Classmates.com 2008 Annual Report Download - page 43

Table of Contents
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Forward-Looking Statements
This Annual Report on Form 10-K and the documents incorporated herein by reference contain 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 about
future financial performance; segment metrics, operating expenses; market trends, including those in the markets in which we compete;
operating and marketing efficiencies; revenues; cash flows and uses of cash; dividends; capital expenditures; depreciation and amortization; tax
payments; impairment charges; stock
-based compensation; restructuring charges; foreign currency exchange rates; our ability to repay
indebtedness, pay dividends and invest in initiatives; statements regarding the anticipated impact or benefits associated with the acquisition of
FTD; our products and services; pricing; competition; and strategies and initiatives. Potential factors that could affect the matters about which
the forward-looking statements are made include, among others, the factors disclosed in the section entitled "Risk Factors" and additional
factors that accompany their related forward
-looking statements in this Annual Report on Form 10-K and our other filings with the Securities
and Exchange Commission. Readers are cautioned not to place undue reliance on these forward-
looking statements, which reflect management's
analysis only as 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. Reported results should not be considered
an indication of future performance. Except as required by law, we undertake no obligation to publicly release the results of any revision 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.
Overview
We are a leading provider of consumer products and services over the Internet through a number of brands including FTD, Interflora,
Classmates, MyPoints, NetZero, and Juno. Our FTD segment provides floral and related products and services to consumers and retail florists, as
well as to other retail locations offering floral and related products and services. Our Classmates Media segment services are online social
networking and online loyalty marketing. Our primary Communications segment services are Internet access and email. On a combined basis,
our Web properties attract a significant number of Internet users, and we offer a broad range of Internet marketing services for advertisers.
Acquisition of FTD Group, Inc.
On August 26, 2008, we completed the acquisition of 100% of the capital stock of FTD Group, Inc., a leading provider of floral and related
products and services. The consideration consisted of (i) $10.15 in cash and (ii) 0.4087 of a share of United Online common stock for each
outstanding share of FTD common stock. The total merger consideration was approximately $307 million in cash and approximately
12.3 million shares of United Online common stock.
The FTD acquisition was financed, in part, with the net proceeds of term loan borrowings under a $425 million credit facility, which
includes a $50 million revolving credit facility that was undrawn at the closing of the transaction, with Wells Fargo Bank, National Association,
as lead arranger, and a $60 million credit facility with Silicon Valley Bank. The remaining cash consideration in the transaction was paid from
United Online's and FTD's existing cash on hand.
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