United Online to Complete Tax-Free Spin Off of FTD on November 1, 2013

  United Online to Complete Tax-Free Spin Off of FTD on November 1, 2013

Business Wire

WOODLAND HILLS, Calif. -- October 1, 2013

United Online, Inc. (Nasdaq: UNTD) today announced that the U.S. Securities
and Exchange Commission has declared the FTD Companies, Inc. (“FTD”)
Registration Statement on Form 10 effective and that United Online’s board of
directors has approved the separation of FTD from United Online through a
tax-free dividend involving the distribution of all FTD common stock held by
United Online to United Online’s stockholders on November 1, 2013. United
Online’s board of directors also determined to implement the previously
announced one-for-seven reverse stock split of shares of United Online common
stock immediately prior to the spin off of FTD. As a result, the following
will occur:

  *FTD common stock will be distributed at 12:01 a.m. Eastern Daylight Time
    (“EDT”) on November 1, 2013 to United Online stockholders of record as of
    the close of business on October 10, 2013.
  *United Online stockholders will receive one share of FTD common stock for
    every five shares of United Online common stock they hold on the record
    date (prior to giving effect to the reverse stock split of United Online
    shares).
  *United Online will effect a one-for-seven reverse stock split of United
    Online common stock, which will become effective at 11:59 p.m. EDT on
    October 31, 2013.

Following completion of the spin off, FTD will be an independent,
publicly-traded company on the NASDAQ stock exchange, called FTD Companies,
Inc., utilizing the symbol: “FTD”. The FTD Companies business will consist of
both the domestic and international operations of United Online’s FTD segment
and include the highly-recognized FTD^®  and Interflora^®  brands, both
supported by the Mercury Man logo that is displayed in approximately 40,000
floral shops worldwide. United Online will continue to operate the businesses
of the company’s Content & Media and Communications segments, supported by the
Classmates^®, StayFriends^™, MyPoints^®, NetZero^®, and Juno^® brands.

“The previously-announced spin off of FTD already has unlocked significant
value for the benefit of our stockholders, and we continue to believe that the
spin off will add operational and strategic flexibility for both FTD and
United Online and better position the companies to capitalize on their
well-recognized brands, while further enhancing stockholder value,” said Mark
R. Goldston, Chairman, President and Chief Executive Officer of United Online.
“We expect FTD to realize the benefits of being a pure-play, publicly-traded
international premier floral and gifts products and services company and to
continue to capitalize on the significant improvements we have made to the
business over the past five years. We are excited about FTD’s future as an
independent, publicly-traded company and are very grateful to the team at
United Online for the guidance and support they have provided since the
acquisition of FTD by United Online in August 2008,” said Robert S. Apatoff,
President of FTD.

Reverse Stock Split of United Online Shares of Common Stock

As stated above, immediately prior to the distribution, United Online will
effect a one-for-seven reverse stock split of United Online common stock.
United Online common stock will trade on a post-reverse stock split basis when
the NASDAQ stock market opens on November 1, 2013. As a result of this action,
every seven shares of United Online common stock will be converted into one
share of United Online common stock. United Online’s stockholders had
previously authorized United Online’s board of directors to implement the
reverse stock split at the September 5, 2013 special meeting of stockholders.

United Online stockholders will not receive fractional shares in connection
with the reverse stock split. Instead, the transfer agent will aggregate all
fractional shares and sell them as soon as practicable after the effective
time of the reverse stock split at the then-prevailing prices on the open
market, on behalf of those stockholders who would otherwise be entitled to
receive a fractional share. Stockholders will receive a cash payment from the
transfer agent in an amount equal to their respective pro rata shares of the
total net proceeds of that sale.

Distribution of FTD Shares to United Online Stockholders

As stated above, United Online stockholders of record as of the close of
business on October 10, 2013, the record date for the distribution, will
receive one  share of FTD common stock for every five shares of United Online
common stock they hold on the record date. For example, for every 35 shares of
United Online common stock that a United Online stockholder holds on the
October 10, 2013 record date, such stockholder would hold 7 shares of FTD
common stock and 5 shares of United Online common stock immediately following
the distribution and reverse stock split.

No action is required by United Online stockholders to receive the shares of
FTD common stock in the distribution. An information statement containing
details of the spin off and important information about FTD will be mailed to
United Online stockholders on or about October 4, 2013. Stockholders who hold
United Online common stock on the record date will receive a book-entry
account statement reflecting their ownership of FTD common stock or their
brokerage account will be credited with the FTD shares.

Fractional shares of FTD common stock will not be distributed to United Online
stockholders. Instead, the fractional shares of FTD common stock will be
aggregated and sold in the open market, with the net proceeds distributed pro
rata in the form of cash payments to United Online stockholders who would
otherwise hold FTD fractional shares.

United Online has received a favorable tax ruling from the U.S. Internal
Revenue Service approving the tax-free status of the spin off, and expects to
receive an opinion of counsel on the distribution date, November 1, 2013, that
the distribution of FTD common stock to United Online stockholders qualifies
as a tax-free distribution for U.S. Federal income tax purposes, except with
respect to cash received in lieu of fractional shares. Non-U.S. stockholders
may be subject to tax on the distribution in jurisdictions other than the U.S.
United Online stockholders are urged to consult their tax advisors regarding
the particular consequences of the distribution in their situation, including
the applicability and effect of any U.S. Federal, state, local, and foreign
tax laws.

Trading of United Online and FTD Common Stock

Beginning on or shortly before the October 10, 2013 record date and continuing
up to the distribution date of November 1, 2013, United Online expects that
its common stock will trade in two markets on NASDAQ: a “regular-way” market
and an “ex-distribution” market. A stockholder of record of shares of United
Online common stock as of the record date may choose to sell those shares in
the “regular-way” market after the close of business on the record date and up
to the distribution date, in which case the stockholder will also be selling
the right to receive shares of FTD common stock in the distribution. Shares of
United Online common stock that trade on the “regular-way” market will trade
under the ticker symbol “UNTD.” However, a stockholder of record of shares of
United Online common stock as of the record date may also choose to sell those
shares in the “ex-distribution” market after the close of business on the
record date and up to the distribution date, in which case the stockholder
will still receive the shares of FTD common stock that the stockholder would
be entitled to receive in the distribution because of the stockholder’s
ownership of United Online common stock. Shares of United Online common stock
that trade on the “ex-distribution” market will trade under the ticker symbol
“UNTDV.”

FTD common stock is expected to begin trading on a “when-issued” basis on
NASDAQ under the ticker symbol “FTDDV” on or shortly before the record date of
October 10, 2013. Beginning on the distribution date of November 1, 2013, any
“when-issued” trading with respect to FTD common stock will end, and
“regular-way” trading will begin under the ticker symbol “FTD.” Investors are
encouraged to consult with their financial advisers regarding the specific
implications of buying or selling United Online or FTD common stock prior to
the distribution date.

The completion of the FTD distribution is subject to the satisfaction or
waiver of a number of conditions, including the Registration Statement on Form
10 for the FTD common stock being declared effective by the Securities and
Exchange Commission, the FTD common stock being authorized for listing on
NASDAQ and certain other conditions described in the Information Statement
included in the Form 10 and in the agreements filed as exhibits to the Form
10. The condition relating to the authorization of the FTD common stock for
listing on NASDAQ has been satisfied, and the Securities and Exchange
Commission declared the Form 10 effective today. United Online and FTD expect
all other conditions to the FTD distribution to be satisfied on or before the
distribution date.

Post-Separation Dividend Policies of United Online and FTD

Following the separation, FTD currently intends to retain future earnings, if
any, to reinvest in the growth of its businesses and to make interest payments
on or pay down its debt, fund potential acquisitions and potentially
repurchase its common stock. As a result, FTD does not currently expect to pay
any cash dividends.

United Online currently expects to pay a dividend of $0.15 per share in the
fourth quarter of 2013 (after taking into account the one-for-seven reverse
stock split). Declaration and payment of such dividend and future dividends
will be at the discretion of the board of directors of United Online and will
depend on, among other things, United Online’s results of operations, cash
flow, cash requirements, investment opportunities, financial condition,
contractual and regulatory restrictions, and other factors that United
Online’s board of directors may deem relevant. Additionally, the board of
directors of United Online has extended the company’s previously-approved
$80,000,000 stock repurchase program through December 31, 2014.

About United Online^®

United Online, Inc. (Nasdaq: UNTD), through its operating subsidiaries, is a
leading provider of consumer products and services over the Internet, where
their respective brands have attracted a large online audience that includes
more than 100 million registered accounts worldwide. United Online’s FTD
segment provides floral-related products and services (FTD, Interflora, Flying
Flowers, and Flowers Direct) for consumers and retail florists, as well as
other retail locations offering floral and related products and services.
United Online’s Content & Media segment provides online nostalgia products and
services (Classmates and StayFriends) and online loyalty marketing (MyPoints).
Its primary Communications segment service is Internet access (NetZero and
Juno), including 4G mobile broadband (NetZero Wireless).

Cautionary Information Regarding Forward-Looking Statements

This press release contains “forward-looking statements” within the meaning of
applicable federal securities laws. These statements are made pursuant to the
safe harbor provisions of the Private Securities Litigation Reform Act of 1995
and generally include words such as “believes,” “expects,” “intends,”
“anticipates,” “estimates” and similar expressions. We can give no assurance
that any future results or events discussed in these statements will be
achieved. Any forward looking statements represent our views only as of today
and should not be relied upon as representing our views as of any subsequent
date. Readers are cautioned that such forward-looking statements are subject
to a variety of risks and uncertainties that could cause our actual results to
differ materially from the statements contained in this release. Such
forward-looking statements include, but are not limited to statements about
the separation of United Online into two independent, publicly-traded
companies; the terms, timing and effect of the separation on United Online,
its stockholders, customers and employees; the capitalization of United Online
and FTD; the future operational, strategic and financial flexibility of United
Online and FTD; other possible results of the distribution and reverse stock
split; and the post-separation dividend policies of United Online and FTD.
Many of these risks and uncertainties are based on factors that cannot be
controlled by United Online and include, but are not limited to (1) market
conditions in general and those applicable to the distribution and reverse
stock split; (2) factors affecting the expected timeline for completing our
separation into two public companies; (3) the effect our separation and the
reverse stock split may have on United Online’s stock price; (4) the risk that
the anticipated benefits from the distribution and reverse stock split may not
be fully realized or may take longer to realize than expected; (5) tax and
regulatory matters; and (6) changes in economic, competitive, strategic,
technological, regulatory or other factors that affect the operation of United
Online’s businesses. A detailed description of other risks and uncertainties
affecting United Online is contained in Item 1A of United Online’s 2012 Annual
Report on Form 10-K filed with the SEC on March 4, 2013, in Item 1A of FTD’s
Registration Statement on Form 10, as amended, initially filed with the SEC on
April 30, 2013, in Item 1A of United Online’s Quarterly Reports on Form 10-Q,
and in its other filings with the SEC. These filings are available for free on
the SEC’s website at www.sec.gov, and United Online’s filings are also
available for free on the company’s website at www.unitedonline.com. United
Online undertakes no obligation to publicly update any forward-looking
statement or risk factor, whether as a result of new information, future
events or otherwise.

Contact:

United Online, Inc.
Investors:
David Bigelow, 818-287-3560
dbigelow@corp.untd.com
or
Press:
Scott Matulis, 818-287-3388
pr@untd.com