United Online Inc. late Wednesday said that its board has approved a preliminary plan to spin off its FTD floral delivery service into a separate public company.
The Woodland Hills company said that the proposed spin-off of FTD likely will take the form of a tax-free pro-rata distribution of shares to United Online stockholders.
FTD would include the operations of the FTD and Interflora brands, which include a network of about 40,000 floral shops worldwide that deliver flowers and other gifts ordered online. United Online would continue separately as the operator of the company's other businesses, including the Memory Lane school alumni social networking site and its legacy NetZero and Juno Internet access services.
United Online said it may also eventually spin off its content operations and retain only its internet access services. In addition to Memory Lane, its other content brands include the Classmates, SchoolFeed and MyPoints sites.
The company, which has seen its stock price slide 19 percent since the beginning of the year, has retained L.A. investment bank Moelis & Company LLC as an advisor on the FTD deal and for a strategic review. The FTD spin-off could be completed by the first quarter of next year.
“While the breadth and strength of our businesses has for many years served our stockholders well, we believe that it currently is in the best interests of United Online and its stockholders to separate these distinct businesses," said Chief Executive Mark Goldston in a statement.
United Online separately reported a second-quarter profit of $8.5 million (9 cents a share), 42 percent lower than in the same period a year earlier. Revenue fell 9.3 percent to $232 million. Adjusted profit was 30 cents a share. The Wall Street consensus was for adjusted profit of 13 cents on revenue of $232 million.
In Thursday midday trading, shares were up 89 cents, or 21 percent, to $5.09 on the Nasdaq.