Business Segments

6 Months Ended

Dec. 30, 2012

Business Segments

Business Segments

Note 11 — Business Segments

The Company’s management reviews the results of the Company’s operations by the following three business segments:

· Consumer Floral,

· BloomNet Wire Service, and

· Gourmet Food and Gift Baskets

During the first quarter of fiscal 2012, the Company made the decision to divest its non-strategic wine fulfillment services business, which was previously included within its Gourmet Food & Gift Baskets segment. On September 6, 2011, the Company completed the sale of this business; refer to “Discontinued Operations” below for a further discussion. Consequently, the Company has classified the results of operations of its wine fulfillment services business as a discontinued operation for all periods presented.

	Three Months Ended						Six Months Ended
Net revenues	December 30, 2012			January 1, 2012			December 30, 2012			January 1, 2012
	(in thousands)
Segment Net Revenues:
Consumer Floral	$	91,826		$	91,041		$	164,603		$	161,181
BloomNet Wire Service	18,734			18,272			38,501			36,777
Gourmet Food & Gift Baskets	142,736			131,100			171,142			159,725
Corporate (**)	200			189			394			376
Intercompany eliminations	(480		)	(757		)	(756		)	(1,016		)
Total net revenues	$	253,016		$	239,845		$	373,884		$	357,043

	Three Months Ended						Six Months Ended
Operating Income	December 30, 2012			January 1, 2012			December 30, 2012			January 1, 2012
	(in thousands)
Segment Contribution Margin (*):
Consumer Floral	$	10,286		$	9,984		$	17,172		$	15,951
Bloomnet Wire Service	6,049			5,074			11,845			9,667
Gourmet Food & Gift Baskets (***)	26,868			30,166			24,381			28,240
Segment Contribution Margin Subtotal	43,203			45,224			53,398			53,858
Corporate (**)	(12,674		)	(11,915		)	(24,858		)	(23,380		)
Depreciation and amortization	(4,531		)	(4,929		)	(8,989		)	(9,831		)
Operating income	$	25,998		$	28,380		$	19,551		$	20,647

(*) Segment performance is measured based on contribution margin, which includes only the direct controllable revenue and operating expenses of the segments. As such, management’s measure of profitability for these segments does not include corporate overhead, which includes stock-based compensation, (see footnote (**) below), depreciation and amortization, net interest expense and income taxes. Assets and liabilities are reviewed at the consolidated level by management and are not accounted for by segment.

(**) The Company’s enterprise shared service cost centers include, among other items, Information Technology, Human Resources, Accounting and Finance, Legal, Executive and Customer Service Center functions.  In order to leverage the Company’s infrastructure, these functions are operated under a centralized management platform, providing support services throughout the organization. The costs of these functions, other than those of the Customer Service Center, which are allocated directly to the above segments based upon usage, are included within corporate expenses, which include stock-based compensation, as they are not directly allocable to a specific segment.

(***) GFGB segment contribution margin during the three and six months ended January 1, 2012 includes a $3.8 million gain on the sale of 17 Fannie May stores, which are being operated as franchised locations post-sale.