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| Elizabeth Arden, Inc. Announces First Quarter Fiscal 2011 Results |
NEW YORK, Nov. 4, 2010 (GLOBE NEWSWIRE) -- Elizabeth Arden, Inc. (Nasdaq:RDEN), a global prestige beauty products company, today announced financial results for its first fiscal quarter ended September 30, 2010. FIRST QUARTER RESULTS For the quarter ended September 30, 2010, the Company reported net sales of $284.8 million, an increase of 7.4%, as compared to the first quarter of the prior fiscal year. Excluding the unfavorable impact of foreign currency translation, net sales increased by 8.1%. Net income per diluted share for the quarter ended September 30, 2010 was $0.17, as compared to net income per diluted share of $0.00 for the prior year period. Excluding expenses associated with the Company's Global Efficiency Re-engineering initiative, net income per diluted share for the three months ended September 30, 2010 was $0.18. For the prior year period, net income per diluted share excluding Global Efficiency Re-engineering and restructuring expenses was $0.05. A reconciliation between GAAP and adjusted results can be found in the tables and footnotes at the end of this press release. E. Scott Beattie, Chairman, President and Chief Executive Officer of Elizabeth Arden, Inc., commented, "Through the first quarter, our business overall performed as we expected. Sales and earnings results were ahead of prior guidance, driven primarily by continued strong momentum in our international business. In constant currencies, net sales of our international business increased by 14%, with sales in Europe and our travel retail and distributor markets increasing by 14% and 31%, respectfully. Our net sales in North America rose by 6%." Mr. Beattie continued, "We are pleased with the performance of our brands and the progress we are making with our global brand marketing initiatives. Sales of Elizabeth Arden branded skin care products rose by 12% in the first quarter, and sales of our fragrance business grew by 8.0% overall and 17% in Europe. As we head into the holiday period, we are encouraged and expect our key brands and launches to perform well." OUTLOOK For the second quarter of fiscal 2011, the Company is introducing guidance for net sales of $393 million to $403 million and net income per diluted share of $0.90 to $1.00. The Company is raising its annual net sales guidance for the fiscal year ending June 30, 2011 to a net sales increase of 3.5% to 4.5%, as compared to the prior fiscal year, and confirming its earnings guidance of a range of $1.15 to $1.25 per diluted share. The current annual net sales guidance assumes minimal impact from foreign currency translation. The Company also continues to expect gross margins to increase by 225 to 250 basis points for fiscal 2011 as compared to fiscal 2010, and cash flow from operations for fiscal 2011 to be in the range of $70 million to $80 million. The guidance assumes October foreign currency rates and excludes expenses associated with the Company's Global Efficiency Re-engineering initiative. The Company notes that continued global economic uncertainty may have a negative effect on retailer and consumer confidence and demand, and, along with the foreign currency volatility, makes forecasting difficult. The Company believes that net sales and earnings guidance, excluding the impact of foreign currency translation beyond assumed rates, and expenses associated with the Company's Global Efficiency Re-engineering initiative, as applicable, facilitates period to period comparisons of the Company's operating and financial performance on a consistent basis. CONFERENCE CALL INFORMATION The Company will host a conference call today at 9:30 a.m. Eastern Time. All interested parties can listen to a live web cast of the Company's conference call by visiting the Investor Relations section on the Company's web site at http://www.elizabetharden.com. An online archive of the broadcast will be available within one hour of the completion of the call and will be accessible on the Company's web site until December 4, 2010. Elizabeth Arden is a global prestige beauty products company with an extensive portfolio of prestige beauty brands sold in over 100 countries. The company's brand portfolio includes Elizabeth Arden skincare, color, and fragrance products, PREVAGE(R) anti-aging treatment, the celebrity fragrance brands of Britney Spears, Elizabeth Taylor, Mariah Carey, Hilary Duff, and Usher; the designer fragrance brands of Juicy Couture, Alberta Ferretti, Alfred Sung, Badgley Mischka, Bob Mackie, Geoffrey Beene, Halston, John Varvatos, Kate Spade, Lucky Brand, and Rocawear; and the lifestyle fragrance brands Curve, Giorgio Beverly Hills, and PS Fine Cologne. ELIZABETH ARDEN, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS DATA
(Unaudited)
(In thousands, except percentages and per share data)
Three Months Ended
--------------------
September September
30, 30,
2010 2009
--------- ---------
Net Sales $284,821 $265,164
Cost of Goods Sold:
Cost of Sales 155,088 148,277
Depreciation Related to Cost of
Goods Sold 1,325 1,267
--------- ---------
Total Cost of Goods Sold 156,413 149,544
Gross Profit 128,408 115,620
Gross Profit Percentage 45.1% 43.6%
Selling, General and
Administrative Expenses 109,822 103,943
Depreciation and Amortization 6,287 6,009
--------- ---------
Total Operating Expenses 116,109 109,952
Interest Expense, Net 5,331 5,611
--------- ---------
Income Before Income Taxes 6,968 57
Provision for Income Taxes 2,081 17
--------- ---------
Net Income $4,887 $40
========= =========
As reported:
Net Income Per Basic Share $0.18 $0.00
Net Income Per Diluted Share $0.17 $0.00
Basic Shares 27,027 27,922
Diluted Shares 27,964 28,484
EBITDA (a) $19,911 $12,944
EBITDA margin (a) 7.0% 4.9%
Adjusted to exclude the effect of
restructuring and other
expenses, net of taxes (b)(c):
---------------------------------
Net Income $5,064 $1,453
Net Income Per Basic Share $0.19 $0.05
Net Income Per Diluted Share $0.18 $0.05
EBITDA (a) $20,172 $14,960
EBITDA margin (a) 7.1% 5.6%
(a) EBITDA is defined as net income plus the provision for income taxes (or net loss less the benefit from income taxes), plus interest expense, plus depreciation and amortization. EBITDA should not be considered as an alternative to income (loss) from operations or net income (loss) (as determined in accordance with generally accepted accounting principles (GAAP)) as a measure of our operating performance or to net cash provided by operating, investing and financing activities (as determined in accordance with GAAP) or as a measure of our ability to meet cash needs. We believe that EBITDA is a measure commonly reported and widely used by investors and other interested parties as a measure of a company's operating performance and debt servicing ability because it assists in comparing performance on a consistent basis without regard to capital structure, depreciation and amortization or non-operating factors (such as historical cost). Accordingly, as a result of our capital structure, we believe EBITDA is a relevant measure. This information has been disclosed here to permit a more complete comparative analysis of our operating performance relative to other companies and of our debt servicing ability. EBITDA may not, however, be comparable in all instances to other similar types of measures. We have also disclosed EBITDA as adjusted to reflect the effect of restructuring and software implementation costs related to our Global Efficiency Re-engineering initiative and other restructuring costs. This disclosure is being provided for comparability purposes because we believe it is meaningful to our inventors and other interested parties to understand our EBITDA performance on a consistent basis without regard to the effect of restructuring and other expenses. EBITDA margin represents EBITDA divided by Net Sales. The table below reconciles net income, as determined in accordance with GAAP, to EBITDA and to EBITDA as adjusted: (For a reconciliation of net income to EBITDA for prior periods, see the Company's filings with the Securities and Exchange Commission which can be found on the Company's website at www.elizabetharden.com.)
(In thousands) Three Months Ended
--------------------
September September
30, 30,
2010 2009
--------- ---------
Net income $4,887 $40
Plus:
Provision for income taxes 2,081 17
Interest expense, net 5,331 5,611
Depreciation related to cost of
goods sold 1,325 1,267
Depreciation and amortization 6,287 6,009
--------- ---------
EBITDA 19,911 12,944
Restructuring and other expenses
(c) 261 2,016
--------- ---------
EBITDA as adjusted $20,172 $14,960
========= =========
(b) The table below reconciles the calculation of (i) net income and (ii) net income per share on a basic and diluted basis from the amounts reported in accordance with GAAP to such amounts before giving effect to restructuring and Global Efficiency Re-engineering expenses. This disclosure is being provided for comparability purposes because we believe it is meaningful to our investors and other interested parties to understand our operating performance on a consistent basis without regard to the effect of restructuring and Global Efficiency Re-engineering expenses. The presentation in the table below of the non-GAAP information titled "Net income as adjusted" and "Net income per basic and diluted share as adjusted" is not meant to be considered in isolation or as a substitute for net income or net income per basic and diluted share prepared in accordance with GAAP.
(In thousands, except per share data) Three Months Ended
--------------------
September September
30, 30,
2010 2009
--------- ---------
Adjusted to exclude the effect of restructuring and other expenses
Net Income:
--------------------------------------------------------------------------
Net income as reported $4,887 $40
Restructuring and other expenses, net of tax (c) (d) 177 1,413
--------- ---------
Net income as adjusted $5,064 $1,453
========= =========
Net Income Per Basic Share:
--------------------------------------------------------------------------
Net income per basic share as reported $0.18 $0.00
Restructuring and other expenses, net of tax (c) (d) 0.01 0.05
--------- ---------
Net income per basic as adjusted $0.19 $0.05
========= =========
Net Income Per Diluted Share:
---------------------------------------------------------------------------
Net income per diluted share as reported $0.17 $0.00
Restructuring and other expenses,
net of tax (c) (d) 0.01 0.05
--------- ---------
Net income per basic as adjusted $0.18 $0.05
========= =========
(c) For the three months ended September 30, 2010, includes $0.3 million related to the implementation of our Oracle accounting and order processing systems. For the three months ended September 30, 2009, includes $0.7 million related to the implementation of our Oracle accounting and order processing systems, $0.9 million of restructuring expenses related to our Global Efficiency Re-engineering initiative and $0.4 million of restructuring expenses not related to our Global Efficiency Re-engineering initiative. (d) On a reported basis, for the three months ended September 30, 2010 and 2009, our effective tax rate, which is calculated as a percentage of income before income taxes, was 29.9% and 31.2%, respectively. On an adjusted basis, for the three months ended September 30, 2010 and 2009, our effective tax rate was 30.0% and 29.9%, respectively. SEGMENT NET SALES
% Increase
(In thousands) Three Months Ended (Decrease)
-------------------- --------------------
September September Constant
30, 30, Rates
2010 2009 GAAP (e)
--------- --------- ---------- --------
Segment Net Sales:
North America $190,002 $179,936 5.6% 5.3%
International 94,819 85,228 11.3% 14.0%
--------- --------- ---------- --------
Total $284,821 $265,164 7.4% 8.1%
========= ========= ========== ========
(e) Constant currency information compares results between periods assuming exchange rates had remained constant period-over-period and excludes gains and losses from foreign currency contracts. We calculate constant currency information by translating current-period results using prior-year GAAP foreign currency exchange rates. Gains and losses associated with foreign currency contracts for the first quarter of fiscal 2010 included in net sales for the international segment were immaterial. ELIZABETH ARDEN, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET DATA
(Unaudited)
September June September
30, 30, 30,
(In thousands) 2010 2010 2009
--------- ------- ---------
Cash $23,579 $26,881 $23,495
Accounts Receivable, Net 253,505 170,067 269,611
Inventories 348,416 271,058 353,268
Property and Equipment,
Net 75,083 76,583 64,359
Exclusive Brand
Licenses, Trademarks
and Intangibles, Net 190,905 179,444 206,263
Goodwill 21,054 21,054 21,054
Total Assets 1,015,816 843,471 1,002,491
Short-Term Debt 174,000 59,000 184,900
Current Liabilities 428,055 253,870 425,081
Long-Term Liabilities 232,040 236,984 237,311
Total Debt 392,773 277,699 408,341
Shareholders' Equity 355,721 352,617 340,099
Working Capital 294,904 306,524 289,601
SUPPLEMENTARY CASH FLOW INFORMATION
(Unaudited)
(In thousands)
Three Months Ended
--------------------
September September
30, 30,
2010 2009
--------- ---------
Net cash used in operating activities $(93,366) $(59,901)
Net cash used in investing activities (19,336) (9,159)
Net cash provided by financing activities 108,393 68,971
Net (decrease) increase in cash and cash
equivalents (3,302) 393
In connection with the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, Elizabeth Arden, Inc. is hereby providing cautionary statements identifying important factors that could cause our actual results to differ materially from those projected in forward-looking statements (as defined in such act). Any statements that are not historical facts and that express, or involve discussions as to, expectations, beliefs, plans, objectives, assumptions or future events or performance (often, but not always, indicated through the use of words or phrases such as "will likely result," "are expected to," "will continue," "is anticipated," "should," "estimated," "intends," "plans," "believes" and "projects") may be forward-looking and may involve estimates and uncertainties which could cause actual results to differ materially from those expressed in the forward-looking statements. These statements include, but are not limited to, our guidance and expectations regarding net sales, earnings, gross margins, operating cash flow and returns on invested capital, and the costs, savings and benefits we expect in connection with our Global Efficiency Re-engineering initiative and related restructuring plan. In addition, any such statements are qualified in their entirety by reference to, and are accompanied by, the following key factors that have a direct bearing on our results of operations:
We caution that the factors described herein could cause actual results to differ materially from those expressed in any forward-looking statements we make and that investors should not place undue reliance on any such forward-looking statements. Further, any forward-looking statement speaks only as of the date on which such statement is made, and we undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date on which such statement is made or to reflect the occurrence of anticipated or unanticipated events or circumstances. New factors emerge from time to time, and it is not possible for us to predict all of such factors. Further, we cannot assess the impact of each such factor on our results of operations or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. This press release is qualified in its entirety by the cautionary statements and risk factor disclosure contained in our Securities and Exchange Commission filings, including our Annual Report on Form 10-K for the year ended June 30, 2010. This news release was distributed by GlobeNewswire, www.globenewswire.com SOURCE: Elizabeth Arden, Inc. CONTACT: Elizabeth Arden, Inc. |
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