Business Segments

12 Months Ended

Jul. 01, 2012

Business Segments

Business Segments

Note 15. 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; and

        On September 6, 2011, the Company, through its Winetasting Network subsidiary, completed the sale of certain assets of its wine fulfillment services business, which was previously included within its Gourmet Foods & Gift Baskets segment. During the first quarter fourth quarter of fiscal 2009, the Company made the strategic decision to divest its Home & Children's Gifts business segment to focus on its core Consumer Floral, BloomNet Wire Service and Gourmet Foods & Gift Baskets segments. On January 25, 2010, the Company completed the sale of these businesses. Consequently, the Company has classified the results of operations of its Home & Children's Gifts segment, and its wine fulfillment services business as discontinued operations for all periods presented.

        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 the effect of corporate overhead (see (1) below), which are operated under a centralized management platform, providing services throughout the organization, nor does it include depreciation and amortization, other income, and income taxes, or stock-based compensation and severance and restructuring costs, both of which are included within corporate overhead. Assets and liabilities are reviewed at the consolidated level by management and not accounted for by segment.

	Years ended
Net revenues	July 1, 2012			July 3, 2011			June 27, 2010
	(in thousands)
Net revenues:
Consumer Floral	$	398,184		$	369,199		$	366,516
BloomNet Wire Service		82,582			73,282			61,883
Gourmet Food & Gift Baskets		236,742			229,390			225,602
Corporate(1)		773			1,150			1,071
Intercompany eliminations		(2,024	)		(1,416	)		(1,702	)
Total net revenues	$	716,257		$	671,605		$	653,370

	Years ended
Operating Income	July 1, 2012			July 3, 2011			June 27, 2010
	(in thousands)
Segment Contribution Margin:
Consumer Floral	$	39,147		$	32,669		$	22,141
BloomNet Wire Service		22,339			20,195			19,051
Gourmet Food & Gift Baskets(2)		29,789			27,776			27,145
Segment Contribution Margin Subtotal		91,275			80,640			68,337
Corporate(1)		(48,490	)		(47,255	)		(43,353	)
Depreciation and amortization		(19,576	)		(20,271	)		(20,287	)
Operating income (loss)	$	23,209		$	13,114		$	4,697

(1)

Corporate expenses consist of the Company's enterprise shared service cost centers, and include, among other items, Information Technology, Human Resources, Accounting and Finance, Legal, Executive and Customer Service Center functions, as well as Stock-Based Compensation. 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, as they are not directly allocable to a specific segment.

(2)

Segment contribution margin, during the year ended July 1, 2012, includes a $3.8 million gain on the sale of 17 Fannie May retail stores, which are being operated as franchised locations post-sale.