Business Segments

12 Months Ended

Jun. 30, 2013

Business Segments

Business Segments

Note 15. Business Segments

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

· Consumer Floral;

· BloomNet Wire Service; and

· Gourmet Food and Gift Baskets; and

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), nor does it include depreciation and amortization, other income, and income taxes, or stock-based compensation, which is 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	June 30, 2013			July 1, 2012			July 3, 2011
				(in thousands)
Net revenues:
Consumer Floral	$	411,526		$	398,184		$	369,199
BloomNet Wire Service	81,822			82,582			73,282
Gourmet Food & Gift Baskets	243,225			228,002			219,174
Corporate (1)	789			773			1,150
Intercompany eliminations	(1,865		)	(2,024		)	(1,416		)
Total net revenues	$	735,497		$	707,517		$	661,389

	Years ended
Operating Income	June 30, 2013			July 1, 2012			July 3, 2011
				(in thousands)
Segment Contribution Margin:
Consumer Floral	$	47,193		$	39,147		$	32,669
BloomNet Wire Service	25,611			22,339			20,195
Gourmet Food & Gift Baskets (2)	20,345			30,193			28,544
Segment Contribution Margin Subtotal	93,149			91,679			81,408
Corporate (1)	(48,565		)	(48,412		)	(47,085		)
Depreciation and amortization	(18,798		)	(19,540		)	(20,237		)
Operating income	$	25,786		$	23,727		$	14,086

(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) GFGB segment contribution margin during the year ended July 1, 2012 includes a $3.8 million ($2.4mm, net of tax) gain on the sale of 17 Fannie May stores, which are being operated as franchised locations post-sale.