FTD's original positions on, among other things, the LIC ownership cap and other standstill provisions. During the week of June 2, 2014, Baker Botts provided comments to the initial drafts of those agreements.

        On May 16, 2014, we formally engaged Moelis as our financial advisor in connection with the potential transaction.

46


Table of Contents

        From mid-May through mid-June 2014, representatives of LIC and FTD, along with their respective legal advisors and Moelis, as financial advisor to FTD, had a number of discussions regarding deal terms. In addition, while the parties were in general agreement as to the valuation of Provide Commerce for purposes of a potential transaction, discussions continued regarding the treatment of the RedEnvelope business. If the RedEnvelope business remained part of the transaction, FTD would wind-down that business as promptly as practicable following completion of the transaction and after the 2014 Christmas season. As a result, the parties discussed a variety of alternatives for funding the wind-down of the RedEnvelope business.

        Also during this period, the parties continued to discuss matters relating to LIC's possible ownership of FTD common stock in connection with a potential transaction. LIC continued to communicate an interest in receiving as much FTD common stock as possible in connection with a potential transaction. FTD, along with its legal and financial advisors, reiterated that FTD was not interested in proceeding with a potential transaction unless the amount of FTD common stock issued to LIC was limited, and unless the deal terms involved additional meaningful limitations on LIC's post-transaction ownership of FTD common stock, including a standstill agreement that included a cap on LIC's ownership of FTD common stock consistent with the terms initially proposed by FTD following the March 28 meeting of the FTD board of directors.

        On June 10, 2014, the FTD board of directors met at a regularly scheduled board meeting held in connection with the company's annual meeting of stockholders. At the meeting, FTD senior management provided the board with an update regarding the status of discussions surrounding the potential acquisition of Provide Commerce as well as the status of financing for the potential transaction. Also at the meeting, the FTD board discussed with members of senior management the potential short-term and long-term synergies that could result from the potential transaction. After further discussion, the FTD board directed FTD senior management to continue to pursue discussions regarding the potential transaction.

        During the week of June 16, 2014, representatives of Moelis continued their discussions with Mr. Shean regarding the cap on LIC's future ownership, the conditions for closing any tender offer by LIC and other aspects of the investor rights agreement. FTD management viewed satisfactory agreement on these items to be gating issues for further negotiations between the parties. On June 18, 2014, a representative of Moelis sent Mr. Shean a summary of the key terms of the investor rights agreement that FTD senior management believed could be presented to the FTD board of directors for approval, including (1) a cap on LIC's ownership of 37.5% of the total outstanding shares of FTD common stock through December 31, 2016, followed by a cap of 40% thereafter, (2) a right of LIC to launch a tender offer only after December 31, 2016, provided that LIC has negotiated in good faith with the FTD board of directors for a period of at least thirty days and is unable to reach an agreement on a transaction and any such tender offer would close only if a majority of the outstanding shares of FTD common stock not owned by LIC were tendered, and (3) a right of FTD to issue 19.9% of the outstanding shares of FTD common stock to a potential third party acquirer, outside of any preemptive right of LIC, which 19.9% stake could be voted in favor of such third party acquisition in a vote of FTD's stockholders.

        On June 19, 2014, Mr. Shean and representatives of Moelis continued to negotiate certain details of FTD's positions. On June 20, 2014, Mr. Shean informed Moelis that the FTD positions outlined above would be acceptable to LIC, subject to further negotiation of certain additional terms. Also on June 20, 2014, Mr. Shean informed FTD and Moelis that LIC had determined to remove the RedEnvelope business from the potential transaction. As a result, the parties were in preliminary agreement that Provide Commerce would be valued at $470 million for purposes of the potential transaction. Later on June 20, 2014, FTD instructed Jones Day to immediately proceed with in-depth negotiations of the other terms and conditions of the stock purchase agreement and the investor rights agreement.

47


Table of Contents

        On June 30, 2014, the FTD board of directors held a special meeting to discuss the status of the potential acquisition of Provide Commerce. Representatives of Jones Day and Moelis participated in the meeting at the request of the FTD board. At the meeting, FTD senior management updated the board regarding the status of discussions surrounding the potential transaction, specifically the recent progress in terms of resolving deal structure issues. Also at the meeting, the FTD board further discussed with senior management the potential short-term and long-term synergies that could be achieved in the potential transaction. At the conclusion of the meeting, the FTD board directed senior management to continue to pursue discussions regarding the potential transaction.

        During the week of June 30, 2014, Jones Day and Baker Botts exchanged further revised drafts of the stock purchase agreement and the investor rights agreement. In this regard, the parties scheduled an in-person meeting for July 8, 2014 to discuss the terms and conditions of the transaction documents.

        On July 7, 2014, Mr. Apatoff met with Mr. Shean in Chicago to discuss various transaction related matters in advance of the negotiation session scheduled for the following day.

        On July 8, 2014, representatives of FTD and LIC, along with representatives of Jones Day and Baker Botts, met in Chicago to negotiate the terms and conditions of the stock purchase agreement and the investor rights agreement. Also that day, Ms. Sheehan had discussions with representatives of Provide Commerce regarding its results of operations for the six months ended June 30, 2014. Following those meetings, and after consultation with Moelis, we determined to seek a reduction in the purchase price in the light of Provide Commerce's results of operations for the first six months of 2014. Representatives of Moelis then discussed with Mr. Shean the possibility of a price reduction, though no specific agreement was reached regarding the amount of any price reduction.

        On July 9, 2014, we and LIC agreed to extend the exclusivity period through July 31, 2014. Later that week, Jones Day circulated a further revised draft of the investor rights agreement and Baker Botts provided comments to the most recent draft of the stock purchase agreement.

        Also beginning on July 9, 2014, Mr. Shean, Mr. Apatoff and representatives of Moelis had a number of discussions regarding a possible purchase price reduction. Following these discussions, Mr. Shean indicated that LIC would be willing to reduce the purchase price to $445 million.

        On July 14, 2014, the FTD board of directors held a special meeting to discuss the status of the potential acquisition of Provide Commerce. Representatives of Jones Day and Moelis participated in the meeting at the request of the FTD board. At the meeting, FTD senior management and Moelis provided the board with an update regarding the status of the potential transaction. In particular, the board received an update regarding Provide Commerce's recent financial performance and the proposed reduction in the purchase price for Provide Commerce. Jones Day reviewed the fiduciary duties of the directors in connection with the proposed transaction. Representatives of Moelis reviewed with the board various financial analyses related to the valuation of Provide Commerce and the proposed price reduction. FTD senior management also provided the board with an update regarding the proposed financing for the transaction. After discussion, the board instructed senior management and Moelis to seek a further price reduction from LIC and to otherwise work to finalize documentation for the proposed transaction. Following the July 14, 2014 FTD board meeting, representatives of Moelis discussed with Mr. Shean a further price reduction to $430 million. After additional discussions among Mr. Apatoff, Mr. Shean and representatives of Moelis, Mr. Shean indicated that LIC would agree to the further price reduction, but stressed that the parties needed to move to finalize documentation for the proposed transaction as soon as possible.

        During the week of July 14, 2014, Jones Day and Baker Botts exchanged further revised drafts of the stock purchase agreement and the investor rights agreement, and representatives of FTD and LIC engaged in further negotiations aimed at finalizing documentation for the proposed transaction.

48


Table of Contents

        On July 21, 2014, the FTD board of directors held a special meeting to discuss the terms and conditions of the stock purchase agreement and the investor rights agreement. Representatives of Jones Day and Moelis participated in the meeting at the request of the FTD board. At the meeting, the board received presentations from FTD senior management, including a review of the proposed financing for the transaction. Jones Day reviewed for the board the fiduciary duties of the directors in connection with the transaction and presented summaries of the terms of the stock purchase agreement and the investor rights agreement. Moelis also reviewed with the FTD board various financial analyses regarding the transaction. At the conclusion of the meeting, the FTD board directed FTD senior management to work to finalize the stock purchase agreement and the investor rights agreement. In addition, the FTD board directed Moelis to further refine and update its financial analyses surrounding the proposed transaction.

        During the week of July 21, 2014, at the request of the FTD board of directors, Moelis provided the FTD board with additional financial analyses relating to the proposed transaction. Also during that week, Jones Day and Baker Botts exchanged further revised drafts of the stock purchase agreement and the investor rights agreement.

        On July 25, 2014 and throughout the ensuing weekend, representatives of FTD and LIC, along with representatives of Jones Day and Baker Botts, had numerous discussions regarding the stock purchase agreement and the investor rights agreement. The parties convened a conference call on the morning of July 26, 2014, following which Jones Day circulated revised drafts of the stock purchase agreement and the investor rights agreement. Jones Day and Baker Botts continued to negotiate the stock purchase agreement and the investor rights agreement throughout the course of the day on July 27, 2014.

        On July 28, 2014, the FTD board of directors held a special meeting to discuss the terms and conditions of the stock purchase agreement and the investor rights agreement. Representatives of Jones Day and Moelis participated in the meeting at the request of the FTD board. At the meeting, the board received presentations from FTD senior management, including a review of the strategic benefits and risks and the proposed financing for the transaction. Jones Day reviewed for the board the fiduciary duties of the directors in considering the transaction and discussed the current terms and conditions of the stock purchase agreement and the investor rights agreement, including a summary of the changes to the agreements from the versions discussed with the FTD board at the prior board meeting. At the July 28 meeting, Moelis reviewed with the FTD board Moelis' financial analysis of the consideration and delivered to the board an oral opinion, which was confirmed by delivery of a written opinion, dated July 28, 2014, addressed to the FTD board to the effect that, as of the date of the opinion and based upon and subject to the conditions and limitations set forth in the opinion, the consideration to be paid in the transaction by FTD is fair from a financial point of view to FTD. After further discussion, the board of directors, by unanimous vote, determined that the proposed transaction with LIC was fair to and in the best interests of FTD and its stockholders, approved the stock purchase agreement and the investor rights agreement, directed that the issuance of FTD common stock to LIC in accordance with the terms of the stock purchase agreement be submitted for consideration by FTD stockholders at a special meeting of FTD stockholders and resolved to recommend that FTD stockholders vote in favor of the issuance of FTD common stock to LIC in accordance with the terms of the stock purchase agreement.

        Negotiations of the final terms continued through the evening of July 29, 2014, until a final agreement was reached and the parties executed the stock purchase agreement. The transaction was publicly announced through a joint press release and a publicly accessible conference call and webcast the next morning prior to the market opening.

49


Table of Contents


Board Recommendation

        After discussion and deliberation based on the information considered during its evaluation of the proposed transaction with LIC, the FTD board of directors unanimously determined that the transaction is fair to and in the best interests of FTD and its stockholders, approved the stock purchase agreement and the investor rights agreement and directed that the stock issuance be submitted for consideration by FTD stockholders at the special meeting. Accordingly, the FTD board recommends that you vote FOR the proposal to approve the stock issuance and FOR the proposal to adjourn the special meeting, if necessary or appropriate, to solicit additional proxies. For more information regarding the factors considered by the FTD board in reaching its decision, see the section entitled "The Transaction—Reasons for the Transaction" below.


Reasons for the Transaction

        As described above in the section entitled "Background of the Transaction," the FTD board of directors, in evaluating the transaction, the stock purchase agreement (including the related stock issuance) and the investor rights agreement, consulted with FTD senior management and FTD's legal and financial advisors, and, in reaching its decision to approve the transaction, including the stock purchase agreement, stock issuance and investor rights agreement, the FTD board discussed and considered a variety of factors weighing positively in favor of the transaction, including, but not limited to, the following:

        Strategic Benefits.    The FTD board of directors considered FTD senior management's belief that the transaction would further FTD's vision to become the leading and most trusted floral and gifting company in the world. In this regard, the FTD board took into account FTD senior management's belief that the transaction would unite two complementary businesses to offer customers a greater variety of floral and gifting products and an enhanced shopping experience. More specifically, the FTD board considered FTD senior management's belief that the transaction would result in the following anticipated benefits, among others:

50


Table of Contents

        Furthermore, we believe that, given the favorable strategic fit, the potential cost synergies and the purchase price, the transaction is expected to be accretive to FTD's 2015 cash earnings per share (net income adjusted for non-cash items including stock-based compensation, depreciation and amortization), excluding transaction, integration and synergy expenses.

        Provide Commerce's Businesses, Operating Results, Financial Condition and Management.    The FTD board of directors considered information with respect to Provide Commerce's businesses, operating results and financial condition on both a historical and prospective basis, and the quality, breadth and experience of Provide Commerce's senior management, including the following factors, among others:

        Consideration.    The FTD board of directors evaluated the transaction consideration, taking into account its total value and composition. The consideration was determined through arms' length negotiations between Provide Commerce and FTD and was approved by the FTD board. Moelis did not recommend any specific consideration to FTD or the FTD board, or that any specific amount or type of consideration constituted the only appropriate consideration for the transaction.

        Financing.    The FTD board of directors considered FTD senior management's belief that we can finance the transaction and the combined company on favorable terms and create a capital structure for the combined company following the completion of the transaction that will allow us to achieve the strategic benefits described above. Specifically, the FTD board noted the terms of the commitment letter which provided for the acquisition advance and the term loan.

        Addition of a Significant Committed Stockholder.    The FTD board of directors considered that LIC will own approximately 35% of FTD at the closing of the transaction. LIC will be FTD's single largest stockholder and will be actively involved at the board level following LIC's selection of four new directors for appointment to the FTD board, reflecting LIC's commitment to and belief in FTD.

        Terms of the Stock Purchase Agreement and Investor Rights Agreement.    In addition to evaluating the reasonableness of the transaction consideration, the FTD board of directors considered the overall terms of the stock purchase agreement and the investor rights agreement, including the parties' respective representations, warranties, covenants and conditions to their respective obligations in such agreements. In particular, the FTD board noted the fact that FTD and LIC are obligated to indemnify each other for a number of items, including for breaches of certain representations and warranties, breaches of covenants and certain other matters.

51


Table of Contents

        The FTD board of directors also considered its ability under the stock purchase agreement to consider certain alternative proposals for strategic transactions prior to the closing of the transaction, and to withdraw its recommendation that our stockholders vote in favor of the issuance of shares of our common stock in connection with the proposed transaction if the FTD board determines that the failure to change its recommendation would result in a breach of its fiduciary duties. Additionally, the FTD board considered the reasonableness of the termination fee or expense reimbursement payable by us in the event that certain termination events occur, including in connection with the FTD board's right to terminate the transaction to enter into an alternative transaction.

        The FTD board of directors further considered that under the investor rights agreement:

        Restrictions on Resales of Stock Issued in the Transaction; Registration Rights.    Another important consideration for the FTD board of directors was the fact that the shares issued in connection with the transaction will be "restricted securities" under Rule 144 of the Securities Act and subject to the further restrictions on transfer contained in the investor rights agreement. Among other things, the FTD board considered that during the 18 month restricted period following closing of the transaction, LIC may not transfer any shares of FTD common stock that it owns, subject to certain exceptions, and thereafter may only sell shares of FTD common stock under certain circumstances. The FTD board further considered the limitations on LIC's ability to engage in pledging, stock lending and hedging transactions. Additionally, the FTD board considered the registration rights provisions of the investor rights agreement as they relate to potential resales of our common stock by LIC, including the provisions providing that we are not obligated to file a registration statement until 18 months after the transaction is completed. The FTD board considered FTD senior management's assessment that the

52


Table of Contents

restrictions on resales of our common stock and the registration rights provisions of the investor rights agreement would help minimize the risk of adverse effects on the market price of our common stock caused by the sale of such stock held by LIC following the transaction or by the perception that such sales could occur.

        Likelihood of Completion of Transaction.    The FTD board of directors considered the likelihood of the transaction being completed, including the terms of the stock purchase agreement and other factors that, taken as a whole, provide a significant degree of assurance that the transaction will be completed. In particular, the FTD board noted that (1) the conditions required to be satisfied prior to completion of the transaction are expected to be fulfilled, (2) we have obtained committed financing for the transaction contemplated by the stock purchase agreement with customary conditions to financing from reputable financing sources and (3) both parties have made commitments in the stock purchase agreement with respect to obtaining regulatory clearances, including clearances under the HSR Act.

        Strategic Alternatives.    The FTD board of directors considered FTD senior management's review of potential strategic alternatives and determined that the value offered in connection with the transaction was more favorable to our stockholders than the potential value that might have resulted from any other strategic opportunity reasonably available to us, including not pursuing any acquisition or other strategic transaction.

        Opinion of Financial Advisor.    The FTD board of directors considered the opinion of Moelis, dated July 28, 2014, addressed to the FTD board as to the fairness, from a financial point of view and as of the date of such opinion, and based upon and subject to the conditions and limitations set forth in the opinion to FTD of the consideration to be paid in the transaction, as more fully described in "—Opinion of FTD's Financial Advisor."

        Due Diligence.    The FTD board of directors considered the scope of the due diligence investigation of Provide Commerce conducted by members of FTD senior management and FTD's legal and financial advisors and evaluated the results.

        Impact of the Transaction on Customers, Florists and Employees.    The FTD board of directors evaluated the expected impact of the transaction on FTD's customers, florists and employees and the benefits that would be derived from the transaction by (1) enhancing operations and floral and gifting offerings, (2) generating additional florist-filled order volume and increasing advertising opportunities and (3) providing more opportunities for employees in a larger company.

        Other Reasons for the Transaction.    The reasons in favor of the transaction considered by the FTD board of directors also include, but are not limited to, the following:

53


Table of Contents

        In addition, the FTD board of directors took into account a number of potentially negative factors in its deliberations concerning the transaction with Provide Commerce, including the following considerations:

54


Table of Contents

        After consideration of these factors, the FTD board of directors determined that the potential negative factors were significantly outweighed by the potential benefits of the transaction to our stockholders.

        The foregoing discussion of information and factors considered by the FTD board of directors is not intended to be exhaustive. In light of the variety of factors considered in connection with its evaluation of the transaction, stock purchase agreement and investor rights agreement, the FTD board did not find it practicable to, and did not, quantify or otherwise assign relative weights to the specific factors considered in reaching its determinations and recommendations. Rather, the FTD board viewed its determinations and recommendations as being based on the totality of information and factors presented to and considered by the board. Moreover, each member of the FTD board applied his or her own personal business judgment to the process and may have given different weight to different factors.

        For the reasons set forth above, the FTD board of directors approved the transaction, including the stock purchase agreement, stock issuance and investor rights agreement, determined that the transaction was advisable and in the best interest of our stockholders and recommends that our stockholders vote FOR the proposal to authorize the issuance of shares of our common stock in connection with the proposed transaction. Additionally, in support of the transaction, the FTD board also recommends that our stockholders vote FOR the proposal to adjourn the special meeting, if necessary or appropriate, to solicit additional proxies in the event that there are not sufficient votes at the time of the special meeting to constitute a quorum or approve the stock issuance.

        This explanation of the FTD board of directors' reasons for the transaction and other information presented in this section is forward-looking in nature and, therefore, should be read in the light of the factors described in the section entitled "Special Note Concerning Forward-Looking Statements" on page 24.


Opinion of FTD's Financial Advisor

        At the meeting of the FTD board of directors on July 28, 2014 to evaluate and approve the transaction, Moelis delivered an oral opinion, which was confirmed by delivery of a written opinion, dated July 28, 2014, addressed to the FTD board to the effect that, as of the date of the opinion and based upon and subject to the conditions and limitations set forth in the opinion, the consideration to be paid by FTD in the transaction is fair from a financial point of view to FTD.

        The full text of Moelis' written opinion dated July 28, 2014, which sets forth the assumptions made, procedures followed, matters considered and limitations on the review undertaken in connection with the opinion, is attached as Annex C to this proxy statement and is incorporated herein by reference. Stockholders are urged to read Moelis' written opinion carefully and in its entirety. Moelis' opinion was provided for the use and benefit of the FTD board of directors (in its capacity as such) in its evaluation of the transaction. Moelis' opinion is limited solely to the fairness, from a financial point of view and as of the date of such opinion, to FTD of the consideration to be paid by FTD in the transaction and does not address FTD's underlying business decision to effect the transaction or the relative merits of the transaction as compared to any alternative business strategies or transactions that might be available with respect to FTD. Moelis' opinion does not constitute a recommendation to

55


Table of Contents

any FTD stockholder as to how such stockholder should vote or act with respect to the transaction or any other matter. In arriving at its opinion, Moelis, among other things:

        In connection with its review, Moelis did not assume any responsibility for independent verification of any of the information supplied to, discussed with or reviewed by Moelis for the purpose of its opinion and has, with the consent of the FTD board of directors, relied on such information being complete and accurate in all material respects. In addition, with the FTD board's consent, Moelis did not make any independent evaluation or appraisal of any of the assets or liabilities (contingent, derivative, off-balance-sheet, or otherwise) of Provide Commerce or FTD, nor was Moelis furnished with any such evaluation or appraisal. With respect to the financial forecasts and other information relating to Provide Commerce, FTD, the expected synergies and the exclusion of a negative one-time $7.6 million impact of weather issues on the Provide Commerce business in the first quarter of 2014 (the "EBITDA Adjustment"), Moelis assumed, at the direction of the FTD board, that such financial information was reasonably prepared on a basis reflecting (1) the best currently available estimates and judgments of the management of Provide Commerce and FTD as to the future performance of Provide Commerce, such expected synergies (including the amount, timing and achievability thereof) and the amount and appropriateness of the EBITDA Adjustment and (2) the best currently available estimates and judgments of the management of FTD as to the future performance of FTD. Moelis also assumed, at the direction of the FTD board, that the future financial results reflected in such forecasts and other information will be achieved at the times and in the amounts projected. Additionally, at the direction of FTD senior management, Moelis did not apply any effect to valuation based upon the proposed pro forma ownership of the combined company, including, without limitation, the significant ownership LIC will have. Finally, at the direction of the FTD board, Moelis relied on the assessments of FTD senior management as to FTD's ability to integrate the businesses of Provide Commerce and FTD.

56


Table of Contents

        Moelis' opinion was necessarily based on economic, monetary, market and other conditions as in effect on, and the information made available to Moelis as of, the date of the opinion. Moelis' opinion did not address, the fairness of the transaction or any aspect or implication thereof to, or any other consideration of or relating to, the holders of any class of securities, creditors or other constituencies of FTD or Provide Commerce. In addition, Moelis did not express any opinion as to the fairness of the amount or nature of any compensation to be received by any officers, directors or employees of any parties to the transaction, or any class of such persons, relative to the consideration or otherwise. Moelis' opinion was approved by a Moelis fairness opinion committee. At the direction of the FTD board of directors, Moelis was not asked to, nor did it, offer any opinion as to any terms of the stock purchase agreement or any aspect or implication of the transaction, except for the consideration to the extent expressly specified in Moelis' opinion. With the consent of the FTD board, Moelis' opinion does not express any opinion as to what the value of FTD common stock actually will be when issued pursuant to the transaction or the price at which FTD common stock may trade at any time. Moelis is not a tax, legal, regulatory or accounting expert and Moelis assumed and relied upon, without independent verification, the assessments of FTD and its other advisors with respect to tax, legal, regulatory and accounting matters. In rendering its opinion, Moelis assumed, at the consent of the FTD board, that the final executed form of the stock purchase agreement would not differ in any material respect from the draft that Moelis reviewed, that the transaction would be consummated in accordance with its terms and that the parties to the stock purchase agreement would comply with all the material terms of the stock purchase agreement. Moelis also assumed, with the consent of the FTD board, that all governmental, regulatory or other consents and approvals necessary for the consummation of the transaction would be obtained without the imposition of any delay, limitation, restriction, divestiture or condition that would have an adverse effect on Provide Commerce or FTD or on the expected benefits to FTD of the transaction. Except as described in this summary, FTD and the FTD board imposed no other instructions or limitations on Moelis with respect to the investigations made or procedures followed by Moelis in rendering its opinion.

        The following is a summary of the material financial analyses presented by Moelis to the FTD board of directors at its meeting held on July 28, 2014, in connection with its opinion.

        Some of the summaries of financial analyses below include information presented in tabular format. In order to fully understand Moelis' analyses, the tables must be read together with the text of each summary. The tables alone do not constitute a complete description of the analyses. Considering the data described below without considering the full narrative description of the financial analyses, including the methodologies and assumptions underlying the analyses, could create a misleading or incomplete view of Moelis' analyses.

Financial Analyses of Provide Commerce

        For purposes of the financial analyses of Provide Commerce described below, the term "implied transaction consideration" refers to the implied value of the consideration provided for in the transaction of $430,000,000, consisting of $121,460,980 in cash and the value of 10,203,010 shares of FTD common stock based on FTD's stock price of $30.24 per share, calculated using the 10-day volume-weighted average price per the draft of the stock purchase agreement, dated July 24, 2014.

        Discounted Cash Flow Analysis.    Moelis performed a discounted cash flow ("DCF") analysis of Provide Commerce using financial forecasts and other information and data provided by Provide Commerce, as adjusted by FTD senior management, to calculate the present value of the estimated future unlevered free cash flows projected to be generated by Provide Commerce, both on a standalone basis and including the expected synergies. Moelis used annual run-rate expected synergies of approximately $25 million, net of implementation costs, as provided by the management of Provide Commerce and FTD. In performing the DCF analysis of Provide Commerce, Moelis utilized a range of discount rates of 12.0% to 13.0% (based on estimates of Provide Commerce's weighted average cost of

57


Table of Contents

capital) to calculate estimated present values as of December 31, 2014 with and without the expected synergies of (1) FTD's estimated after-tax unlevered free cash flows for the period of December 31, 2015 through December 31, 2019 with and without the expected synergies, and (2) estimated terminal values derived by applying a range of multiples of 7.5x to 8.5x to Provide Commerce's adjusted EBITDA (defined as net income before net interest expense, provision (benefit) for income tax expense, depreciation, amortization, stock-based compensation, transaction-related costs, litigation and dispute settlement charges or gains, restructuring and other exit costs, and impairment of goodwill, intangible assets and long-lived assets, and including the EBITDA Adjustment). This analysis indicated the following implied transaction value reference ranges for Provide Commerce, as compared to the implied transaction consideration of $430 million:

Metric
  Implied Transaction Value Reference Ranges

Standalone

  $405 million - $475 million

Including Expected Synergies

  $555 million - $645 million

        Selected Public Companies Analysis.    Moelis reviewed financial and stock market information of the following selected publicly traded e-commerce companies:

        Moelis reviewed, among other things, enterprise values of the selected companies (calculated as market value of the relevant company's diluted common equity based on its closing stock price on July 25, 2014, plus preferred stock, plus, as of the relevant company's most recently reported quarter end, short-term and long-term debt, less cash and cash equivalents, plus book value of non-controlling interests) as a multiple of estimated revenue and adjusted EBITDA for the last twelve months ("LTM") ended March 31, 2014 and calendar years 2014 and 2015. Financial data for the selected companies was based on publicly available research analysts' estimates, public filings and other publicly available information. The mean and median multiples for the selected companies were 1.0x and 0.8x, respectively, in the case of total enterprise value/revenue for the LTM ended March 31, 2014, 0.9x and 0.8x, respectively, in the case of total enterprise value/revenue for each of the calendar years 2014 and 2015, 10.8x and 10.2x, respectively, in the case of total enterprise value/adjusted EBITDA for the LTM ended March 31, 2014, 10.0x and 9.9x, respectively, in the case of total enterprise value/adjusted EBITDA for the calendar year 2014 and 8.2x and 8.7x, respectively, in the case of total enterprise value/adjusted EBITDA for the calendar year 2015. Moelis then applied ranges of selected multiples derived from the selected companies of 10.0x to 13.0x in the case of total enterprise value/adjusted EBITDA for the LTM ended March 31, 2014, 10.0x to 13.0x in the case of total enterprise value/adjusted EBITDA of Provide Commerce's ProFlowers and Gourmet Foods businesses (which adjusted EBITDA included allocated expenses associated with the RedEnvelope business that is not being acquired in the transaction and assumes no value for other assets ("ProFlowers and Gourmet Foods Adjusted EBITDA")) for the LTM ended March 31, 2014, 9.0x to 12.0x in the case of total enterprise value/estimated adjusted EBITDA for the calendar year 2014, 9.0x and 12.0x in the case of total enterprise value/estimated ProFlowers and Gourmet Foods Adjusted EBITDA for the calendar year

58


Table of Contents

2014, 6.5x to 9.5x in the case of total enterprise value/estimated adjusted EBITDA for the calendar year 2015 and 6.5x to 9.5x in the case of total enterprise value/estimated ProFlowers and Gourmet Foods Adjusted EBITDA for the calendar year 2015, to corresponding financial data of Provide Commerce. Financial data for Provide Commerce was based on financial forecasts and other information and data provided by Provide Commerce, as adjusted by FTD senior management. This analysis indicated the following implied transaction value reference ranges for Provide Commerce, as compared to the implied transaction consideration of $430 million:


Implied Transaction Value Reference Ranges:

Metric
  EBITDA Data   Implied Transaction Value
Reference Ranges

Total Enterprise Value/LTM 3/31/14 adjusted EBITDA

  $ 32.5 million   $325 million - $425 million

Total Enterprise Value/LTM 3/31/14 ProFlowers and Gourmet Foods Adjusted EBITDA

  $ 44.8 million   $450 million - $585 million

Total Enterprise Value/ estimated 2014 adjusted EBITDA

  $ 30.9 million   $280 million - $370 million

Total Enterprise Value/ estimated 2014 ProFlowers and Gourmet Foods Adjusted EBITDA

  $ 41.9 million   $380 million - $505 million

Total Enterprise Value/ estimated 2015 adjusted EBITDA

  $ 48.5 million   $315 million - $460 million

Total Enterprise Value/ estimated 2015 ProFlowers and Gourmet Foods Adjusted EBITDA

  $ 53.0 million   $345 million - $505 million

        Selected Precedent Transactions Analysis.    Moelis reviewed financial information of the following selected transactions in the e-commerce industry announced between July 22, 2009 and July 2, 2014:

Date Announced
  Acquirer   Target

07/02/14

  The Kroger Co.   Vitacost.com, Inc.

06/11/14

  Helen of Troy Limited   Healthy Directions, LLC

02/27/14

  Essilor International SA   Coastal Contacts Inc.

08/01/13

  Blucora, Inc.   Monoproice, Inc.

06/04/12

  WellPoint Inc.   1-800 CONTACTS, Inc.

03/24/11

  Walgreen Co.   drugstore.com, inc.

03/21/11

  Shutterfly, Inc.   Tiny Prints, Inc.

02/09/11

  eBay Enterprise, Inc.   Fanatics, Inc.

11/08/10

  Amazon.com Inc.   Quidsi, Inc.

05/20/10

  Rakuten USA, Inc.   Buy.Com, Inc.

07/22/09

  Amazon.com Inc.   Zappos.com, Inc.

Moelis reviewed, among other things, announced transaction values of the selected transactions as a multiple, to the extent information was publicly available, of revenue and EBITDA for the latest twelve months prior to the announcement date of each transaction. Financial data for the relevant transaction was based on publicly available information at the time of announcement of the relevant transaction. The mean and median multiples for the selected transactions were 1.9x and 1.5x, respectively, in the case of transaction value/revenue and 14.4x and 11.6x (excluding Essilor International SA's acquisition of Coastal Contacts Inc., as the EBITDA multiple derived from that acquisition would, in Moelis' judgment, imply too high a value for the transaction), respectively, in the case of transaction value/EBITDA. Moelis then applied a range of selected multiples derived from the selected transactions of 11.5x to 14.5x to Provide Commerce's adjusted EBITDA of $32.5 million for the LTM ended March 31, 2014 and, 11.5x to 14.5x to ProFlowers and Gourmet Foods Adjusted EBITDA of $44.8 million for the LTM ended March 31, 2014. Financial data for Provide Commerce was based on financial forecasts and other information and data provided by Provide Commerce, as adjusted by FTD senior management.

59


Table of Contents

This analysis indicated the following implied transaction value reference ranges for Provide Commerce, as compared to the implied transaction consideration of $430 million:


Implied Transaction Value Reference Ranges:

Metric
  EBITDA Data   Implied Transaction Value
Reference Ranges

Total Enterprise Value/LTM 3/31/14 adjusted EBITDA

  $ 32.5 million   $375 million - $470 million

Total Enterprise Value/LTM 3/31/14 ProFlowers and Gourmet Foods Adjusted EBITDA

  $ 44.8 million   $515 million - $650 million

Financial Analyses of FTD

        Trading History.    Moelis reviewed the historical trading prices for FTD common stock for the approximately 38-week period commencing on the date of the separation and ended July 25, 2014 as compared to the price performance of the S&P 500 and seven selected e-commerce companies (excluding FTD) referred to above under the heading "Financial Analyses of Provide Commerce." Moelis observed that the approximately 38-week range of trading prices was $27.60 - $36.99. Moelis noted that as of July 25, 2014, the closing price of FTD common stock was $29.89 per share, and that FTD's relative trading price performance during the nine months since FTD began trading was a decrease of 3.9%, as compared to an increase of 16.9% for the S&P 500 and a decrease of 16.6% for the peer group.

        Discounted Cash Flow Analysis.    Moelis performed a DCF analysis of FTD using financial forecasts and other information and data provided by FTD senior management to calculate the present value of the estimated future unlevered free cash flows projected to be generated by FTD, on a standalone basis and pro forma for the transaction, including the expected synergies.

        In performing the DCF analysis of FTD on a standalone basis, Moelis utilized a range of discount rates of 10.5% to 12.5% (based on estimates of the standalone Company's weighted average cost of capital) to calculate estimated present values as of December 31, 2014 of (1) the standalone Company's estimated after-tax unlevered free cash flows for the period of December 31, 2015 through December 31, 2019, and (2) estimated terminal values derived by applying a range of multiples of 8.0x to 10.0x to the standalone Company's adjusted EBITDA. This analysis indicated the following implied per share reference range of $23.78 to $32.15 for FTD, as compared to FTD's closing stock price as of July 25, 2014 of $29.89.

        In performing the DCF analysis on the pro forma combined company resulting from the transaction, including the expected synergies, net of implementation costs, Moelis utilized a range of discount rates of 10.5% to 12.5% (based on estimates of the pro forma combined company's weighted average cost of capital) to calculate estimated present values as of December 31, 2014 of (1) the pro forma combined company's estimated after-tax unlevered free cash flows for the period of December 31, 2015 through December 31, 2019, and (2) estimated terminal values derived by applying a range of multiples of 7.5x to 9.5x to the pro forma combined company's adjusted EBITDA. This analysis indicated the following implied per share reference range of $28.74 to $40.61 for the pro forma combined company, as compared to the implied per share reference range of $23.78 to $32.15 based on the DCF analysis of FTD on a standalone basis.

60


Table of Contents

Other Information

        Moelis also noted for the FTD board of directors certain additional factors that were not considered part of Moelis' financial analysis with respect to its opinion but were referenced for informational purposes, including, among other things, the stock price targets for FTD common stock in recently published, publicly available Wall Street research analysts' reports, which indicated an average consensus target price of $42.00, as compared to the share price of $29.89 as of July 25, 2014.

Miscellaneous

        This summary of the analyses is not a complete description of Moelis' opinion or the analyses underlying, and factors considered in connection with, Moelis' opinion. The preparation of a fairness opinion is a complex analytical process and is not necessarily susceptible to partial analysis or summary description. Selecting portions of the analyses or summary set forth above, without considering the analyses as a whole, could create an incomplete view of the processes underlying Moelis' opinion. In arriving at its fairness determination, Moelis considered the results of all of its analyses and did not attribute any particular weight to any factor or analysis. Rather, Moelis made its fairness determination on the basis of its experience and professional judgment after considering the results of all of its analyses.

        No company or transaction used in the analyses described above is identical to Provide Commerce, FTD or the transaction. In addition, such analyses do not purport to be appraisals, nor do they necessarily reflect the prices at which businesses or securities actually may be sold. Analyses based upon forecasts of future results are not necessarily indicative of actual future results, which may be significantly more or less favorable than suggested by such analyses. Because the analyses described above are inherently subject to uncertainty, being based upon numerous factors or events beyond the control of the parties or their respective advisors, neither FTD, nor Moelis or any other person assumes responsibility if future results are materially different from those forecast.

        The consideration was determined through arms' length negotiations between Provide Commerce and FTD and was approved by the FTD board of directors. Moelis did not recommend any specific consideration to FTD or the FTD board, or that any specific amount or type of consideration constituted the only appropriate consideration for the transaction.

        Moelis acted as financial advisor to FTD in connection with the transaction and will receive a fee of $6 million for its services, $1 million of which became payable in connection with the delivery of its opinion, regardless of the conclusion reached therein, and the remainder of which is contingent upon completion of the transaction. In addition, FTD has agreed to indemnify Moelis for certain liabilities under the federal securities laws, arising out of its engagement.

        Moelis' affiliates, employees, officers and partners may at any time own securities (long or short) of FTD and LIC. Moelis provided investment banking and other services to FTD and to an affiliate of LIC unrelated to the transaction and has received compensation for such services, and in the future may provide and receive compensation for such services to FTD and LIC. In the past two years prior to the date of the opinion, Moelis acted as, among other things, financial advisor (1) to United Online in connection with the separation of FTD, and (2) to affiliates of LIC in connection with a potential sale of the remaining stake of such affiliate to LIC.

        The FTD board of directors selected Moelis as its financial advisor in connection with the transaction because Moelis has substantial experience in similar transactions and familiarity with FTD. Moelis is regularly engaged in the valuation of businesses and their securities in connection with mergers and acquisitions, strategic transactions, corporate restructurings, and valuations for corporate and other purposes.

61


Table of Contents


Certain Financial Projections

        Neither FTD nor Provide Commerce makes public any projections for its future financial performance, earnings or other prospective financial information, other than limited short-term guidance regarding FTD's then current annual revenues, adjusted EBITDA, net income and capital expenditures. FTD and Provide Commerce do prepare projections for their then current fiscal year for internal purposes, such as budgeting and other management decisions, and in the case of FTD to provide to its lenders. The financial projections for Provide Commerce summarized below were provided to Moelis, FTD's financial advisor. As standalone projections for Provide Commerce, these projections exclude the impact of expected synergies resulting from the combination of the FTD and Provide Commerce businesses.

        The financial projections are based on a variety of estimates and assumptions regarding Provide Commerce's business, industry performance, general business, economic, market and financial conditions and other matters, all of which are difficult to predict and many of which are beyond FTD's and Provide Commerce's control. Economic and business environments can and do change quickly, which adds a significant level of uncertainty as to whether the results portrayed in the financial projections will be achieved. In particular, these financial projections were based on numerous assumptions that may now be outdated. Accordingly, there can be no assurance that the assumptions made in preparing the projections will prove accurate. If the assumptions do not prove accurate, the projections will not be accurate. You should not regard the inclusion of these projections in this proxy statement as an indication that FTD, Provide Commerce or any of their respective affiliates or representatives considered or consider the projections to be necessarily predictive of actual future events, and you should not rely on the projections as such. It is expected that there will be differences between actual and projected results, and actual results may be materially greater or less than those contained in the projections. It is highly likely that the contribution of Provide Commerce's business to the consolidated results of FTD will be different from FTD's or Provide Commerce's performance on a standalone basis. None of FTD, Provide Commerce or any of their respective affiliates or representatives has made or makes any representations to any person regarding the ultimate performance of FTD or Provide Commerce compared to the information contained in the projections.

        The financial projections were not prepared for use in this proxy statement or with a view toward public disclosure. These projections also were not prepared in accordance with GAAP, the published guidelines of the SEC regarding projections and the use of non-GAAP measures, or the guidelines established by the American Institute of Certified Public Accountants for preparation and presentation of prospective financial information. Neither FTD's independent registered public accounting firm nor Provide Commerce's independent auditors, nor any other independent accountants, have compiled, examined or performed any procedures with respect to the financial projections set forth below, nor have they expressed any opinion or any other form of assurance on such information or its achievability and assume no responsibility for, and disclaim any association with, the prospective financial information. Furthermore, the financial projections do not take into account any circumstances or events occurring after the date of their preparation and neither FTD nor Provide Commerce intend to update these financial projections.

        Provide Commerce's management initially prepared the financial projections regarding its anticipated future operating results. Those financial projections were adjusted downward based on various discussions between the management teams of Provide Commerce and FTD based on risks and uncertainties associated with the Provide Commerce business, including the developing brands, and the adjusted financial projections are summarized below. In these selected financial projections, we present Provide Commerce adjusted EBITDA, which was calculated in a manner consistent with FTD's adjusted EBITDA metric (defined as net income before net interest expense, provision (benefit) for income tax expense, depreciation, amortization, stock-based compensation, transaction-related costs, litigation and dispute settlement charges or gains, restructuring and other exit costs, and impairment of

62


Table of Contents

goodwill, intangible assets and long-lived assets) and further adjusted to reflect the exclusion of a negative one-time $7.6 million impact of weather issues on Provide Commerce's business in the first quarter of 2014. Adjusted EBITDA is not determined in accordance with GAAP and should be considered in addition to, not as a substitute for or superior to, financial measures determined in accordance with GAAP. FTD and Provide Commerce management believe that because adjusted EBITDA excludes (1) certain non-cash expenses (such as depreciation, amortization, and stock-based compensation) and (2) expenses that are not reflective of core operations, this measure provides investors with additional useful information to measure financial performance, particularly with respect to changes in performance from period to period. For these reasons, FTD and Provide Commerce management use adjusted EBITDA to measure performance.

        The following summary of the projections are subject to substantial risks and uncertainties that could cause actual results to differ materially from the projected results. All projections contained in this proxy statement are forward-looking statements, and these and other forward-looking statements are expressly qualified in their entirety by the risks and other factors described or referred to in the sections entitled "Special Note Concerning Forward-Looking Statements" and "Risk Factors" beginning on pages 24 and 26, respectively.

Provide Commerce Financial Projections

        The following amounts are in thousands:

 
  Fiscal Year Ending December 31,  
 
  2014   2015   2016   2017   2018   2019  

Revenue

  $ 658,552   $ 723,056   $ 778,834   $ 852,930   $ 916,666   $ 975,264  

Adjusted EBITDA

  $ 30,874   $ 48,477   $ 55,972   $ 66,348   $ 78,582   $ 91,479  


Interests of Certain Persons in the Transaction

        Except as described below, none of our directors or executive officers have any interests in the transaction that may be different from, or in addition to, the interests of FTD's stockholders generally. The FTD board of directors was aware of the interests described below and considered them, among other matters, in evaluating the transaction, approving the stock purchase agreement and the investor rights agreement and recommending that FTD stockholders vote in favor of the issuance of the FTD shares to LIC in accordance with the terms of the stock purchase agreement.

        In connection with FTD's entry into the stock purchase agreement, on July 28, 2014, FTD entered into the new employment agreements with its current President and Chief Executive Officer, Robert S. Apatoff, Executive Vice President and Chief Financial Officer, Becky A. Sheehan, and Executive Vice President, General Counsel and Secretary, Scott D. Levin. Each new employment agreement amends and restates in its entirety each executive's prior employment agreement.

        The new employment agreements will be effective on the date of the closing of the transaction, with a term expiring on December 31, 2019. If the transaction is not completed, the new employment agreements will be deemed null and void, will terminate effective as of the termination of the stock purchase agreement and the prior employment agreements will continue in full force and effect.

        Pursuant to the new employment agreements, immediately upon their effectiveness, Mr. Apatoff's, Ms. Sheehan's and Mr. Levin's then-current annual base salaries will be increased by $100,000, $50,000 and $50,000, respectively, to $830,000, $488,000 and $356,000, respectively. In addition, the new employment agreements provide that each of Mr. Apatoff, Ms. Sheehan and Mr. Levin will remain eligible to participate in each of FTD's employee benefit plans that are generally available to all

63


Table of Contents

employees or senior executives and to participate in an annual bonus program with a target bonus set by the FTD board of directors in an amount of up to 100% of the executive's annual base salary. The annual bonus for any fiscal year may be increased to include any additional amounts approved by the FTD board.

        Each new employment agreement also provides for certain payments in connection with the termination of an executive's employment, as follows:

        The executive will also be entitled to any earned but unpaid bonus for the fiscal year preceding the executive's termination and a prorated bonus for the year of termination based on the actual level of performance goal attainment or, in the case of an involuntary termination occurring in connection with, or within 24 months (36 months with regard to the completion of the transaction) following, a change of control, based on the executive's target bonus for the year of termination. Finally, the executive will be entitled to continued medical and dental coverage provided by FTD for a period of 12 months following the date of termination.

        If an executive's employment is terminated due to the executive's death or disability, then the executive will receive an additional 12 months of vesting credit under the executive's outstanding equity awards, applied as if such awards vested in equal monthly increments over the vesting period.

        Under the new employment agreements, if any payment or benefit received by an executive would be subject to the excise tax imposed by Section 4999 of the Internal Revenue Code of 1986, as amended (the "Code"), then the payment or benefit will be subject to reduction to the extent necessary to assure that the executive receives only the greater of (1) the amount of those payments and benefits which would not constitute a parachute payment under Section 280G of the Code or (2) the amount which yields the executive the greatest after-tax amount of benefits after taking into account any excise tax.

        The accelerated vesting provisions described above will apply to all of an executive's equity awards outstanding on the effective date of the employment agreements and all future-granted equity awards (in each case except to the extent that the applicable award agreement provides for more favorable treatment).

        Each of Mr. Apatoff, Ms. Sheehan and Mr. Levin have agreed to a 12-month non-competition agreement and to provide FTD with a standard release of claims.

64


Table of Contents

        For purposes of the employment agreements, the following terms have the definitions described below:

65


Table of Contents

        Upon the new employment agreements' effectiveness, Mr. Apatoff, Ms. Sheehan and Mr. Levin will be granted an award of restricted stock units with a value of $730,000, $438,000 and $306,000, respectively, which awards will vest at the rate of one-third on each of the first three anniversaries of the grant date. The restricted stock unit awards will be granted pursuant to FTD's form of Restricted Stock Unit Issuance Agreement for Officers with Employment Agreements previously filed with the SEC.

        In connection with its consideration of and recommendation that the FTD board of directors approve the new employment agreements, the compensation committee of the FTD board engaged and received and reviewed advice from independent legal counsel.


FTD Board of Directors Following the Transaction

        In connection with the closing of the transaction, the FTD board of directors will be increased from seven to eleven directors, with LIC selecting four new directors for appointment to the board. In addition, at the closing of the transaction, we will be required to appoint one of those directors to each of the Nominating and Corporate Governance Committee, Audit Committee and Compensation Committee of the FTD board. Such appointments will be subject in all respects to the terms and conditions contained in the investor rights agreement. Two such directors will be appointed to the 2016 class of the FTD board, with terms expiring at our 2016 annual meeting, and one such director will be appointed to each of the 2015 and 2017 classes, with terms expiring at our 2015 and 2017 annual meetings, respectively.

        LIC has designated Christopher W. Shean and Robin S. Pringle as the first two individuals for appointment to the FTD board of directors. It is not presently known whether Mr. Shean or Ms. Pringle will be appointed to a committee of FTD's board or the class to which they would be appointed. See "The Investor Rights Agreement—LIC Representation on the FTD Board of Directors" beginning on page 88 for a further discussion of LIC's rights and FTD's obligations with respect to LIC's nominees for appointment or election to the FTD board.

        Mr. Shean is the Chief Financial Officer and a Senior Vice President at LIC. In this capacity, he serves as LIC's principal financial and accounting officer. Prior to being named the Chief Financial Officer in November 2011, Mr. Shean served as LIC's Controller for eleven years. Mr. Shean also serves as the Chief Financial Officer and a Senior Vice President of Liberty Media Corporation (together with LIC, "Liberty"). Prior to joining Liberty, Mr. Shean was an audit partner with KPMG focusing mainly on clients operating in the media and entertainment industry.

        Mr. Shean serves on the board of directors of TripAdvisor, Inc., and the Atlanta Braves. Mr. Shean also serves on the advisory committee for the Pamplin School of Business at Virginia Tech. Mr. Shean received a BS degree in accounting from Virginia Tech in 1987.

        Ms. Pringle has been Vice President, Corporate Development of LIC since January 2013. Ms. Pringle served as a Director, Corporate Development of LIC from January 2010 to December 2012, and as a Manager, Corporate Development from July 2008 to December 2010. Ms. Pringle also serves as the Vice President, Corporate Development of Liberty Media Corporation. Prior to joining Liberty, she worked in the Strategic Planning and Business Development group at Del Monte Foods and in investment banking at Thomas Weisel Partners. She served as a director of Sirius XM Radio Inc. from January 18, 2013 to September 9, 2013. Ms. Pringle has a MBA from Kellogg School of Management and a bachelor's degree in public policy from Duke University.

66


Table of Contents

        It is expected that LIC will identify the remaining two individuals for appointment to the FTD board of directors by September 30, 2014.


Impact of the Stock Issuance on Existing FTD Stockholders; Effect of Transaction

        The stock issuance will dilute the ownership and voting interests of our existing stockholders. As of July 29, 2014, there were 18,948,447 shares of FTD common stock issued and outstanding. Assuming the approval of the stock issuance, consisting of 10,203,010 shares, and no other change to the number of shares of FTD common stock issued and outstanding as of July 29, 2014, LIC would own 35% of the post-closing issued and outstanding shares of FTD common stock. Therefore, the ownership and voting interests of our existing stockholders will be proportionately reduced.

        In addition, concurrent with the execution of the stock purchase agreement, the FTD board of directors resolved to waive Section 203 of the DGCL with respect to LIC and its affiliates, thereby exempting LIC and its affiliates from the restrictions on business combinations set forth in Section 203. The continued effectiveness of this waiver is a condition to closing of the transaction, and FTD is prohibited from rescinding this waiver under the terms of the investor rights agreement. Further, under the terms of the investor rights agreement, FTD will be prohibited from implementing a stockholder rights plan, unless the plan exempts certain actions by LIC in accordance with the terms of the investor rights agreement.


Material United States Federal Income Tax Consequences of the Transaction to FTD Stockholders

        Because existing FTD stockholders do not participate in the transaction, they will not recognize gain or loss in connection with the transaction with respect to their FTD common stock.


Accounting Treatment of the Transaction

        We prepare our financial statements in accordance with GAAP. Under GAAP, the transaction will be accounted for by applying the acquisition method with FTD treated as the acquirer.


Appraisal Rights

        None of FTD's stockholders will be entitled to exercise appraisal rights or to demand payment for his, her or its shares of FTD common stock in connection with the transaction.


Regulatory Approvals and Clearances

        Under the HSR Act, and the rules and regulations thereunder, the transaction may not be completed until required information and materials have been furnished to the DOJ and the FTC and certain waiting period requirements have expired or been terminated. On August 14, 2014, each of FTD, LIC and Provide Commerce filed a pre-merger notification and report form pursuant to the HSR Act with the DOJ and the FTC. On September 4, 2014, the DOJ and the FTC granted the parties' requests for early termination of the waiting period. At any time before the closing of the transaction, the DOJ, the FTC or others could take action under the antitrust laws with respect to the transaction, including seeking to enjoin the completion of the transaction or to require the divestiture of certain assets of FTD or Provide Commerce. There can be no assurance that a challenge to the transaction on antitrust grounds will not be made or, if such a challenge is made, that it would not be successful.


Federal Securities Law Consequences; Restrictions on Transfer

        If the stock issuance is approved, the FTD shares will be issued to a wholly owned subsidiary of LIC in a private placement transaction under Section 4(a)(2) of the Securities Act of 1933, as amended, and will be subject to certain restrictions on transfer.

67


Table of Contents

        In addition, the FTD shares will be subject to further restrictions on transfer and LIC will be entitled to certain registration rights as described in more detail in "The Investor Rights Agreement—Other General Standstill Provisions" and "—Registration Rights" on pages 82 and 87, respectively.


Financing the Transaction

        The following is a summary of selected material provisions of the commitment letter and the amended and restated credit agreement, including the credit agreement amendment. The rights and obligations of the parties are governed by the express terms and conditions of these agreements and not by this summary or any other information in this proxy statement. This discussion is qualified in its entirety by reference to the complete text of the commitment letter and the credit agreement amendment, and the amended and restated credit agreement, which FTD has filed with the SEC. See "Where You Can Find More Information" on page 123. We urge all stockholders to read these agreements carefully and in their entirety before making any decisions regarding the stock issuance as partial consideration in connection with the proposed transaction.

        Concurrent with the execution of the stock purchase agreement, FTD entered into the commitment letter. The commitment letter provided, on the terms and subject to the conditions set forth in the commitment letter, for the term loan to be added to the 2013 credit agreement. The commitment letter further provided the conditions for the acquisition advance under the 2013 credit agreement in connection with the closing of the transaction, which advance would be used to finance the cash portion of the purchase price.

        On September 19, 2014, FTD entered into to the credit agreement amendment with the lenders. The credit agreement amendment amended and restated the 2013 credit agreement in its entirety. Among other things, the amended and restated credit agreement provides for the term loan, in an aggregate principal amount of $200 million, and the conditions for the acquisition advance. The interest rate for borrowings under the amended and restated credit agreement is LIBOR plus a margin ranging from 1.50% per annum to 2.50% per annum, or a base rate plus a margin ranging from 0.50% per annum to 1.50% per annum, calculated according to the net leverage ratio of FTD Companies, Inc. and its subsidiaries.

        The proceeds of the term loan were used to repay a portion of outstanding revolving loans under the amended and restated credit agreement in advance of the closing of the transaction to ensure sufficient revolving availability under the amended and restated credit agreement to make the acquisition advance. FTD expects the acquisition advance, together with cash balances, to be sufficient to provide the financing necessary to pay the cash portion of the purchase price under the stock purchase agreement.

        The amended and restated credit agreement provides limited conditions to the commitment of the lenders to advance the acquisition advance, including, without limitation, (1) the contemporaneous closing of the transaction on the terms and conditions set forth in the stock purchase agreement, (2) the absence of a material adverse effect with respect to Provide Commerce and its domestic subsidiaries since the date of the stock purchase agreement, (3) the joinder of Provide Commerce and its domestic subsidiaries as guarantors under the amended and restated credit agreement, and (4) the administrative agent having a perfected lien and security interest on the assets of Provide Commerce and its domestic subsidiaries as described in the amended and restated credit agreement.

        The amended and restated credit agreement contains the following customary financial covenants: (1) maintenance of a maximum net leverage ratio (total funded indebtedness (with certain exclusions) to EBITDA) of 3.75 to 1.0, with certain step-downs and the ability to increase the ratio for up to four quarters following future material acquisitions, and (2) maintenance of a minimum consolidated fixed charge coverage ratio ((a) EBITDA less taxes paid, less certain capital expenditures, less dividends paid, less certain subordinated debt prepayments, to (b) cash interest expenses, plus scheduled principal

68


Table of Contents

payments) of at least 1.25 to 1.0. In connection with the transaction and the term loan, the amended and restated credit agreement eliminates the prior minimum interest coverage ratio and adjusts certain affirmative and negative covenants, as compared to the 2013 credit agreement, to account for the combined company following the transaction.

        Repayment of the term loan, the acquisition advance and all other revolving loans under the amended and restated credit agreement must be made on or prior to September 19, 2019. In addition, the term loan is subject to quarterly amortization payments in an amount equal to 2.5% of the original principal amount of the term loan and customary mandatory prepayments with (1) proceeds of assets sales and recovery events, (2) proceeds of certain debt issuances, (3) proceeds of certain extraordinary receipts and (4) a portion of excess cash flow (EBITDA (giving effect to working capital and other specified adjustments) less certain payments for interest, principal, taxes, capital expenditures, acquisitions, investments, equity related compensation and other specified cash expenses or losses) for any fiscal year in which maximum net leverage ratio exceeds 3.50 to 1.0.

69


Table of Contents


THE STOCK PURCHASE AGREEMENT

        The following is a summary of the material provisions of the stock purchase agreement. The following description of the stock purchase agreement is subject to, and qualified in its entirety by reference to, the stock purchase agreement, which is attached to this proxy statement as Annex A and is incorporated by reference into this document. This summary may not contain all of the information about the stock purchase agreement that may be important to you. You are urged to read the stock purchase agreement carefully and in its entirety, as it is the legal document governing the transaction.


Terms of the Transaction

        Each of the FTD, LIC and Provide Commerce boards of directors has approved the stock purchase agreement, which provides for the acquisition of all of the issued and outstanding common stock of Provide Commerce by a wholly owned subsidiary of FTD from Liberty Interactive, LLC, a Delaware limited liability company and wholly owned subsidiary of LIC. Each share of Provide Commerce common stock has a par value of $0.001. The transaction constitutes a taxable purchase of Provide Commerce's issued and outstanding common stock for U.S. federal income tax purposes.

        In consideration of Provide Commerce's common stock, FTD will pay to LIC $121,460,980 (subject to adjustment as described below) and deliver to Liberty Interactive, LLC 10,203,010 shares of FTD common stock, which shares are subject to the terms and restrictions set forth in the investor rights agreement (attached as Annex B). The stock portion of the purchase price has a total value of $308,539,020, based on the volume weighted average closing price of FTD common stock for the ten trading days ended July 28, 2014.

        The cash portion of the purchase price to be paid at the closing of the transaction will be adjusted to account for estimated changes in working capital at the closing of the transaction compared to the average monthly working capital for the year prior to the date of the stock purchase agreement, certain indebtedness of Provide Commerce, certain incurred but unpaid transaction expenses and cash and cash equivalents of Provide Commerce. Following the closing of the transaction, the cash portion of the purchase price will be adjusted for changes in Provide Commerce's working capital and cash position as of the date of closing of the transaction. If the sum of the closing working capital and all cash and cash equivalents of Provide Commerce as of the closing of the transaction is greater than the sum of such amounts as estimated prior to the closing of the transaction, FTD will pay LIC the difference. If such amounts are less than the sum so estimated prior to the closing of the transaction, LIC will pay FTD the difference.


Representations and Warranties

        The representations and warranties described below are solely for the benefit of the parties to the stock purchase agreement and may represent an allocation of contractual risk between FTD and LIC rather than establishing matters as facts, and may be subject to standards of materiality that differ from standards relevant to investors. You should not rely on the representations or warranties or any description thereof as characterizations of the actual state of facts or conditions of FTD, LIC, Provide Commerce or any of their respective subsidiaries or affiliates. Moreover, information concerning the subject matter of the representations and warranties may change after the date of the stock purchase agreement, which subsequent information may or may not be fully reflected in public disclosures by FTD or LIC. The representations and warranties and other provisions of the stock purchase agreement should not be read alone, but instead should be read only in conjunction with the information provided elsewhere in this proxy statement and in the documents incorporated by reference into this proxy statement. For more information please see "Where You Can Find More Information" on page 123.

70


Table of Contents


Representations and Warranties Made by LIC and Provide Commerce

        The stock purchase agreement contains customary representations and warranties of LIC and Provide Commerce relating to the business of Provide Commerce and LIC's ownership of Provide Commerce. LIC's and Provide Commerce's representations and warranties survive the closing of the transaction as detailed in "Representation and Warranty Survival" on page 79.

        LIC and Provide Commerce have made representations and warranties regarding, among other things:


Representations and Warranties Made by FTD

        The stock purchase agreement contains customary representations and warranties of FTD relating to FTD's business and certain matters related to the approval of the transaction and the financing transactions contemplated by the commitment letter. FTD's representations and warranties survive the closing of the transaction as detailed in "Representation and Warranty Survival" on page 79.

        FTD has made representations and warranties regarding, among other things:

71


Table of Contents


Interim Covenants

        Provide Commerce has agreed to, and LIC has agreed to cause Provide Commerce to, abide by certain customary actions relating to Provide Commerce's business operations prior to the closing. These interim covenants include conducting Provide Commerce's operations in the ordinary course of business consistent with past practice, and using reasonable best efforts to preserve Provide Commerce's business operations, organization (including key employees), goodwill, business relationships, maintaining assets and property and complying in all material respects with all applicable laws.

        Additionally, LIC and Provide Commerce agreed to certain customary restrictions with respect to Provide Commerce, which generally have the effect of preserving the value of Provide Commerce until the closing.

72


Table of Contents

        Similarly, prior to the closing of the transaction, FTD has agreed to conduct its own operations in the ordinary course consistent with past practice, and to use reasonable best efforts to preserve its business operations, organization (including officers and employees), goodwill and its business relationships and to comply in all material respects with all applicable laws. FTD also agreed to refrain from taking certain actions prior to the closing, including, among other things, amending its governing documents, issuing equity securities other than in connection with certain employee benefits and the stock issuance, disposing of material assets outside of the ordinary course of business, and incurring debt outside the ordinary course of business.


Cooperation

        FTD, LIC and Provide Commerce agreed to cooperate with each other in connection with the preparation of the proxy statement and in determining whether any consents, approvals or waivers are required to consummate the transaction, and if so, to seek to obtain such consents, approvals or waivers.


Proxy Statement

        FTD is required to prepare and file this proxy statement as promptly as practicable following the date of the stock purchase agreement, and to use its reasonable best efforts to have this proxy statement cleared by the SEC as promptly as reasonable practicable after such filing.

        FTD is required to include in this proxy statement the recommendation of the FTD board of directors to the FTD stockholders that the approval of the stock issuance by the FTD stockholders is advisable, fair to and in the best interests of FTD's stockholders, subject to certain exceptions related to the fiduciary duties of the FTD board.


The Special Meeting of FTD Stockholders

        FTD is required to call and hold the special meeting as promptly as reasonably practicable following the mailing of this proxy statement.

        FTD is further required to take all reasonable lawful action to solicit stockholder approval of the stock issuance, subject to certain exceptions related to the fiduciary duties of the FTD board of directors.


Alternative Proposals, Superior Proposals and Non-Solicitation

        For the purposes of the stock purchase agreement, an "acquisition proposal" means (1) any inquiry, proposal or offer for or with respect to a merger, consolidation, business combination, recapitalization, binding share exchange, liquidation, dissolution, joint venture or other similar transaction involving FTD; (2) any inquiry, proposal or offer, directly or indirectly for, equity interests of FTD representing more than 15% of the outstanding common stock of FTD or more than 15% of the voting power of FTD; or (3) any inquiry, proposal or offer to acquire, directly or indirectly, assets or businesses of FTD, including pursuant to a joint venture, representing more than 15% of the consolidated assets, revenues or net income of FTD.

        For the purposes of the stock purchase agreement, a "superior proposal" means a bona fide, unsolicited written acquisition proposal (1) that if consummated would result in a third party acquiring, directly or indirectly, more than 80% of the outstanding FTD common stock or substantially all the assets of FTD; (2) that the FTD board of directors determines in good faith, after consultation with its outside legal counsel and its outside financial advisor, is reasonably capable of being completed, taking into account all financial, legal, regulatory, timing, the likelihood of completing such acquisition proposal as compared to the transaction contemplated hereby and other aspects of such proposal, including all conditions contained therein and the person making such acquisition proposal; (3) that the FTD board determines in good faith, after consultation with its outside legal counsel and its outside

73


Table of Contents

financial advisor (taking into account any changes to the stock purchase agreement proposed by LIC in response to such acquisition proposal, and all financial, legal, regulatory, timing, the likelihood of completing such acquisition proposal as compared to the transaction and other aspects of such acquisition proposal, including all conditions contained therein and the person making such proposal, and the stock purchase agreement), is more favorable to our stockholders from a financial point of view than the transaction; and (4) the definitive documentation in respect of which does not contain any due diligence or financing condition.

        Prior to the closing, the stock purchase agreement prohibits FTD from (or permitting its subsidiaries or any of its or their directors, officers or representatives from), directly or indirectly, taking any action to (1) solicit, initiate or encourage any acquisition proposal, (2) participate in discussions or negotiations with, or furnish any non-public information to, any person with respect to an acquisition proposal, (3) withhold, withdraw, qualify or modify (or publicly propose to take such action) the FTD board of directors' recommendation in favor of the stock issuance in a manner adverse to LIC, (4) approve, recommend or take any public position other than "against" any acquisition proposal, or (5) enter into any agreement or letter of intent with respect to any acquisition proposal.

        Notwithstanding the prohibitions discussed in the foregoing paragraph, FTD is permitted to:

        FTD is required to notify LIC of any acquisition proposal and provide certain information related thereto.


Recommendation Changes

        FTD is not permitted to withdraw or modify, or publicly propose to withdraw or modify, in a manner adverse to LIC, the FTD board of directors' recommendation in favor of the stock issuance, or to approve, recommend or take a public position with respect to, or publicly propose to approve, recommend or take a public position with respect to, any acquisition proposal.

        Notwithstanding the prohibition in the foregoing paragraph, if, upon the receipt of a superior proposal, the FTD board of directors determines that the failure to make an adverse recommendation regarding the approval of the stock issuance would violate the FTD board's fiduciary duties, we may make such recommendation change. This is referred to as a "superior proposal recommendation change."

        We may only make a superior proposal recommendation change after providing prior written notice to LIC, and after negotiating with LIC to make adjustments to the terms of and conditions of the stock purchase agreement as would enable the FTD board of directors to determine that failing to make a superior proposal recommendation change would not violate the FTD board's fiduciary duties.

74


Table of Contents

The negotiation period is five business days. If at the end of such period the acquisition proposal is modified, we would then enter a second negotiation period with LIC, with a duration of three business days. If at the end of such applicable negotiation period or periods the FTD board has again made the determination discussed above, then we may make a superior proposal recommendation change.

        Concurrently with making a superior proposal recommendation change, FTD would be permitted to terminate the stock purchase agreement and enter into a definitive agreement with respect to the superior proposal.

        For the purposes of the stock purchase agreement, an "intervening event" means a material event or material change in circumstances occurring or arising after July 30, 2014 with respect to FTD that (1) is materially and disproportionately more favorable to the recurring financial condition and results of operations of FTD relative to the other businesses operating in the same industry and (2) was neither known to the FTD board of directors or our Chief Executive Officer or our Chief Financial Officer, nor reasonably foreseeable as of or prior to July 30, 2014, subject to certain exceptions set forth in the stock purchase agreement.

        Notwithstanding the prohibition in the first paragraph of this "Recommendation Changes" subsection, if, upon the occurrence of an intervening event, the FTD board of directors determines that the failure to make an adverse recommendation regarding the approval of the stock issuance would violate the FTD board's fiduciary duties, we may make such recommendation change. This is referred to as an "intervening event recommendation change".

        We may only make an intervening event recommendation change after providing prior written notice to LIC, and after negotiating with LIC to make adjustments to the terms of and conditions of the stock purchase agreement as would enable the FTD board to determine that failing to make an intervening event recommendation change would not violate the FTD board's fiduciary duties. The negotiation period is five business days. If at the end of such negotiation period the FTD board has again made the determination discussed above, then we may make an intervening event recommendation change.

        FTD does not have a right to terminate the stock purchase agreement based solely on the occurrence of an intervening event.

        FTD is required to notify LIC of any intervening event and provide certain information related thereto.


Actions to Complete the Transaction

        FTD, LIC and Provide Commerce are obligated to use their reasonable best efforts to take, or cause to be taken, all appropriate action, and do, or cause to be done, all things necessary, proper or advisable under any applicable law to complete and make effective the transaction as promptly as reasonably practicable.


Regulatory Approvals

        FTD, LIC and Provide Commerce are obligated to use their reasonable best efforts to obtain from governmental authorities any governmental authorizations required to be obtained, including taking various actions with respect to the HSR Act and other laws and regulations. On August 14, 2014, each of FTD, LIC and Provide Commerce filed a pre-merger notification and report form pursuant to the HSR Act with the DOJ and the FTC. On September 4, 2014, the DOJ and the FTC granted the parties' requests for early termination of the waiting period.

75


Table of Contents

        With respect to governmental approvals, none of the parties to the stock purchase agreement are required to (1) to pay any amounts (other than the payment of filing fees and expenses and fees of counsel), (2) hold separate (including by trust or otherwise) or divest any of their respective businesses, product lines or assets, (3) agree to any limitation on the operation or conduct of FTD's or Provide Commerce's respective businesses or (4) to waive any of the conditions to the closing of the transaction set forth in the stock purchase agreement.


Employee Benefit Matters

        The stock purchase agreement contains several covenants requiring certain actions by FTD or Provide Commerce with respect to the employee benefits arrangements of Provide Commerce employees. Included among these covenants, FTD is required for a period of 12 months following the closing to (1) provide each employee of Provide Commerce employed immediately prior to the closing with employee benefit arrangements that are at least as favorable, in the aggregate, as the employee benefit arrangements provided to other similarly situated employees of FTD, and (2) not reduce the base salary of such employees. FTD also agreed to pay annual bonuses for calendar year 2014 to such employees consistent with the terms of Provide Commerce's bonus policy.


Financing

        FTD is required to take all actions necessary, proper or advisable to consummate and obtain the debt financing on the terms and conditions set forth in the commitment letter, and to use its reasonable best efforts to cause the lenders to fund such debt financing. FTD may amend or replace the commitment letter, subject to certain conditions. If any portion of the debt financing becomes unavailable, FTD is obligated to use its reasonable best efforts to arrange and obtain alternative financing. On September 19, 2014, FTD entered into the credit agreement amendment, which provides for the term loan and the acquisition advance under the amended and restated credit agreement.


Investor Directors

        At the closing, FTD is required to appoint four designees of LIC to the FTD board of directors. In addition, at the closing of the transaction, we will be required to appoint one of those directors to each of the Nominating and Corporate Governance Committee, Audit Committee and Compensation Committee of the FTD board. Such appointments will be subject in all respects to the terms and conditions contained in the investor rights agreement. Two such directors will be appointed to the 2016 class of the FTD board, with terms expiring at our 2016 annual meeting, and one such director will be appointed to each of the 2015 and 2017 classes, with terms expiring at our 2015 and 2017 annual meetings, respectively.


RedEnvelope

        Provide Commerce will, prior to the closing, distribute all shares of RedEnvelope to LIC or any of LIC's subsidiaries (other than Provide Commerce or any of Provide Commerce's subsidiaries) and otherwise take the actions set forth on the Provide Commerce disclosure schedule. LIC and FTD will negotiate in good faith the schedules setting forth the services, and the cost and terms and conditions of such services, to be provided to RedEnvelope by Provide Commerce pursuant to a services agreement, provided that agreement on such matters and the execution and delivery of the services agreement will not be conditions of the parties to closing.

76


Table of Contents


Closing Conditions

        Each party's respective obligations to complete the transaction are subject to the fulfillment or, in certain cases, waiver of certain conditions, including:

        In addition, FTD's obligations to complete the transaction are subject to the fulfillment or, in certain cases, waiver of certain conditions, including:

        In addition, LIC's and Provide Commerce's obligations to complete the transaction are subject to the fulfillment or, in certain cases, waiver of certain conditions, including:

77


Table of Contents


Termination

        The stock purchase agreement may be terminated, and the transaction contemplated by the stock purchase agreement may be abandoned, at any time prior to the closing of the transaction:


Termination Fees

        In the event (1) the stock purchase agreement is terminated by FTD or LIC pursuant to the closing of the transaction not being completed by the outside date, or because the FTD stockholder approval has not been obtained, (2) an acquisition proposal has been publicly announced prior to the occurrence of the applicable termination event in clause (1), and (3) within 12 months of termination

78


Table of Contents

FTD executes an agreement to complete the transaction, then FTD is obligated to pay LIC $10,750,000.

        In the event the stock purchase agreement is terminated by LIC pursuant to (1) FTD making a superior proposal recommendation change, (2) FTD failing to timely make a statement in opposition and recommend rejection to the FTD's stockholders of a tender or exchange offer of FTD's securities initiated by a third party, (3) FTD's breach of its non-solicitation covenants, or (4) FTD's failure to call, give notice of, convene and hold the special meeting, FTD is obligated to pay LIC $10,750,000.

        In the event the stock purchase agreement is terminated by FTD pursuant to FTD making a superior proposal recommendation change, subject to LIC's matching right, and entering into a superior proposal in respect thereof, FTD is obligated to pay LIC $12,900,000.

        In the event the stock purchase agreement is terminated by LIC pursuant to FTD making an intervening event recommendation change, subject to LIC's matching right, FTD is obligated to pay LIC $17,200,000.

        In the event the stock purchase agreement is terminated by FTD pursuant to a breach of Provide Commerce's covenant to timely provide FTD with certain audited and unaudited financial information, LIC is obligated to pay FTD $6,000,000.


Representation and Warranty Survival

        The representations and warranties contained in the stock purchase agreement will survive the closing through and including the 18-month anniversary of the closing date, except for certain customary "fundamental" representations, including those relating to capitalization and corporate governance matters, which will survive indefinitely, and except for certain representations of LIC and Provide Commerce in connection with employee benefit plans, environmental matters and taxes, which will survive until 90 days following the expiration of the applicable statute of limitations.


Indemnification by LIC

        Under the stock purchase agreement, LIC will indemnify FTD against losses arising from:


Indemnification by FTD

        Under the stock purchase agreement, FTD will indemnify LIC against losses arising from the failure of the representations or warranties of FTD relating to organization and qualification, subsidiaries, certificate of incorporation and bylaws, capitalization, authority and SEC filings and other reports, and from the breach of any covenant or other agreement made by FTD.

79


Table of Contents

        The amount for which FTD would pay LIC in respect of such indemnified losses is equal the sum of:


Exclusive Relief

        Following the closing of the transaction, except in the case of fraud and with respect to matters for which the remedy of specific performance, injunctive relief or other non-monetary equitable remedies are available, the sole and exclusive remedy of the parties with respect to any and all claims arising from any breach of the stock purchase agreement will be pursuant to the indemnification provisions.


Expenses and Fees

        All expenses incurred by the parties will be borne solely and entirely by (1) LIC, with respect to expenses incurred by LIC or Provide Commerce and (2) FTD, with respect to expenses incurred by FTD.


Governing Law

        The stock purchase agreement is governed by Delaware law.

80


Table of Contents


THE INVESTOR RIGHTS AGREEMENT

        The following is a summary of the material provisions of the investor rights agreement. The following description of the investor rights agreement is subject to, and qualified in its entirety by reference to, the investor rights agreement, the agreed form of which is attached to this proxy statement as Annex B and is incorporated by reference into this document. The investor rights agreement, when executed and delivered by the parties at the closing, will be in the form of the investor rights agreement attached hereto. This summary may not contain all of the information about the investor rights agreement that may be important to you. You are urged to read the agreed form of the investor rights agreement carefully and in its entirety, as it is the legal document governing LIC's rights with respect to the FTD shares, and LIC's rights as an FTD stockholder generally.


Ownership Cap

        After the closing of the transaction, LIC, including its affiliates and certain permitted transferees, is prohibited from acquiring beneficial ownership of FTD common stock if, following such acquisition, LIC's beneficial ownership of FTD common stock would exceed 37.5% of the number of shares of common stock outstanding before December 31, 2016 and 40% of the number of shares of common stock outstanding thereafter.

        LIC may acquire beneficial ownership of FTD common stock in excess of such maximum amount:


Permitted Tender Offer

        LIC may commence and accept for purchase and purchase shares of FTD common stock pursuant to a tender or exchange offer upon:

81


Table of Contents

        Such offer by LIC is referred to as a "permitted tender offer". A permitted tender offer must meet all of the following requirements:


Takeover Defense

        FTD may not amend, modify or rescind the resolution of the FTD board of directors that waives Section 203 of the DGCL as to LIC and its affiliates. FTD also may not implement a stockholder rights plan unless such plan by its terms exempts, or at the time of implementation FTD takes action to exempt, the acquisitions of FTD common stock by LIC pursuant to the terms of the investor rights agreement.


Other General Standstill Provisions

        Subject to certain exceptions, and unless specifically approved in writing by FTD, LIC will not take any of the following actions. All such restrictions will be in place for 18 months following the closing of the transaction, except for the restrictions set forth in the first bullet point below, which will be in place permanently, subject to the exceptions to the general cap on acquisitions.

82


Table of Contents

        In addition to the expiration of certain of the standstill rights at the conclusion of the 18 month period, the standstill rights (except for the restrictions set forth in the first bullet point above) will cease to apply upon any of the following:

83


Table of Contents


Notification Right

        So long as LIC's beneficial ownership of FTD common stock is at least 15%, FTD must give LIC 10 days' advance written notice prior to FTD's entry into any agreement regarding a change of control transaction for FTD or similar fundamental transaction.


Participation Rights

        After the closing of the transaction, if FTD sells or issues new securities pursuant to which the FTD receives in the aggregate (or would receive upon the exercise of any new security) greater than $1,000,000 in gross proceeds, LIC will have a right to purchase from the FTD a certain amount of such new securities, as described below.

        The maximum amount of new securities which LIC may purchase pursuant to this participation right will be equal the difference between:

        New securities subject to this participation right include FTD common stock or other equity securities of FTD, whether authorized now or in the future, and rights, options or warrants to purchase such FTD common stock or other equity securities of FTD. However, this participation right does not apply to any of the following: (1) securities (including options or warrants) issued to employees, consultants, officers or directors of FTD pursuant to any stock option, stock purchase or stock bonus plan or other award, agreement or arrangement; (2) securities issued in a public offering pursuant to a registration under the Securities Act; (3) securities issued pursuant to any stock split, stock dividend or recapitalization of FTD; (4) securities issued pursuant to the conversion, exercise or exchange of securities outstanding at the closing; (5) securities issued to LIC upon exercise of this participation right; and (6) in the case of any right, option, warrant or other securities convertible into, or exercisable or exchangeable for, any other securities that are excluded from the definition of new securities pursuant to clauses (1) through (5) above, any other securities issued upon the exercise, exchange or conversion of any such right, option, warrant or other convertible, exchangeable or exercisable security.

84


Table of Contents

        LIC will not have any such participation rights if, at any time, its actual voting interest in FTD (calculated by dividing the number of shares of FTD common stock beneficially owned by LIC that would be entitled to vote at a meeting of FTD's stockholders, over the total number of shares of FTD common stock that would be entitled to vote at such meeting but excluding any shares issued pursuant to a top-up issuance (as described below)) falls below 10%.

        FTD may issue or sell FTD common stock in an amount of up to 19.9% of the outstanding FTD common stock (before giving effect to such issuance) to a single third person concurrently with the entry by FTD and such third person into a definitive agreement for the change of control transaction, and LIC shall not have any participation right under the investor rights agreement in respect of such issuance. This issuance is referred to as a "top-up issuance." FTD may only effect one top-up issuance during the term of the investor rights agreement.

        Any top-up issuance must meet the following criteria:

85


Table of Contents


Quorum Requirement

        So long as LIC and its affiliates collectively beneficially own at least 5% of the outstanding shares of FTD common stock, LIC will be present, in person or by proxy, at all meetings of FTD's stockholders so that all shares of FTD common stock held by LIC and its affiliates may be counted for purposes of determining a quorum at such meetings.


Transfer Restrictions

        Except as otherwise permitted by the investor rights agreement, LIC may not transfer any of the FTD shares until 18 months after the closing of the transaction. However, LIC may transfer its shares to any affiliate of LIC (all of which affiliates are subject to the same restrictions as LIC under the investor rights agreement), in connection with a stock distribution transaction (including a spin-off, split-off or related action involving an entity holding LIC's interest in FTD), as part of a change of control of FTD, and in certain other cases as discussed below.

        All transfers of the FTD shares by LIC must be made in accordance with applicable law. Subject to certain exceptions, such as a public offer, a sale on the open market or in connection with a change of control transaction, no transfers of the FTD shares by LIC may be to a prohibited transferee. For purposes of the investor rights agreement, a "prohibited transferee" is any party engaged in the business of providing floral products and services to consumers, retail florists or other retail locations offering floral products anywhere in the world and such floral products and services account for greater than 20% of such party's consolidated revenues.

        After the expiration of the initial 18-month period, LIC may transfer the FTD shares (except in a block transfer), subject to certain restrictions. If the transfer is not part of a public offer or a block transfer as discussed in the next subsection, then any transferee would be required to represent to LIC and FTD that it would not beneficially own, after giving effect to the transfer, greater than 15% of the FTD common stock. If the transfer is (1) pursuant to a sale directly into the market pursuant to a registration statement or (2) in a sale on a securities exchange pursuant to Rule 144, then FTD would have a right of first refusal with respect to such transfer, and may exercise such right at a price per share equal to the five-day volume weighted average price of FTD common stock prior to the delivery of the notice of LIC's intent to sell, subject to certain restrictions and conditions.

        LIC may not make a block transfer of the shares until the third anniversary of the closing of the transaction. After that period, LIC may transfer the FTD shares, in a single transaction, to a third party who after the transfer will own greater than 15% of the FTD common stock, if after such transfer LIC owns less than 5% of the FTD common stock. Such third party would be required to become a party to the investor rights agreement, assuming all rights and obligations of LIC, including the overall stock cap, provided that FTD would have the option to require that such third party would be entitled to designate one fewer director to the FTD board than would LIC, based on any applicable ownership percentage.

        Prior to any such block transfer, FTD would have a right of first offer to repurchase the applicable FTD shares, subject to certain restrictions and conditions.

        The transfer restrictions under the investor rights agreement do not prohibit LIC from pledging the FTD shares or creating a security interest in them, or transferring them pursuant to a related default, event of default or as a result of any foreclosure under such pledge or security agreement, if

86


Table of Contents

(1) the pledge or security interest is entered into in connection with a bona fide financing transaction or (after 18 months) a hedging transaction, (2) the pledgee or the secured party is a financial institution that holds pledged shares in the normal course of its business, (3) during the initial 18-month period, the number of shares of FTD common stock that may be pledged or subject to a security interest is capped at 3,401,004 (subject to adjustment as provided in the stock purchase agreement) and (4) after the initial 18-month period, the number of shares of FTD common stock that may be pledged or subject to a security interest is capped at 5,101,505 (subject to adjustment as provided in the stock purchase agreement).

        The transfer restrictions under the investor rights agreement do not prohibit LIC from entering into stock lending transactions if (1) during the initial 18-month period, the number of shares of FTD common stock subject to such transactions is capped at 3,401,004 (subject to adjustment as provided in the stock purchase agreement), (2) after the initial 18-month period, the number of shares of FTD common stock subject to such transactions is capped at 5,101,505 (subject to adjustment as provided in the stock purchase agreement), (3) the terms of the transaction include provisions that provide LIC with the right to vote the lent shares at all FTD stockholders meetings, subject to certain exceptions, and (4) the counterparty to such transaction is a financial institution in the business of engaging in such transactions for financial purposes, and LIC does not know or have reason to know that such counterparty is engaging in such transaction for any purpose other than to engage in short sales in the ordinary course of business or to return shares of FTD common stock to other stock lenders.

        The transfer restrictions under the investor rights agreement do not prohibit LIC from entering into stock hedging transactions, or transferring shares in connection with the settlement, satisfaction or early termination of such transactions. However, LIC may not engage in any such transactions during the initial 18-month period. Furthermore, the following conditions apply after the initial 18-month period: (1) the number of shares of FTD common stock subject to such transactions is capped at 5,101,505 (subject to adjustment as provided in the stock purchase agreement), (2) no such transaction can impair the right of LIC to vote its shares of FTD common stock; (3) if pursuant to a hedging transaction, a number of shares of FTD common stock representing 10% or more of the outstanding shares could be transferred by LIC to the counterparty in connection with the settlement, early termination or satisfaction of the hedging transaction, then LIC must settle or satisfy the obligations with respect to such hedging transaction in such a manner so that the number of shares of FTD common stock delivered to such counterparty does not exceed 10% of the total outstanding shares, unless (a) the counterparty has indicated to LIC that it will use such shares of FTD common stock solely to fill a preexisting short position in the shares of FTD common stock (either directly or by means of a double print) or (b) the counterparty agrees to dispose of such shares of FTD common stock in a manner reasonably calculated to result in no single person acquiring greater than 2% of the outstanding shares of FTD common stock as a result of such settlement, and (4) LIC may not engage in any hedging transaction unless the counterparty to such transaction is a financial institution in the business of engaging in such transactions and LIC does not know or have reason to know that such counterparty is engaging in such transaction other than as part of its normal course of business.


Registration Rights

        After the expiration of the initial 18-month period, and subject to certain exceptions, additional limitations and conditions, upon the written request of LIC, FTD must use its reasonable best efforts to register under the Securities Act on Form S-3 (or other available form) the offer and sale of all or a portion of the FTD shares. FTD is required to use its reasonable best efforts to qualify and remain

87


Table of Contents

qualified for shelf registrations on Form S-3. Any demand by LIC to offer securities for sale must be with respect to securities constituting at least the lesser of $50,000,000 and 10% of FTD's market capitalization.

        Additionally, LIC holds certain customary "piggyback" registration rights, pursuant to which FTD must give notice to LIC of any registration of FTD common stock, subject to certain exceptions, after the expiration of the initial 18-month period, and FTD must use its reasonable best efforts to include any of the FTD shares requested by LIC to be so included in such registration.

        The investor rights agreement further contains certain other customary provisions relating to the provision of information, lock-up requirements, registration procedures, expenses, indemnification and other aspects of LIC's registration rights.


LIC Representation on the FTD Board of Directors

        At the closing of the transaction, four directors designated by LIC will be appointed to the FTD board of directors. After the closing of the transaction, LIC will be entitled to designate for nomination directors for election at annual or special meetings of FTD stockholders at which directors of the FTD board are to be elected (each referred to as an "election meeting").

        At each election meeting, LIC will have the right to designate for nomination a number of persons such that the total number of LIC directors on the FTD board of directors (after giving effect to the election of the designees) is equal to the product of LIC's actual voting interest (calculated by dividing the number of shares of FTD common stock beneficially owned by LIC and entitled to vote at such election meeting, over the total number of shares of FTD common stock entitled to vote at such election meeting but excluding any shares issued pursuant to a top-up issuance), multiplied by the total number of seats on the FTD board. This number of directors will be rounded up to the next whole number. However, if LIC's actual voting interest (calculated in the same manner) becomes less than 10%, LIC will not be entitled to designate any directors to the FTD board.

        The investor rights agreement contains certain additional provisions to maintain LIC's right to proportionate representation on the FTD board of directors in accordance with the foregoing paragraph. These provisions include requirements that LIC cause the resignation of LIC directors from the FTD board in the event that LIC's actual voting interest in FTD declines, and that FTD cause the appointment of LIC directors to the FTD board in the event that LIC's actual voting interest in FTD increases.

        FTD is required to include LIC's director nominees on the management nomination slate, and FTD is required to use its reasonable best efforts to cause the election of each LIC director nominee at each election meeting.

        For so long as at least one LIC director serves on the FTD board of directors, LIC must vote all shares of FTD common stock owned by it in favor of the management nomination slate, against any other nominees, and, if the Nominating and Corporate Governance Committee of the FTD board so recommends, against the removal of any director from the FTD board. However, LIC's obligation to do so will expire upon the earliest of:

88


Table of Contents

        Each potential director proposed by LIC must meet FTD's standard qualifications for directors. If any LIC director or person designated by LIC as its nominee for election or appointment as a LIC director (1) is unable to serve as a nominee for election or appointment as a director or to serve as a director, for any reason (including because the FTD board of directors or the Nominating and Corporate Governance Committee of the FTD board determines that such person is not acceptable pursuant to the investor rights agreement), (2) is removed (upon death, resignation or otherwise) or fails to be elected at an election meeting, or (3) is to be substituted by LIC (with the relevant person's consent and resignation) for election at an election meeting, LIC shall have the right to replace such person. If FTD does not approve such replacement, LIC may propose another replacement until FTD approves a replacement.

        Each LIC director must, at the time of nomination and at all times thereafter until such individual's service on the FTD board of directors ceases, meet any applicable requirements or qualifications under applicable law or applicable stock exchange rules.

        Each LIC director must agree to immediately resign from the FTD board of directors if LIC's ownership of FTD falls below the threshold entitling LIC to such seat on the FTD board.

        Neither the FTD board of directors nor the Nominating and Corporate Governance Committee of the FTD board is required to nominate and recommend a proposed LIC director if, as determined in good faith by the majority of our non-LIC directors, service by such nominee as a director would reasonably be expected to fail to meet the independence standard of any stock exchange on which FTD common stock is listed or traded or otherwise violate applicable law, stock exchange rules or FTD's Corporate Governance Guidelines. However, LIC is entitled to designate (1) at a minimum, two persons, and (2) at a maximum, no more than fifty percent of the proposed LIC directors that do not meet such independence qualifications.

        At each election meeting, FTD is required to appoint a LIC director to each of the Nominating and Corporate Governance Committee, the Audit Committee and the Compensation Committee of the FTD board of directors. Such appointments are subject to the LIC director meeting the independence and other requirements of applicable law, such committee's charter and applicable stock exchange rules for such committee.

        No LIC director will be permitted to serve as chairperson of the FTD board of directors or of any committee of the FTD board. However, this limitation would cease to apply if LIC's beneficial ownership of FTD common stock exceeds fifty percent.


Affiliates of LIC

        Generally, the terms of the investor rights agreement that apply to LIC also apply to all affiliates of LIC and any transferee of FTD common stock in a stock distribution transaction (including a spin-off, split-off or related action involving an entity holding LIC's interest in FTD).


Representations and Warranties

        The investor rights agreement contains customary representations and warranties by FTD and LIC as to corporate organization, authority and the absence of any conflicts with their respective organizational documents.

89


Table of Contents


Termination

        The investor rights agreement may be terminated as follows:


Governing Law

        The investor rights agreement is governed by Delaware law.

90


Table of Contents


SECURITIES OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT OF FTD

        The following table sets forth certain information known to us with respect to the beneficial ownership of our common stock as of September 15, 2014 by (i) each person who, to our knowledge, beneficially owns 5% or more of the outstanding shares of our common stock, (ii) each of our directors, (iii) each named executive officer and (iv) all current directors and executive officers as a group. Except for shares of our common stock held in brokerage accounts that may, from time to time, together with other securities held in those accounts, serve as collateral for margin loans made from such accounts, none of the shares reported as beneficially owned are currently pledged as security for any outstanding loan or indebtedness.

Name and Address of Beneficial Owner
  Shares
Beneficially
Owned
  Percentage
Beneficial
Ownership(1)
 

5% Stockholders:

             

RS Investment Management Co. LLC(2)

    2,321,992     12.3 %

Litespeed Management, L.L.C.(3)

    1,830,646     9.7 %

Keeley Asset Management Corp.(4)

    1,381,373     7.3 %

Dimensional Fund Advisors LP(5)

    1,330,443     7.0 %

The Vanguard Group Inc.(6)

    1,184,071     6.3 %

BlackRock, Inc.(7)

    1,018,010     5.4 %

Directors and Named Executive Officers:

             

Robert S. Apatoff(8)

    206,053     *  

James T. Armstrong(9)

    18,525     *  

Tracey L. Belcourt

    1,173     *  

Robert Berglass(10)

    10,984     *  

Joseph W. Harch

    2,068     *  

Dennis Holt

    5,914     *  

Michael J. Silverstein

    1,229     *  

Becky A. Sheehan(11)

    32,594     *  

Rhys J. Hughes

    1,920     *  

All current directors and executive officers as a group (12 persons)(12)

    297,720     1.6 %

*
Represents beneficial ownership of less than 1% of the outstanding shares of our common stock.

(1)
Based on 18,949,011 shares of FTD common stock outstanding on September 15, 2014. Beneficial ownership is determined in accordance with the rules of the SEC and generally includes voting or investment power with respect to securities. Shares of our common stock subject to options that are currently exercisable or will become exercisable within 60 days after September 15, 2014 and shares issuable within 60 days after September 15, 2014 pursuant to outstanding restricted stock units awarded under the FTD Companies, Inc. Amended and Restated 2013 Incentive Compensation Plan are deemed outstanding for computing the percentage ownership of the person or entity holding such securities but are not outstanding for computing the percentage ownership of any other person or entity. Except as indicated by footnote, and subject to the community property laws where applicable, to our knowledge the persons named in the table above have sole voting and investment power with respect to all shares of our common stock shown as beneficially owned by them. Unless otherwise indicated, the address for each person is our address at 3113 Woodcreek Drive, Downers Grove, Illinois 60515.

(2)
This information is derived solely from Amendment No. 1 to Schedule 13G of RS Investment Management Co. LLC, filed February 26, 2014. The Schedule 13G reported that The RS Investment Management Co. LLC has sole voting power with respect to 2,168,970 of the reported

91


Table of Contents

    shares and sole dispositive power with respect to all of the reported shares. The address for RS Investment Management Co. LLC is One Bush Street, Suite 900, San Francisco, California 94104.

(3)
This information is derived solely from the Schedule 13G of Litespeed Management, L.L.C., filed January 13, 2014. The Schedule 13G reported beneficial ownership through Litespeed Management, L.L.C., Litespeed Master Fund, Ltd. and Jamie Zimmerman, each of which had shared voting and dispositive power with respect to all of the reported shares. The address for Litespeed Management, L.L.C. is 237 Park Avenue, Suite 900, New York, New York 10017.

(4)
This information is derived solely from the Schedule 13G of Keeley Asset Management Corp., filed February 7, 2014. According to the Schedule 13G, Keeley Asset Management Corp. had sole voting power with respect to 1,060,560 of the reported shares and sole dispositive power with respect to all of the reported shares. According to Schedule 13G, John L. Keeley Jr. had neither sole nor shared voting nor dispositive power over the 510 shares beneficially owned by him. The address for Keeley Asset Management Corp. is 111 West Jackson, Suite 810, Chicago, Illinois 60604.

(5)
This information is derived solely from the Schedule 13G of Dimensional Fund Advisors LP, filed February 10, 2014. The Schedule 13G reported that Dimensional Fund Advisors LP has sole voting power with respect to 1,332,353 of the reported shares and sole dispositive power with respect to all of the reported shares. The Schedule 13G also reported that Dimensional Fund Advisors LP furnishes investment advice to four investment companies registered under the Investment Company Act of 1940 and serves as investment manager to certain other commingled group trusts and separate accounts (collectively, the "Funds"). It further provided that the reported shares are owned by the Funds and Dimensional Fund Advisors LP and its subsidiaries disclaim beneficial ownership thereof. The address for Dimensional Fund Advisors LP is Palisades West, Building One, 6300 Bee Cave Road, Austin, Texas 78746.

(6)
This information is derived solely from the Schedule 13G of The Vanguard Group, Inc., filed February 11, 2014. The Schedule 13G reported that The Vanguard Group, Inc. has sole voting power with respect to 28,816 of the reported shares, sole dispositive power with respect to 1,100,281 of the reported shares and shared dispositive power with respect to 27,716 of the reported shares. The address for The Vanguard Group, Inc. is 100 Vanguard Boulevard, Malvern, PA 19355.

(7)
This information is derived solely from the Schedule 13G of BlackRock, Inc., filed February 18, 2014. The Schedule 13G reported that BlackRock, Inc. has sole voting power with respect to 1,650,454 of the reported shares and sole dispositive power with respect to all of the reported shares. The address for BlackRock, Inc. is 40 East 52nd Street, New York, New York 10022.

(8)
Includes (1) 40,109 shares of our common stock owned by Mr. Apatoff; (2) 20,346 shares held in a tenancy in common ownership arrangement between the Robert S. Apatoff 2007 Living Trust (of which Mr. Apatoff is the sole trustee and sole beneficiary during his lifetime) and the Vicki G. Apatoff 2007 Living Trust (of which Mr. Apatoff's spouse is the sole trustee and sole beneficiary during her lifetime); (3) 119,509 shares of our common stock subject to options that are currently exercisable or that will become exercisable within 60 days after September 15, 2014; and (4) 26,089 shares of our common stock subject to restricted stock units that will be subject to vest within 60 days after September 15, 2014.

(9)
Mr. Armstrong has shared voting and investment power over the shares of our common stock reflected in the table and disclaims beneficial interest of such shares of our common stock except to the extent of his beneficial ownership in Clearstone Venture Management Services.

92


Table of Contents

(10)
Includes (1) 10,384 shares of our common stock owned by Mr. Berglass and (2) 600 shares held by the 1998 Robert H. Berglass Living Trust dated July 8, 1998, over which Mr. Berglass exercises voting power, as trustee.

(11)
Includes 6,783 shares of our common stock subject to options that will become exercisable within 60 days after September 15, 2014; and 6,783 shares of our common stock subject to restricted stock units that will vest and become issuable within 60 days after September 15, 2014.

(12)
Includes 3,391 shares of our common stock subject to restricted stock units that will vest and become issuable within 60 days after September 15, 2014.

        The following table shows the number of shares of our common stock that are subject to outstanding restricted stock units held by our directors and executive officers as of September 15, 2014 but that are not otherwise scheduled to vest and become issuable within the 60-day period measured from September 15, 2014. Each restricted stock unit entitles the director or executive officer to one share of common stock at the time of vesting. The restricted stock units generally vest over a one- to four-year period of continued service with us.

Directors and Executive Officers
  Aggregate
Number of
Shares Subject
to RSUs
 

Robert S. Apatoff

    102,429  

James T. Armstrong

    3,573  

Tracey L. Belcourt

    3,573  

Robert Berglass

    4,385  

Joseph W. Harch

    3,573  

Dennis Holt

    3,573  

Michael J. Silverstein

    3,573  

Becky A. Sheehan

    41,584  

Rhys J. Hughes

    27,018  

Other Executive Officers

    44,305  

93


Table of Contents


COMPARATIVE PER SHARE DATA

Comparative Historical and Pro Forma Per Share Data

        Presented below are FTD's historical and pro forma per share data for the year ended December 31, 2013 and the six months ended June 30, 2014. The historical data has been derived from and should be read together with the audited consolidated financial statements of FTD and related notes thereto contained in FTD's Annual Report on Form 10-K for the fiscal year ended December 31, 2013, and FTD's unaudited condensed consolidated financial statements and related notes thereto contained in FTD's Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2014, which are incorporated by reference into this document. See "Where You Can Find More Information; Incorporation by Reference." The pro forma data has been derived from the unaudited pro forma combined financial information of FTD and Provide Commerce included elsewhere in this document.

        This comparative historical and pro forma per share data is being provided for illustrative purposes only. FTD may have performed differently had the transaction occurred prior to the periods presented. You should not rely on the pro forma per share data presented as being indicative of the results that would have been achieved had FTD and Provide Commerce been combined during the periods presented or of the future results or financial condition of FTD to be achieved following the transaction.

 
  As of and for
the Six Months
Ended June 30, 2014
  As of and for the Year
Ended December 31, 2013
 
FTD
  Historical   Pro Forma
(Combined with
Provide
Commerce)
  Historical(1)   Pro Forma
(Combined with
Provide
Commerce)
 
 
  (shares in thousands)
 

Basic earnings per share

  $ 0.74   $ 0.47   $ 0.67   $ (0.68 )

Diluted earnings per share

  $ 0.74   $ 0.47   $ 0.67   $ (0.68 )

Weighted average common shares outstanding—Basic

    18,905     29,108     18,640     28,843  

Weighted average common shares outstanding—Diluted

    18,950     29,153     18,659     28,862  

Book value per share of common stock

  $ 16.44   $ 22.52   $ 15.43     N/A  

Dividends declared per share of common stock(2)

  $   $   $   $  

(1)
In connection with the separation, FTD's previously outstanding 10,000 shares of common stock were automatically reclassified and became 18,583,927 shares of common stock. The same number of shares was used to calculate basic and diluted earnings per share for the periods prior to the separation.

(2)
During the year ended December 31, 2013, FTD paid cash dividends of $18.2 million to United Online prior to the separation.


Historical Common Stock Market Price and Dividend Data

        Historical market price data for Provide Commerce has not been presented as Provide Commerce is currently wholly owned by LIC, and there is no established trading market in Provide Commerce common stock. Shares of Provide Commerce common stock do not currently trade separately from LIC common stock.

        Shares of FTD common stock currently trade on the NASDAQ Global Select Market under the symbol "FTD." On July 29, 2014, the last trading day before the announcement of the transaction, the last sale price of FTD common stock reported by NASDAQ was $29.54. On [    •    ], 2014, the last

94


Table of Contents

trading day prior to the date of this proxy statement, the last sale price of FTD common stock reported by NASDAQ was $[    •    ].

        Prior to the separation from United Online, FTD's common stock began trading on the NASDAQ on a "when-issued" basis on October 10, 2013, and on a "regular way" basis on November 1, 2013, the separation date. There was no public market for FTD common stock prior to October 10, 2013. The following table sets forth the high and low sale prices of FTD common stock on the NASDAQ for the periods indicated. The quotations are as reported in published financial sources.

 
  FTD
common stock
 
 
  High   Low  

Year Ending December 31, 2014

             

First Quarter

  $ 34.82   $ 29.02  

Second Quarter

  $ 33.00   $ 27.60  

Third Quarter (through September 15, 2014)

  $ 34.31   $ 29.43  

Year Ended December 31, 2013

             

Fourth Quarter (October 10, 2013 through December 31, 2013)

  $ 36.99   $ 29.42  


FTD Dividend Policy

        FTD has not paid any cash dividends on its common stock since the separation on November 1, 2013. FTD does not currently anticipate paying any future cash dividends.

95


Table of Contents


PROVIDE COMMERCE'S BUSINESS

General

        Provide Commerce, acquired by LIC in February 2006, is a leading ecommerce retailer of high quality gifts backed by superior customer service. With a portfolio of brands that offer fresh flowers, gourmet food products, unique personalized gifts, and other gifting items, Provide Commerce presents a wide assortment of gifting options for consumers at a variety of price points. Provide Commerce utilizes proprietary technology to power its websites, manage the supply chain for its perishable products, and conduct light manufacturing operations for its personalized products. Provide Commerce derives a large portion of its revenue from the sale of flowers and plants on its ProFlowers and ProPlants websites, and the remainder primarily from the sale of gourmet foods and gifts from its branded websites and mobile apps: Cherry Moon Farms, for fresh premium fruits; Shari's Berries, for gourmet-dipped berries and related gifting products; Personal Creations, for personalized and unique gifts; Gifts.com, for a wide variety of everyday gifting searchable through its proprietary gifting tools; Kalla, for unique high-end floral gifting and delivery experiences in select locales; and Sincerely, for mobile gifting apps. The following description of Provide Commerce's business does not include information with respect to its RedEnvelope business which will be separated, and retained by LIC, prior to the closing of the transaction.


Industry Overview

Floral Industry

        Floral industry retail purchases in the U.S., including flowers, potted plants, and seeds were approximately $28 billion in 2012, according to the U.S. Department of Commerce. Trends in the floral retail markets have included the following:

Specialty Food and Gift Industry

        The retail specialty food market generated approximately $70 billion of sales in 2013, reflecting growth of 8% versus 2012, according to Specialty Food Magazine. Manufacturer sales of specialty foods direct to consumers represented 15% of such sales in 2013. In addition, purchases of sweets and personalized items as gifts totaled approximately $25 billion in 2012, based on research conducted by a third-party market research firm retained by Provide Commerce. Furthermore, this research shows 72% of individuals over the age of 18 report having purchased a gift online.


Business Strategy

        Provide Commerce's objective is to continually innovate and evolve the customer experience, inspiring unprecedented brand loyalty and passion. Provide Commerce's long-term vision is to become

96


Table of Contents

the world's most compelling gift-giving destination. Provide Commerce plans to attain this goal through the following key strategies:

Increase Brand Awareness

        Provide Commerce management believes that building greater awareness of brands within and beyond the existing customer base is important for continued growth. Provide Commerce intends to promote ProFlowers, ProPlants, Cherry Moon Farms, Shari's Berries, Personal Creations, Gifts.com, Kalla and Sincerely through a variety of traditional and digital marketing and promotional techniques, including internet, print, radio, email, direct mail, public relations and television.

Continue to Acquire and Retain Customers

        Provide Commerce management believes the ability to acquire and retain customers effectively is critical to Provide Commerce's success. To acquire customers, Provide Commerce relies on a variety of online and offline marketing activities, growing brand awareness and an easy-to-navigate storefront that allows customers to make purchases quickly. In addition, Provide Commerce constantly modifies the website format and redesigns the offerings based on customer purchasing patterns.

Continue to Establish Strong Relationships with High-Quality Suppliers

        Building strong relationships with quality suppliers is crucial to the success of Provide Commerce's market platform. To maintain high standards, Provide Commerce management believes they have established a quality assurance program to review and test its suppliers on an ongoing basis. Provide Commerce continues to work with suppliers to explore new methods to preserve quality and freshness, ensure a diverse product offering, maintain efficient technology and reduce costs. In addition, Provide Commerce will regularly seek out new suppliers to provide the broadest available selection of quality products for the benefit of Provide Commerce's customers.

Expand Distribution Initiatives

        Provide Commerce continues to expand its distribution network enabling it to provision its perishable products to its customers faster while improving the efficiency of its fulfillment and logistics systems. With its proprietary software, Provide Commerce is able to effectively balance the supply and demand for its products throughout the highly seasonal business cycle.


Competition

        Provide Commerce's competitors can be divided into several groups. Many of the products Provide Commerce offers can be purchased at supermarkets as well as at specialty markets. Floral competitors include traditional florists, catalog and online floral providers such as 1-800-FLOWERS and floral wire services such as FTD and Teleflora. Provide Commerce management believes competitors in the fresh fruit category include local farmers' markets and specialty catalog companies, such as Harry & David. Additionally, Provide Commerce competes with specialty food companies and general gift companies.

        Provide Commerce management believes that the principal competitive factors in the chosen markets are high-quality products, freshness, brand recognition, selection, convenience, price, website performance, customer service and accuracy of order shipment.


Seasonality

        Provide Commerce's business is seasonal due largely to purchases of flowers and other gifts for Valentine's Day and Mother's Day. In 2013, Provide Commerce earned approximately 65% of its revenue in the first half of the year. Revenues and operating results tend to be lower for the quarter

97


Table of Contents

ending September 30 because none of the most popular floral and gift-giving holidays, which include Mother's Day, Valentine's Day, Christmas, Easter and Thanksgiving, fall within that quarter. Furthermore, depending on the year, certain of the most popular floral and gift-giving holidays, such as Valentine's Day, may occur on a weekend or government holiday. As a result of these variations, Provide Commerce management believes that comparisons of revenues and operating results for any period with those of the immediately preceding period, or in some instances, the same period of the preceding fiscal year, may be of limited relevance in evaluating historical performance and predicting future financial performance. Provide Commerce's working capital, cash and any short-term borrowings may also fluctuate during the year as a result of the factors described above.


Products

        Provide Commerce's portfolio of brands includes ProFlowers, ProPlants, Shari's Berries, Cherry Moon Farms, Personal Creations, Gifts.com, Sincerely, and Kalla. Floral arrangements and plants are the primary business, but Provide Commerce also markets and sells gourmet-dipped treats, curated gourmet food assortments, personalized gifts, and a variety of other gifting items.


Suppliers and Distribution Facilities

        Provide Commerce fulfills customers' orders and distributes products into the carrier delivery system through three primary channels that consist of:

        By distributing products through this combination of suppliers, company-operated distribution facilities and contracted distribution facilities, Provide Commerce maximizes on-time delivery especially during peak shipment dates, distributes products in a more cost-effective manner and minimizes the capacity constraints that may exist at an individual supplier location. This distribution network also allows Provide Commerce to maintain direct control and ownership of products at all times during fulfillment of customers' orders and ultimately to compress the supply chain from supplier to consumer. Provide Commerce depends on three suppliers for approximately 75% of its cut floral products. The loss of any of these suppliers could adversely impact Provide Commerce.


Customer Service

        Provide Commerce believes that its ability to establish and maintain long-term relationships with customers and encourage repeat visits and purchases is due, in part, to the strength of Provide Commerce's customer support and service operations. Provide Commerce operates an in-house customer service center at Provide Commerce's headquarters with dedicated customer service representatives that are supplemented by teams of seasonal contractors during holidays and peak periods. The customer service center can scale to meet increased customer service requirements through a combination of in-house and outsourced staff during these peak periods.


Technology and Systems

        Provide Commerce believes its technology capabilities differentiate Provide Commerce from its competitors. Provide Commerce has developed a reliable, scalable, flexible and secure infrastructure

98


Table of Contents

using custom-built and third-party technologies. The features and functionality of the six primary systems that make up Provide Commerce's infrastructure (commerce, supply chain, customer relationship, transaction processing, data warehouse/reporting and user interface) have been created in direct response to the needs of customers, suppliers, and employees.


Regulation

        Provide Commerce is subject to a number of international, federal, state, and local laws and regulations, including, without limitation, those relating to taxation, bulk email or "spam" advertising, user privacy and data protection, consumer protection, antitrust, and unclaimed property. In addition, proposed laws and regulations relating to some or all of the foregoing, as well as to other areas affecting the businesses, are continuously debated and considered for adoption in the U.S. and other countries, and such laws and regulations could be adopted in the future.


Employees

        As of December 31, 2013, Provide Commerce had 756 full-time employees, excluding the RedEnvelope business. Provide Commerce also utilizes part-time and temporary employees to respond to fluctuating seasonal demand around holidays and peak periods. None of Provide Commerce's employees are subject to a collective bargaining agreement, and Provide Commerce believes its relationship with its employees to be good.


Proprietary Rights

        Provide Commerce's trade names, trademarks, service marks, patents, copyrights, domain names, trade secrets, and other intellectual property are important to the success of its business. Provide Commerce principally relies upon patent, trademark, copyright, trade secret, domain name laws, and contract laws to protect its intellectual property and proprietary rights. Provide Commerce also licenses rights to use some of its intellectual property to third parties. Provide Commerce continuously assesses whether to seek patent and other intellectual property protections for those aspects of its businesses and technologies that it believes constitute innovations providing competitive advantages. Provide Commerce generally enters into confidentiality or license agreements with its employees, consultants, and corporate partners, and generally controls access to, and distribution of, its technologies, documentation, and other proprietary information. Provide Commerce considers its trademarks, including the ProFlowers, ProPlants, Shari's Berries, Cherry Moon Farms, Personal Creations, Gifts.com and Kalla trademarks, to be valuable assets, and most of these trademarks have been registered in the U.S. and/or other countries.


Foreign and Domestic Operations

        Provide Commerce operates primarily in the U.S. and does not currently have any significant non-U.S. operations.

99


Table of Contents


SELECTED HISTORICAL CONSOLIDATED AND COMBINED FINANCIAL DATA OF PROVIDE COMMERCE

        The following table presents selected historical consolidated and combined financial data of Provide Commerce as of December 31, 2013 and 2012 and for the years ended December 31, 2013, 2012 and 2011, derived from Provide Commerce's audited consolidated and combined financial statements, which are included in this proxy statement. Additionally, the table presents selected historical consolidated and combined financial data as of June 30, 2014 and for the six months ended June 30, 2014 and 2013, derived from Provide Commerce's unaudited condensed consolidated and combined interim financial statements, which are included in this proxy statement. In the opinion of Provide Commerce's management, the unaudited interim information reflects all adjustments, consisting only of normal recurring adjustments, necessary for a fair statement of the results of operations and financial condition for the six months ended June 30, 2014 and 2013. Results for interim periods should not be considered indicative of results for any other periods or for the year.

        The information presented below is only a summary. The historical results presented below are not necessarily indicative of results that can be expected for any future period. The selected financial data set forth below should be read in conjunction with "Provide Commerce's Management's Discussion and Analysis of Financial Condition and Results of Operations" beginning on page 101 and Provide Commerce's historical consolidated and combined financial statements and notes thereto included in this proxy statement.

        The following amounts are in thousands:

 
  Six Months Ended
June 30,
  Year Ended December 31,  
 
  2014   2013   2013   2012   2011  

Statement of Operations Data

                               

Net sales

  $ 418,840   $ 401,719   $ 606,057   $ 563,944   $ 522,103  

Operating income (loss)(a)

  $ 10,732   $ 32,363   $ (19,985 ) $ 21,061   $ 25,841  

Net income (loss)(a)

  $ 4,964   $ 19,940   $ (18,281 ) $ 13,008   $ 16,599  

(a)
During the year ended December 31, 2013, Provide Commerce recorded impairments of goodwill and intangible assets of the Gifts.com reporting unit which negatively impacted operating income by $35.0 million and net income by $27.3 million.

 
  June 30,
  December 31,  
 
  2014   2013   2012  

Balance Sheet Data

                   

Cash and cash equivalents

  $ 46,789   $ 44,952   $ 52,495  

Total assets

  $ 514,993   $ 523,117   $ 563,702  

Long-term debt

             

100


Table of Contents


PROVIDE COMMERCE'S MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Overview

        Provide Commerce, acquired by LIC in February 2006, is a leading ecommerce retailer of high quality gifts backed by superior customer service. With a portfolio of brands that offer fresh flowers, gourmet food products, unique personalized gifts, and other gifting items, Provide Commerce presents a wide assortment of gifting options for consumers at a variety of price points. Provide Commerce utilizes proprietary technology to power its websites, manage the supply chain for its perishable products, and conduct light manufacturing operations for its personalized products. Provide Commerce derives a large portion of its revenue from the sale of flowers and plants on its ProFlowers and ProPlants websites, and the remainder primarily from the sale of gourmet foods and gifts from its branded websites and mobile apps: Cherry Moon Farms, for fresh premium fruits; Shari's Berries, for gourmet-dipped berries and related gifting products; Personal Creations, for personalized and unique gifts; Gifts.com, for a wide variety of everyday gifting searchable through its proprietary gifting tools; Kalla, for unique high-end floral gifting and delivery experiences in select locales; and Sincerely, for mobile gifting apps.


Consolidated and Combined Operating Results

        The following table sets forth, for the periods presented, selected historical consolidated and combined statements of operations data.


Six Months Ended June 30, 2014 compared to Six Months Ended June 30, 2013

 
  Six Months Ended
June 30,
  Change  
 
  2014   2013   $   %  
 
  (in thousands, except for percentages)
 

Net sales

  $ 418,840   $ 401,719   $ 17,121     4 %

Cost of sales (exclusive of depreciation, shown separately below)

    248,778     233,230     15,548     7 %

Operating expenses:

                         

Selling and marketing

    106,660     82,593     24,067     29 %

General and administrative

    29,896     30,392     (496 )   (2 )%

Information technology

    9,724     10,097     (373 )   (4 )%

Depreciation and amortization

    13,050     13,044     6      
                     

Total operating expenses

    159,330     136,126     23,204     17 %
                     

Operating income

    10,732     32,363     (21,631 )   (67 )%

Other income (expense) net

    (11 )   218     (229 )   (105 )%
                     

Income before income taxes

    10,721     32,581     (21,860 )   (67 )%

Income tax expense

    (5,757 )   (12,641 )   6,884     (54 )%
                     

Net income

  $ 4,964   $ 19,940   $ (14,976 )   (75 )%
                     
                     

Net Sales

        Net sales increased $17.1 million, or 4%, for the six months ended June 30, 2014, compared to the six months ended June 30, 2013. Revenues from Shari's Berries and Cherry Moon Farms increased $9.3 million primarily due to a $5.4 million increase associated with increased product-related revenues and a $6.0 million increase associated with increased shipping revenues, partially offset by a $1.9 million increase in refunds. Revenues from Personal Creations increased $5.7 million primarily due

101


Table of Contents

to a $3.9 million increase in product-related revenues and a $1.3 million increase in shipping revenues. Revenues from ProFlowers and ProPlants increased $2.2 million primarily due to a $4.7 million increase in shipping revenues, partially offset by a $2.6 million increase in refunds to customers. Net sales for the six months ended June 30, 2014 were negatively impacted by severe weather conditions across much of the United States during the Valentine's Day period that shut down several Provide Commerce distribution centers, caused numerous delivery issues, and had other unfavorable impacts.

Cost of Sales

        Cost of sales increased $15.5 million, or 7%, for the six months ended June 30, 2014, compared to the six months ended June 30, 2013. ProFlowers and ProPlants cost of sales increased $8.6 million primarily due to a $3.8 million increase in shipping costs, a $1.7 million increase in product-related costs, and a $1.6 million increase in spoiled inventory. Shari's Berries and Cherry Moon Farms cost of sales increased $3.3 million primarily due to increases in product replacement, accessory, and shipping costs. Personal Creations cost of sales increased $2.4 million, and the Gifts.com, Sincerely, and Kalla businesses also contributed an incremental $1.1 million in cost of sales. Cost of sales as a percentage of net sales was 59% for the six months ended June 30, 2014, compared to 58% for the six months ended June 30, 2013. Cost of sales for the six months ended June 30, 2014 were negatively impacted by severe weather conditions across much of the United States during the Valentine's Day period, as previously noted.

Selling and Marketing

        Selling and marketing expenses increased $24.1 million during the six months ended June 30, 2014, compared to the six months ended June 30, 2013. The increase in selling and marketing expenses was primarily due to a $10.7 million increase in advertising associated with ProFlowers and ProPlants. Selling and marketing expenses associated with Shari's Berries and Cherry Moon Farms increased $5.7 million and selling and marketing expenses associated with Personal Creations increased $5.0 million, in each case due to increased order volumes. Selling and marketing expenses associated with the Kalla brand increased $2.5 million. Selling and marketing expenses, as a percentage of net sales were 25% for the six months ended June 30, 2014, compared to 21% for the six months ended June 30, 2013. Selling and marketing expenses as a percentage of net sales for the six months ended June 30, 2014 were negatively impacted by severe weather conditions across much of the United States during the Valentine's Day period as it impacted both consumer demand and Provide Commerce's ability to fulfill consumer demand.

General and Administrative

        General and administrative expenses decreased $0.5 million for the six months ended June 30, 2014, compared to the six months ended June 30, 2013, primarily due to a $3.7 million reduction in long-term compensation expense, partially offset by a $2.9 million increase in personnel-related and administrative costs. Transaction costs incurred during the six months ended June 30, 2014 associated with the proposed acquisition by FTD were $1.7 million. General and administrative expenses, as a percentage of net sales, declined to 7% for the six months ended June 30, 2014, compared to 8% for the six months ended June 30, 2013.

Information Technology

        Information technology expenses decreased $0.4 million for the six months ended June 30, 2014, compared to the six months ended June 30, 2013.

102


Table of Contents

Income Tax Expense

        The effective income tax rate was 54% for the six months ended June 30, 2014, compared to 39% for the six months ended June 30, 2013. The increase in the effective tax rate was primarily due to non-deductible transaction costs.


Years Ended December 31, 2013, 2012 and 2011

 
   
   
   
  % Change  
 
  Year Ended December 31,  
 
  2013 to
2012
  2012 to
2011
 
 
  2013   2012   2011  
 
  (in thousands, except for percentages)
 

Net sales

  $ 606,057   $ 563,944   $ 522,103     7 %   8 %

Cost of sales (exclusive of depreciation, shown separately below)

    361,542     324,606     288,330     11 %   13 %

Operating expenses:

                               

Selling and marketing

    130,187     120,375     114,625     8 %   5 %

General and administrative

    53,619     52,574     46,076     2 %   14 %

Information technology

    20,247     18,484     17,374     10 %   6 %

Depreciation and amortization

    25,483     26,844     29,857     (5 )%   (10 )%

Impairment of goodwill and intangible assets

    34,964             N/A     N/A  
                           

Total operating expenses

    264,500     218,277     207,932     21 %   5 %
                           

Operating income (loss)

    (19,985 )   21,061     25,841     (195 )%   (18 )%

Other income, net

    330     372     228     (11 )%   63 %
                           

Income (loss) before income taxes

    (19,655 )   21,433     26,069     (192 )%   (18 )%

Income tax benefit (expense)

    1,374     (8,425 )   (9,470 )   (116 )%   (11 )%
                           

Net income (loss)

  $ (18,281 ) $ 13,008   $ 16,599     (241 )%   (22 )%
                           
                           


Year Ended December 31, 2013 compared to Year Ended December 31, 2012

Net Sales

        Net sales increased $42.1 million, or 7%, for the year ended December 31, 2013, compared to the year ended December 31, 2012. In October 2012, the nature of the ProFlowers and ProPlants business arrangements for consumer orders fulfilled by florists changed and Provide Commerce became the principal in these arrangements. Therefore, ProFlowers and ProPlants began recognizing revenue on a gross basis (compared to on a net basis in periods prior to this) for these orders. This change contributed $21.7 million in incremental revenue in 2013. Excluding this change, revenue from ProFlowers and ProPlants increased $6.5 million, or 2%, primarily due to an increase in shipping-related revenues. In addition, revenues from Shari's Berries and Cherry Moon Farms increased $12.8 million primarily due to an $8.2 million increase in product-related revenues and a $5.9 million increase in shipping revenues, partially offset by a $0.6 million increase in refunds and $0.5 million decrease in commission revenues. Revenues from Personal Creations increased $5.4 million primarily due to product-related revenues. The Gifts.com business had a $4.7 million decrease in revenues primarily due to a reduction in search traffic.

Cost of Sales

        Cost of sales increased $36.9 million, or 11%, for the year ended December 31, 2013, compared to the year ended December 31, 2012. ProFlowers and ProPlants cost of sales increased $23.5 million primarily due to the florist-fulfilled business change and resulting recognition of gross revenue and associated costs. Shari's Berries and Cherry Moon Farms cost of sales increased $6.3 million primarily

103


Table of Contents

driven by the increase in product and shipping costs associated with the higher revenues. Personal Creations cost of sales increased $5.8 million due to higher revenues and costs attributable to warehouse expansion. The Gifts.com and Sincerely businesses also contributed an incremental $1.4 million in cost of sales during the year ended December 31, 2013. Cost of sales as a percentage revenue increased to 60% for the year ended December 31, 2013, compared to 58% for the year ended December 31, 2012.

Selling and Marketing

        Selling and marketing expenses increased $9.8 million during the year ended December 31, 2013, compared to the year ended December 31, 2012. Selling and marketing expenses associated with Shari's Berries and Cherry Moon Farms increased $4.1 million related to increased revenues. Selling and marketing expenses associated with Personal Creations also increased $4.1 million related to increased revenues. Selling and marketing expenses associated with ProFlowers and ProPlants increased $2.6 million. The Kalla brand, which Provide Commerce launched during 2013, had selling and marketing expenses of $1.4 million. Selling and marketing expenses associated with Gifts.com decreased $2.5 million related to the decrease in revenues. Selling and marketing expenses, as a percentage of net sales, remained consistent at 21% for the year ended December 31, 2013, compared to the year ended December 31, 2012.

General and Administrative

        General and administrative expenses increased $1.0 million for the year ended December 31, 2013, compared to the year ended December 31, 2012, primarily due to a $2.0 million increase in legal expenses compared to 2012 (when insurance recoveries offset legal expenses), an increase in credit card fees of $1.4 million, and an increase in other general and administrative expenses of $1.4 million (primarily related to $0.5 million of expenses related to a facility move at Personal Creations in 2013 and $0.3 million of expenses for the Kalla brand launched in 2013), partially offset by a decrease in long-term compensation expense of $3.7 million during the year ended December 31, 2013. General and administrative expenses, as a percentage of net sales, remained consistent at 9% for the year ended December 31, 2013, compared to the year ended December 31, 2012.

Information Technology

        Information technology expenses increased $1.8 million for the year ended December 31, 2013, compared to the year ended December 31, 2012. The increase in information technology expenses was primarily due to $0.5 million of spending related to the Sincerely and Kalla businesses, which were acquired and launched, respectively, in 2013, $0.4 million of increased spending on personnel-related costs, and $0.8 million in other technology expenses.

Depreciation and Amortization

        The decrease of $1.4 million in depreciation and amortization expense for the year ended December 31, 2013, compared to the year ended December 31, 2012, was primarily due to lower amortization of intangible assets for Gifts.com as certain assets became fully amortized during 2012.

Impairment of Goodwill and Intangible Assets

        During the year ended December 31, 2013, Provide Commerce recorded impairments of goodwill and intangibles totaling $35.0 million related to its Gifts.com business, due to declining operating results and adverse business conditions.

Income Tax Benefit (Expense)

        The effective income tax rate was 7% for the year ended December 31, 2013, compared to 39% for the year ended December 31, 2012. The decrease in the effective tax rate was primarily due to the non-deductible impairment expense.

104


Table of Contents


Year Ended December 31, 2012 compared to Year Ended December 31, 2011

Net Sales

        Net sales increased $41.8 million, or 8%, for the year ended December 31, 2012, compared to the year ended December 31, 2011. Revenue from Shari's Berries and Cherry Moon Farms increased $30.5 million primarily due to a $20.2 million increase associated with product-related revenues and a $10.7 million increase associated with increased shipping revenues. Revenues from Personal Creations increased $8.2 million primarily due to a $5.6 million increase in product-related revenues, a $2.2 million increase in shipping revenues, and a $0.7 million decrease in refunds. Revenue from ProFlowers and ProPlants increased $8.2 million due to an $8.8 million increase in product-related revenues and a $3.6 million increase in shipping revenues, partially offset by a $4.2 million decrease in commission revenue. Revenue from Gifts.com decreased $5.1 million primarily due to a reduction in search traffic.

Cost of Sales

        Cost of sales increased $36.3 million, or 13%, for the year ended December 31, 2012, compared to the year ended December 31, 2011. Shari's Berries and Cherry Moon Farms cost of sales increased $19.2 million primarily due to the increase in product and shipping costs associated with increased revenues. ProFlowers and ProPlants cost of sales increased $13.0 million due to higher freight costs and other cost increases associated with the increased revenues. Personal Creations cost of sales increased $3.6 million due to higher product, freight, and facilities costs associated with the increased revenues. Cost of sales, as a percentage of net sales, were 58% for the year ended December 31, 2012, compared to 55% for the year ended December 31, 2011.

Selling and Marketing

        Selling and marketing expenses increased $5.8 million during the year ended December 31, 2012, compared to the year ended December 31, 2011. Selling and marketing expenses associated with Shari's Berries and Cherry Moon Farms increased $7.7 million associated with the increase in revenues. Personal Creations selling and marketing expenses increased $3.7 million due to $2.2 million of costs associated with the increased revenues and $1.5 million of costs associated with increased headcount in marketing and merchandising. Selling and marketing expenses for the ProFlowers and ProPlants businesses decreased $3.3 million primarily due to lower advertising expense. Selling and marketing expenses for Gifts.com decreased $2.5 million. Selling and marketing expenses, as a percentage of net sales, were 21% for the year ended December 31, 2012, compared to 22% for the year ended December 31, 2011.

General and Administrative

        General and administrative expenses increased $6.5 million for the year ended December 31, 2012, compared to the year ended December 31, 2011, primarily due to an $8.8 million increase in long-term compensation expense and a $1.9 million increase related to increased supply chain expenses for Personal Creations, partially offset by a $6.9 million reduction in legal expense related to lower legal activity and insurance recoveries from a legal settlement in 2012 which offset legal fees. General and administrative expenses, as a percentage of net sales, remained consistent at 9% for the year ended December 31, 2013, compared to the year ended December 31, 2012.

Information Technology

        Information technology expenses increased $1.1 million for the year ended December 31, 2012, compared to the year ended December 31, 2011. The increase in information technology expenses primarily related to an increase in personnel-related costs to support the growth of the business.

105


Table of Contents

Depreciation and Amortization

        The decrease of $3.0 million in depreciation and amortization expense for the year ended December 31, 2012, compared to the year ended December 31, 2011, was primarily due to lower amortization of intangible assets for both Personal Creations and Gifts.com as certain assets became fully amortized during 2011.

Income Tax Expense

        The effective income tax rate was 39% for the year ended December 31, 2012, compared to 36% for the year ended December 31, 2011 primarily due to a change in state effective tax rates and a change in non-deductible expenses.


Liquidity and Capital Resources

Line of Credit Agreement

        Provide Commerce has entered into a credit agreement (the "PC credit agreement") for a line of credit (the "PC line of credit") with a bank in the amount of $25 million, which matures in December 2014. Borrowings on the PC line of credit accrue interest at an annual rate of 1.5% plus LIBOR. The bank, at its discretion, may cease advancement of funds or demand full payment of the obligations in the event that Provide Commerce breaches the PC credit agreement. At June 30, 2014, Provide Commerce had no borrowings outstanding under the PC line of credit.

        During the year ended December 31, 2013, Provide Commerce, purchased fixed assets in excess of the $20 million limitation specified in one of the bank covenants in the line of credit agreement and received a waiver from the bank for the covenant breach. During the quarters ended March 31, 2014, and June 30, 2014, Provide Commerce did not meet its minimum 12 month trailing earnings before interest, tax, depreciation and amortization ("EBITDA") financial covenant, as defined by the covenant. Provide Commerce also received a waiver for this covenant breach.


Six Months Ended June 30, 2014 compared to Six Months Ended June 30, 2013

        Provide Commerce's total cash and cash equivalents balance increased by $1.8 million to $46.8 million at June 30, 2014, compared to $45.0 million at December 31, 2013. The summary cash flows for the periods presented were as follows (in thousands):

 
  Six Months Ended
June 30,
 
 
  2014   2013  

Net cash provided by operating activities

  $ 19,005   $ 33,096  

Net cash used in investing activities

  $ (9,330 ) $ (6,747 )

Net cash (used in) provided by financing activities

  $ (7,838 ) $ 137  

        Net cash provided by operating activities for the six months ended June 30, 2014 decreased by $14.1 million, compared to the six months ended June 30, 2013. Net cash provided by operations is comprised of net income adjusted for non-cash items including, but not limited to, depreciation and amortization, stock-based compensation, and deferred taxes, and changes in operating assets and liabilities. The decrease in net cash provided by operating activities was primarily due to the $15.0 million decrease in net income, which included a $4.4 million decrease in stock based compensation, a $1.2 million unfavorable change in net trade and other receivables, and a $2.0 million unfavorable change in long-term liabilities, partially offset by a $7.5 million favorable change in accounts payable and other accrued liabilities and a $1.5 million favorable change in deferred taxes.

106


Table of Contents

        Net cash used in investing activities for the six months ended June 30, 2014 increased by $2.6 million, compared to the six months ended June 30, 2013, due to increases in the purchases of property and equipment for the six month period ended June 30, 2014.

        Net cash provided by financing activities for the six months ended June 30, 2014 decreased by $8.0 million, compared to the six months ended June 30, 2013. The decrease in net cash provided by financing activities was due to additional distributions paid to LIC during the six months ended June 30, 2014.


Year Ended December 31, 2013 compared to Year Ended December 31, 2012

        Provide Commerce's total cash and cash equivalents balance decreased by $7.5 million to $45.0 million at December 31, 2013, compared to $52.5 million at December 31, 2012. The summary cash flows for the periods presented were as follows (in thousands):

 
  Year Ended
December 31,
 
 
  2013   2012  

Net cash provided by operating activities

  $ 31,294   $ 27,632  

Net cash used in investing activities

  $ (29,765 ) $ (15,952 )

Net cash used in financing activities

  $ (9,072 ) $ (1,374 )

        Net cash provided by operating activities for the year ended December 31, 2013 increased by $3.7 million, compared to the year ended December 31, 2012. Net cash provided by operating activities is comprised of net income adjusted for non-cash items including, but not limited to, depreciation and amortization, stock-based compensation, impairment of goodwill and intangible assets, and deferred taxes, and changes in operating assets and liabilities. The increase in cash provided by operating activities was primarily due to a $31.3 million decrease in net income, which included a $35.0 million impairment of goodwill and intangible assets related to Gifts.com, and a $5.9 million favorable change in operating assets and liabilities, partially offset by a $6.8 million unfavorable change in deferred taxes. The favorable change in operating assets and liabilities primarily relates to a $7.3 million favorable change in deferred compensation liabilities, a $6.7 million favorable change in inventory, a $3.8 million favorable change in prepaid expenses and other current assets, and a $0.7 million favorable change in other current liabilities, partially offset by a $10.5 million unfavorable change in accounts payable and other accrued liabilities. Changes in operating assets and liabilities can cause variation in cash flows provided by operating activities due to seasonality, timing and other factors.

        Net cash used in investing activities for the year ended December 31, 2013 increased by $13.8 million, compared to the year ended December 31, 2012. The increase was primarily due to $10.8 million related to the acquisition of the Sincerely business during the year ended December 31, 2013 and a $2.9 million increase in purchases of property and equipment during the year ended December 31, 2013.

        Net cash used in financing activities for the year ended December 31, 2013 increased by $7.7 million, compared to the year ended December 31, 2012. In the year ended December 31, 2013, $9.1 million in cash distributions were paid to LIC, as compared to contributions of $3.6 million received in the year ended December 31, 2012.

        Based on current projections, Provide Commerce expects to continue to generate positive cash flows from operations at least for the next twelve months. Provide Commerce may use its existing cash balances and future cash generated from operations to fund, among other things, working capital, interest and principal payments under the PC line of credit and capital expenditures.

107


Table of Contents


Off-Balance Sheet Arrangements

        At June 30, 2014 and December 31, 2013, Provide Commerce did not have any off balance sheet arrangements as defined in Item 303(a)(4)(ii) of Regulation S K promulgated by the SEC that have, or are reasonably likely to have, a current or future material effect on its consolidated and combined financial condition, results of operations, liquidity, capital expenditures, or capital resources.


Qualitative and Quantitative Risk

        Provide Commerce is exposed to interest rate risk on its cash and cash equivalents and the outstanding balance under the PC line of credit. The interest rate set forth in the PC credit agreement is 1.5% plus LIBOR. While Provide Commerce does not currently maintain any short term investments, it maintains deposits, which are classified as cash equivalents. Therefore, its interest income is sensitive to changes in the general level of U.S. interest rates.


Critical Accounting Policies

        The preparation of financial statements in conformity with GAAP requires Provide Commerce management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. Significant items subject to such estimates and assumptions include the valuation of inventory, deferred taxes, goodwill and other intangible assets.

Inventory

        Inventory, consisting primarily of products held for sale, is stated at the lower of cost or market. Cost is determined by the average cost method. Provide Commerce assesses its inventory for estimated obsolescence or unmarketable inventory and writes down the difference between the cost of inventory and the estimated market value based upon supply on hand and assumptions about future sales.

Income Taxes

        Provide Commerce accounts for income taxes using the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying value amounts and income tax bases of assets and liabilities and the expected benefits of utilizing net operating loss and tax credit carryforwards. The deferred tax assets and liabilities are calculated using enacted tax rates in effect for each taxing jurisdiction in which the company operates for the year in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of an enacted change in tax rates is recognized in income in the period that includes the enactment date. Provide Commerce is included in the consolidated federal income tax return of LIC. For financial reporting purposes, Provide Commerce's tax provision has been calculated separately for each fiscal period as if it were a separate taxpayer. Income taxes payable (receivable) due to (from) LIC are recorded in accrued taxes and settled through cash transfers to (from) LIC. Provide Commerce recognizes the effect of income tax positions only if those positions are more likely than not of being sustained. Recognized income tax positions are measured at the largest amount that is greater than 50% likely of being realized. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs. Provide Commerce records interest related to unrecognized tax benefits in interest expense and penalties in general and administrative expenses. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.

108


Table of Contents

Goodwill

        Goodwill represents the excess of the cost of acquired businesses over the fair value of the tangible and identifiable intangible assets acquired and liabilities assumed. Goodwill is not amortized; rather Provide Commerce performs an annual impairment test during the fourth quarter and performs additional impairment tests whenever events or changes in circumstances indicate that the carrying value of goodwill may not be recoverable. Provide Commerce has the option to first perform a qualitative assessment of its goodwill to determine whether it is necessary to perform a quantitative impairment test. If Provide Commerce concludes it is more likely than not that the goodwill of one or more of its reporting units is impaired, management evaluates the recoverability of goodwill by performing a two-step impairment test. If a step one test is considered necessary based on the qualitative factors, Provide Commerce compares the carrying value of its reporting units to their respective estimated fair values. The fair value of Provide Commerce's reporting units is estimated utilizing a combination of the income and market approaches through the application of discounted cash flow (Level 3 inputs) and market comparable (Level 2 inputs) methods. Developing estimates of fair value requires significant judgments, including making assumptions about appropriate discount rates, perpetual growth rates, relevant comparable market multiples and the amount and timing of expected future cash flows. The cash flows employed in Provide Commerce's valuation analysis are based on management's best estimates considering current marketplace factors and risks as well as assumptions of growth rates in future years. If the assessed fair value of a reporting unit is less than its carrying value, a second step is required to measure the amount of the impairment loss (the Step 2 Test). In the Step 2 Test, the fair value (Level 3) of the specific reporting unit derived in the first step is allocated to the reporting unit's net assets. Any fair value in excess of amounts allocated to such net assets represents the implied fair value of goodwill. If the calculated fair value of the implied goodwill resulting from this allocation is lower than the carrying value of the reporting unit's goodwill, the difference is recognized as a noncash impairment charge. Provide Commerce's reporting units include Provide Commerce, Personal Creations, Gifts.com, and Sincerely.

Intangible Assets

        Intangible assets represent Provide Commerce's tradenames, proprietary technology, and customer relationships. All intangible assets, with the exception of Provide Commerce's tradenames, have finite lives and are amortized using the straight-line method over their estimated useful lives, ranging from three to ten years. Provide Commerce's tradenames are nonamortizable indefinite-lived intangible assets.

        Provide Commerce reviews its intangible amortizable assets with finite lives for impairment whenever events or changes in circumstances indicate that the carrying value of its intangible assets may not be recoverable. Factors that would necessitate an impairment assessment include a significant adverse change in the extent or manner in which an asset is used, a significant adverse change in legal factors or the business climate that could affect the value of the asset, or a significant decline in the observable market value of the asset, among others. If such factors indicate a potential impairment, the recoverability of the asset is assessed by determining if the carrying value of the asset exceeds the sum of the projected undiscounted cash flows expected to result from the use and eventual disposition of the asset over the remaining economic life of the asset. If the carrying amount of the asset is greater than the expected undiscounted cash flows to be generated by such asset, including its ultimate disposition, an impairment adjustment is recognized for the amount that the carrying value of the asset exceeds its fair value. Considerable management judgment is necessary to estimate the fair value of assets. Accordingly, actual results could vary significantly from such estimates. Assets to be disposed of are carried at the lower of their carrying amount or fair value.

109


Table of Contents

        Provide Commerce evaluates its indefinite-lived tradename intangible assets for impairment annually or whenever events or changes in circumstances indicate the carrying value may not be recoverable. Provide Commerce has the option to first perform a qualitative assessment of its indefinite-lived intangible assets to determine whether it is necessary to perform a quantitative impairment test. If, based on qualitative factors, Provide Commerce concludes it is more likely than not that its indefinite-lived intangible assets are impaired, management performs a two-step impairment test. If a step one test is considered necessary, Provide Commerce compares the carrying value of its indefinite-lived tradenames to their respective estimated fair values, measured using a royalty savings method (Level 3). The key variables used in the royalty savings method include future estimates of revenue, the royalty rate that is not being incurred due to owning the tradename, and the discount rate used to determine the present value the future cash flows. In the event that the fair value of Provide Commerce's indefinite-lived intangible assets is less than their carrying value, the assets are written down to fair value.

Revenue Recognition

        Revenue is recognized when the following four revenue recognition criteria are met: persuasive evidence of an arrangement exists, delivery has occurred, the selling price is fixed or determinable, and collectability is reasonably assured. Upon satisfaction of these criteria, revenue is recognized at the time of product delivery to customers. Net sales consist principally of the sales price for the items sold and outbound shipping costs charged to customers, less estimated refunds. Revenue is generally recognized for sales to consumers on a gross basis because Provide Commerce bears the risks and rewards associated with the revenue-generating activities by (1) acting as a principal in the transaction; (2) establishing prices; (3) being responsible for fulfillment of the order by third party suppliers; (4) taking the risk of loss for collection, delivery and returns; and (5) marketing the products and services. Sales tax collected from customers on retail sales is recorded on a net basis and is not included in revenue.

        Provide Commerce records deferred revenue for packages in transit at the end of the period, based on shipping data provided by Provide Commerce's carriers. The majority of Provide Commerce's packages are delivered within one day from the shipment date.

Stock Based Compensation

        Provide Commerce grants cash settled Stock Appreciation Rights (SARs) to certain employees. Provide Commerce records stock based compensation expense based on the fair value of the outstanding SARs at each reporting date and the portion of the SARs that have vested.

        Provide Commerce calculates stock compensation expense based on the fair value of the SARs using the Black Scholes option pricing model. The option pricing model uses inputs including the estimated fair value of Provide Commerce's common stock at the SAR's grant date and the reporting date, expected term, expected volatility, and expected risk free interest rate. The expected volatility rates are based on the historical volatility of publicly traded peer companies. The average expected term is calculated using the simplified method, which is the average date between the vesting and contractual date. The risk free interest rate is based on the U.S. Treasury yield curve for periods approximating the expected terms of the SARs.


Recent Accounting Pronouncements

        In July 2013, FASB issued ASU No. 2013 11, Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists, as codified in ASC 740, Income Taxes. The amendments in this update state that an unrecognized tax benefit, or a portion of an unrecognized tax benefit, should be presented in the financial statements as a reduction

110


Table of Contents

to a deferred tax asset for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward. However, to the extent a net operating loss carryforward, a similar tax loss, or a tax credit carryforward is not available at the reporting date under the tax law of the applicable jurisdiction to settle any additional income taxes that would result from the disallowance of a tax position or the tax law of the applicable jurisdiction does not require the entity to use, and the entity does not intend to use, the deferred tax asset for such purpose, the unrecognized tax benefit should be presented in the financial statements as a liability and should not be combined with deferred tax assets. This ASU applies to all entities that have unrecognized tax benefits when a net operating loss carryforward, a similar tax loss, or a tax credit carryforward exists at the reporting date. The amendments in this ASU will be effective for Provide Commerce for fiscal years, and interim periods within those years, beginning after December 15, 2014. Early adoption is permitted. The amendments should be applied prospectively to all unrecognized tax benefits that exist at the effective date. Retrospective application is permitted. Provide Commerce does not expect this update to have a material impact on its financial statements.

        In May 2014, FASB issued ASU No. 2014 09, Revenue from Contracts with Customers, as codified in ASC 606. The amendments in this update affect any entity that either enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of nonfinancial assets unless those contracts are within the scope of other standards. The amendments in this update require an entity to recognize revenue related to the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The amendments in this ASU will be effective for Provide Commerce for fiscal years, and interim periods within those years, beginning after December 15, 2016. Early adoption is not permitted. Provide Commerce is currently assessing the impact of this update on its financial statements.

111


Table of Contents


UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION OF FTD COMPANIES, INC.

        On July 30, 2014, FTD, LIC, and Provide Commerce entered into the stock purchase agreement. Pursuant to the stock purchase agreement, FTD, Inc., a wholly owned subsidiary of FTD, will acquire from a wholly owned subsidiary of LIC all of the issued and outstanding shares of Provide Commerce's common stock, par value $0.001 per share. The purchase price consists of (1) $121 million in cash, and (2) the FTD shares, totaling 10,203,010 shares of FTD common stock. The cash portion of the purchase price will be adjusted to account for changes in working capital as of the closing date of the transaction compared to the average monthly working capital for the year prior to the date of the stock purchase agreement, certain indebtedness of Provide Commerce, certain incurred but unpaid transaction expenses and cash and cash equivalents of Provide Commerce. The stock portion of the purchase price consists of the number of shares of FTD common stock that would equal 35% of the post-closing issued and outstanding shares of FTD common stock (based on the number of shares issued and outstanding on July 29, 2014). In accordance with GAAP requirements, the purchase price allocation reflected in this unaudited pro forma combined financial information is based upon a purchase price of $478 million, inclusive of cash consideration and the fair value of the 10.2 million shares of FTD common stock to be issued. The fair value of the FTD shares was estimated using the price of FTD's common stock at the close of the market on September 19, 2014 of $34.99 per share, the most recent price prior to filing this proxy statement. The actual fair value of the purchase price under GAAP will not be known until the closing date.

        For the purposes of the unaudited pro forma combined financial information, the cash portion of the purchase price is assumed to be $121 million. Under the terms of the stock purchase agreement, LIC and FTD have agreed to indemnify each other for breaches of representations, warranties and covenants. Such indemnification is subject to a cap on losses of $86 million and applies only to the extent such losses exceed $4.3 million in the aggregate, each of which cap and deductible amounts is subject to certain exceptions. In addition, LIC has agreed to indemnify FTD for certain liabilities, costs and expenses related to Provide Commerce's ownership of RedEnvelope, certain tax and employee benefit matters and any transaction costs incurred but unpaid at the closing. These indemnification rights and obligations have been reflected in the pro forma combined balance sheet.

        Concurrent with the execution of the stock purchase agreement, FTD entered into the commitment letter. The commitment letter provided, on the terms and subject to the conditions set forth in the commitment letter, for the term loan to be added to the 2013 credit agreement. The commitment letter further provided the conditions for the acquisition advance under the 2013 credit agreement in connection with the closing of the transaction, which advance would be used to finance the cash portion of the purchase price.

        On September 19, 2014, FTD entered into to the credit agreement amendment with the lenders. The credit agreement amendment amended and restated the 2013 credit agreement in its entirety. Among other things, the amended and restated credit agreement provides for the term loan, in an aggregate principal amount of $200 million, and the conditions for the acquisition advance. The proceeds of the term loan were used to repay a portion of outstanding revolving loans under the amended and restated credit agreement in advance of the closing of the transaction to ensure sufficient revolving availability under the amended and restated credit agreement to make the acquisition advance. The interest rate on the term loan is a rate based on FTD's consolidated leverage ratio plus LIBOR. The initial interest rate on the term loan is the same as the current rate on the 2013 credit agreement. Therefore the current rate of 2.23% has been used for purposes of the pro forma financial information. The term loan is payable in quarterly installments over the five year term of the loan. The maturity date of the revolving credit facility was extended to match the maturity date of the term loan.

        The accompanying unaudited pro forma combined financial information presents the pro forma combined financial position and results of operations of the combined company based upon the

112


Table of Contents

historical financial statements of FTD and Provide Commerce after giving effect to the acquisition of Provide Commerce by FTD and the amended and restated credit agreement. The unaudited pro forma combined financial information assumes the proceeds from the $200 million term loan with an immediate $70 million repayment of outstanding revolving loans under the amended and restated credit agreement, resulting in $130 million of additional debt. The amortization of the deferred financing fees and the incremental interest expense resulting from the amended and restated credit agreement have been reflected in the unaudited pro forma combined statement of operations in interest expense. The unaudited pro forma combined financial information is prepared as if the acquisition of Provide Commerce and the issuance of $130 million of additional debt had been completed on June 30, 2014 for purposes of preparing the unaudited pro forma combined balance sheet, and on January 1, 2013 for purposes of preparing the unaudited pro forma combined statements of operations for the twelve months ended December 31, 2013 and the six months ended June 30, 2014. In preparing the pro forma combined financial information, certain pro forma reclassification adjustments were made to the Provide Commerce financial information to conform to FTD's financial statement presentation.

        The transaction will be accounted for as a business combination using the acquisition method of accounting and, accordingly, will result in the recognition of assets acquired and liabilities assumed at fair value. The preliminary allocation of the purchase price used in the unaudited pro forma combined financial information is based on preliminary estimates and currently available information. These assumptions and estimates, some of which cannot be finalized until the closing of the transaction, will be revised as additional information becomes available upon closing of the transaction and finalization of the valuation of Provide Commerce's assets and liabilities. The final determination of the allocation of the purchase price will be based on the fair values of assets and liabilities of Provide Commerce as of the date the transaction closes.

        The accompanying unaudited pro forma combined financial information is provided for illustrative purposes only and does not purport to represent what the actual consolidated results of operations or the consolidated financial position of FTD would have been had the acquisition of Provide Commerce occurred on the dates assumed, nor are they necessarily indicative of FTD's future consolidated results of operations or consolidated financial position. The unaudited pro forma combined financial information does not give effect to any potential cost reductions or operating efficiencies which may result from the transaction. The unaudited pro forma combined statements of operation also do not reflect any transaction, integration or restructuring costs, as those costs are attributable to the transaction but will not have a continuing impact. The expected future cash costs related to transaction costs are reflected in the pro forma combined balance sheet.

        Prior to the closing of the transaction, Provide Commerce's stock appreciation rights plan will be terminated and LIC will satisfy any outstanding obligations under such plan. The historical stock compensation expense for Provide Commerce has not been eliminated from the pro forma combined statements of operations as no new compensation agreement has been reached with Provide Commerce's employees who hold stock-based awards.

        The unaudited pro forma combined financial information should be read in conjunction with (1) FTD's historical consolidated financial statements and related notes contained in FTD's annual report on Form 10-K for the year ended December 31, 2013, which is incorporated by reference into this proxy statement, (2) Provide Commerce's historical audited consolidated and combined financial statements and related notes for the year ended December 31, 2013, which are included elsewhere in this proxy statement, (3) FTD's historical unaudited consolidated financial statements and related notes contained in FTD's quarterly report on Form 10-Q for the quarterly period ended June 30, 2014, which is incorporated by reference into this proxy statement, and (4) Provide Commerce's historical unaudited condensed consolidated and combined interim financial statements and related notes for the six months ended June 30, 2014, which are included elsewhere in this proxy statement. The results of RedEnvelope, including certain costs allocated to RedEnvelope by Provide Commerce, have been excluded from Provide Commerce's consolidated and combined financial statements. Prior to closing the transaction, LIC will separate, by means of a distribution, the RedEnvelope business from the Provide Commerce business. The RedEnvelope business will be retained by LIC and will not be part of the transaction.

113


Table of Contents


UNAUDITED PRO FORMA COMBINED BALANCE SHEET

AS OF JUNE 30, 2014

(In thousands)

 
  FTD   Provide
Commerce
   
  Reclassifications    
  Pro Forma
Adjustments
   
  Pro Forma  

ASSETS

                                           

Current assets:

                                           

Cash and cash equivalents

  $ 63,495   $ 46,789       $       $ (55,231 ) (a)   $ 55,053  

Accounts receivable, net of allowances

    24,992     3,860                         28,852  

Inventories

    6,365     21,388                         27,753  

Deferred tax assets, net

    7,570     2,628                         10,198  

Prepaid expenses

    6,873     5,075                         11,948  
                                   

Total current assets

    109,295     79,740                 (55,231 )       133,804  

Property and equipment, net

    30,741     42,284                         73,025  

Intangible assets, net

    164,866     42,626   (b)             196,374   (c)     403,866  

Goodwill

    344,191     336,064                 (11,613 ) (d)     668,642  

Other assets

    13,858     14,279                 3,981   (e)     32,118  
                                   

Total assets

  $ 662,951   $ 514,993       $       $ 133,511       $ 1,311,455  
                                   
                                   

LIABILITIES AND STOCKHOLDERS' EQUITY

                                           

Current liabilities:

                                           

Accounts payable

    38,987     19,070                         58,057  

Accrued liabilities

    14,248     58,222         (24,451 ) (f)             48,019  

Cash settled equity award liabilities

        7,911                 (7,911 ) (j)      

Accrued compensation

    7,870             12,179   (g)             20,049  

Deferred revenue

    8,052             4,631   (h)             12,683  

Income taxes payable

    5,391             9,442   (i)     (9,442 ) (j)     5,391  

Other current liabilities

        2,927         (1,801 ) (h)     (376 ) (j)     750  
                                   

Total current liabilities

    74,548     88,130                 (17,729 )       144,949  

Long-term debt

    220,000                     130,000   (k)     350,000  

Deferred tax liabilities, net

    54,253     8,202                 82,094   (l)     144,549  

Deferred compensation and cash settled equity award liabilities

        11,156                         11,156  

Other liabilities

    2,645     4,823                 (2,175 ) (j)     5,293  
                                   

Total liabilities

    351,446     112,311                 192,190         655,947  
                                   

Commitments and contingencies

                                           

Stockholders' equity:

                                           

Preferred stock, 5,000,000 shares, par value $0.0001

                                 

Common stock, 60,000,000 shares, par value $0.0001

    2                     1   (m)     3  

Additional paid-in capital

    307,402                     357,002   (m)     664,404  

Parent investment

        322,902                 (322,902 ) (n)      

Retained earnings

    18,206     79,780                 (92,780 ) (o)     5,206  

Accumulated other comprehensive loss

    (14,105 )                           (14,105 )