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Investor Relations: Press Release

Elizabeth Arden, Inc. Announces Third Quarter Fiscal 2009 Results

Net Sales of $203.5 million
Sales Decrease of 3.4%; Increase of 1.3% Excluding Impact
of Foreign Currency Translation

NEW YORK, May 7, 2009 (GLOBE NEWSWIRE) -- Elizabeth Arden, Inc. (Nasdaq:RDEN), a global prestige beauty products company, today announced financial results for its third fiscal quarter ended March 31, 2009.

THIRD QUARTER RESULTS

For the third fiscal quarter ended March 31, 2009, the Company reported net sales of $203.5 million, a decrease of 3.4%, as compared to the third quarter of the prior fiscal year. Excluding the unfavorable impact of foreign currency translation, net sales increased 1.3%. For the third fiscal quarter ended March 31, 2009, the net loss per diluted share was $0.13 as compared to a net loss per diluted share of $0.14 for the prior year period. Excluding restructuring and expenses associated with the Company's Global Efficiency Re-engineering project, the net loss per diluted share for the three months ended March 31, 2009 was $0.19 compared to a net loss per diluted share of $0.10 for the prior year period. A reconciliation between GAAP and adjusted results can be found in the tables and footnotes to this press release.

E. Scott Beattie, Chairman, President and Chief Executive Officer of Elizabeth Arden, Inc., commented, "Our North American fragrance business is tracking as we had anticipated. We are seeing modest improvement in retail sales performance and are continuing to build market share. This, however, is being offset by weak conditions in our travel retail and distributor markets, reflecting declining passenger traffic, retailer de-stocking and the impact of credit constraints and currency volatility on our distributors, which is expected to continue."

Mr. Beattie continued, "During the quarter, we made substantial progress toward achieving our working capital and cash flow goals, and continued to maintain a strong balance sheet with $55 million of availability under our credit facility at quarter end. We reduced inventories by $30 million during the quarter and are confident we will achieve our June 30, 2009 inventory targets of $350 million to $370 million as previously disclosed, which is expected to generate additional cash flow for this fiscal year. We are also continuing to invest in our key brands and franchises. The most recent fragrance launch, the Elizabeth Arden fragrance, Pretty, has exceeded our expectations thus far, ranking as the number one fragrance launch in U.S. department stores in 2009 through March, and we anticipate this fragrance will help drive global growth of the Elizabeth Arden brand."

NINE MONTHS RESULTS

For the nine months ended March 31, 2009, the Company reported net sales of $857.7 million, a decrease of 5.2%, or 2.3% excluding the unfavorable impact of foreign currency translation, as compared to the prior year period. Net income per diluted share, excluding expenses and non-cash charges related to the Liz Claiborne license agreement, restructuring expenses and expenses associated with the Company's Global Efficiency Re-engineering project, was $0.53 as compared to net income per diluted share, excluding restructuring expenses, of $1.09 for the prior year period. On a reported basis, the net loss per diluted share was $0.09 for the nine months ended March 31, 2009, as compared to net income of $1.04 per diluted share for the nine months ended March 31, 2008.

OUTLOOK

The Company's guidance for the fiscal year ending June 30, 2009 is for net sales to decline by 6% to 6.5%, or by 2% to 2.5% excluding an expected unfavorable impact from foreign currency translation, as compared to the prior year period. Earnings per diluted share are expected to be in the range of $0.38 to $0.50. This guidance is based on continued expectations of weakness in the Company's international markets, particularly its higher margin travel retail and distributor markets as well as its European business, which markets are experiencing a rapid rise in unemployment and a sharp contraction of their economies. The guidance includes an incremental impact of unfavorable foreign currency rates of $.04 per diluted share as compared to the currency rates assumed in the Company's February 2009 guidance.

The fiscal 2009 guidance assumes April 2009 foreign currency rates and excludes expenses and non-cash charges related to the Liz Claiborne license agreement and restructuring and expenses associated with the Company's Global Efficiency Re-engineering project. The Company does not anticipate incurring any further expenses associated with the Liz Claiborne license agreement during the fourth quarter of fiscal 2009. The Company further notes that the high degree of on-going global economic uncertainty and foreign currency volatility may continue to have a negative effect on retailer and consumer confidence and demand, making forecasting difficult. The Company believes that net sales and earnings guidance excluding the impact of foreign currency and expenses and non-cash charges associated with the Liz Claiborne license agreement and restructuring and other expenses associated with the Company's Global Efficiency Re-engineering project, 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 "Corporate Info" 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 May 22, 2009.

Elizabeth Arden is a global prestige beauty products company with an extensive portfolio of prestige beauty brands sold in over 90 countries. The company's brand portfolio includes Elizabeth Arden skincare, color, and fragrance products, PREVAGE(r) anti-aging treatments, the celebrity fragrance brands of Elizabeth Taylor, Mariah Carey, Britney Spears, Hilary Duff, Danielle Steel, and Usher; the designer fragrance brands of Juicy Couture, Alberta Ferretti, Alfred Sung, Badgley Mischka, Bob Mackie, GANT, Geoffrey Beene, Liz Claiborne, Halston, Lucky Brand, Nanette Lepore 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          Nine Months Ended
                    -----------------------     ----------------------
                    March 31,     March 31,     March 31,     March 31,
                      2009          2008          2009          2008
                    ---------     ---------     ---------     --------
 Net Sales          $ 203,471     $ 210,554     $ 857,663     $904,786
 Cost of Sales        115,796       119,800       511,962      528,792
                    ---------     ---------     ---------     --------
 Gross Profit          87,675        90,754       345,701      375,994
 Gross Profit
  Percentage             43.1%         43.1%         40.3%        41.6%

 Selling, General
  and Administrative
  Expenses             86,398        83,004       316,123      294,837
 Depreciation and
  Amortization          6,392         6,298        19,205       18,461
                    ---------     ---------     ---------     --------
 Total Operating
  Expenses             92,790        89,302       335,328      313,298

 Interest Expense,
  Net                   5,643         6,067        19,244       21,821
                    ---------     ---------     ---------     --------

 (Loss) Income
  Before Income
  Taxes               (10,758)       (4,615)       (8,871)      40,875
 (Benefit from)
  Provision for
  Income Taxes         (7,054)         (803)       (6,317)      10,538
                    ---------     ---------     ---------     --------

 Net (Loss) Income  $  (3,704)    $  (3,812)    $  (2,554)   $  30,337
                    =========     =========     =========    =========



 As reported:
 -----------
   Net (Loss)
    Income Per
    Basic Share     $   (0.13)    $   (0.14)    $   (0.09)   $    1.08
   Net (Loss)
    Income Per
    Diluted Share   $   (0.13)    $   (0.14)    $   (0.09)   $    1.04

   Basic Shares        27,805        27,894        27,901       27,961
   Diluted Shares      27,805        27,894        27,901       29,292

   EBITDA(a)        $   1,277     $   7,750     $  29,578    $  81,157
   EBITDA margin(a)       0.6%          3.7%          3.4%         9.0%

 Adjusted to
  exclude the
  effect of Liz
  Claiborne-
  related,
  restructuring
  and software
  implementation
  expenses, net of
  taxes (b)(c)(d):
  ---------------

   Gross Profit     $  87,675     $  90,754     $ 365,627     $375,994
   Gross Profit
    Percentage           43.1%         43.1%         42.6%        41.6%

   Net (Loss)
    Income          $  (5,293)    $  (2,881)    $  15,213     $ 31,877

   Net (Loss)
    Income Per
    Basic Share     $   (0.19)    $   (0.10)    $    0.55    $    1.14
   Net (Loss)
    Income Per
    Diluted Share   $   (0.19)    $   (0.10)    $    0.53    $    1.09

    EBITDA(a)       $   3,427     $   8,878     $  57,893     $ 83,231
    EBITDA
     margin(a)            1.7%          4.2%          6.8%         9.2%


 (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 Liz  Claiborne-related, restructuring  and  software
     implementation  expenses  related to our Global Efficiency
     Re-engineering initiative.  This disclosure is being provided
     for comparability purposes because we believe it is meaningful to
     our inventors and other interested parties to understand the
     EBITDA  performance  of the Company on a consistent  basis without
     regard to the effect of Liz Claiborne-related, restructuring and
     other software  implementation  expenses.  EBITDA margin
     represents  EBITDA divided by Net Sales.

     The table below  reconciles net (loss) 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          Nine Months Ended
                    -----------------------    -----------------------
                    March 31,     March 31,     March 31,    March 31,
                      2009          2008          2009         2008
                    ---------    ---------     ----------    ---------
 Net (loss) income   $ (3,704)   $  (3,812)    $   (2,554)   $  30,337
 Plus:
   (Benefit from)
    provision for
    income taxes       (7,054)        (803)        (6,317)      10,538
   Interest
    expense, net        5,643        6,067         19,244       21,821
   Depreciation
    and amortization    6,392        6,298         19,205       18,461
                    ---------    ---------     ----------    ---------
 EBITDA                 1,277        7,750         29,578       81,157
 Liz Claiborne-
  related
  expenses(c)              --           --         23,314           --
 Restructuring and
  other expenses(d)     2,150        1,128          5,001        2,074
                    ---------    ---------     ----------    ---------
 EBITDA as
  adjusted           $  3,427    $   8,878      $  57,893    $  83,231
                    =========    =========     ==========    =========

 (b) The table below reconciles  the  calculation of (i) gross profit,
     (ii) net  (loss)  income  and (iii) net (loss) income per share
     on a basic and diluted basis from the amounts  reported in
     accordance  with GAAP to such amounts  before giving  effect to
     Liz Claiborne  related, restructuring and software implementation
     expenses. This disclosure is being  provided for  comparability
     purposes  because we believe it is meaningful to our investors
     and other interested parties to understand the Company's operating
     performance  on a consistent basis without regard to the effect
     of Liz  Claiborne-related,  restructuring  and software
     implementation  expenses. The presentation in the table below of
     the non-GAAP information titled "Gross profit as adjusted" and
     "Net (loss)  income  as  adjusted" and "Net (loss) income per
     basic and diluted  share as adjusted" is not meant to be
     considered in isolation or as a substitute  for gross profit,
     net (loss) income or net (loss) income per basic and diluted
     share prepared in accordance with GAAP.




 (in thousands, except per share data)

                       Three Months Ended         Nine Months Ended
                   ------------------------    -----------------------
                    March 31,     March 31,     March 31,    March 31,
                      2009           2008         2009        2008
                   ----------     ---------    ----------   ----------


 Adjusted to exclude
  the effect of
  Liz Claiborne-related,
  restructuring and
  software
  implementation
  expenses:
 ----------------------

 Gross Profit:
 -------------
   Gross profit
    as reported     $  87,675     $  90,754    $  345,701   $  375,994
   Liz Claiborne
    -related
    expenses (c)           --            --        19,926           --
                   ----------     ---------    ----------   ----------
   Gross profit
    as adjusted     $  87,675     $  90,754    $  365,627   $  375,994
                   ==========     =========    ==========   ==========


 Net (Loss) Income
  (e):
 -----------------
   Net (loss)
    income as
    reported        $  (3,704)    $  (3,812)   $   (2,554)  $   30,337
   Liz Claiborne
    -related
    expenses, net
    of taxes(c)            --            --        14,628           --
   Restructuring
    and other
    expenses, net
    of taxes(d)        (1,589)          931         3,139        1,540
                   ----------     ---------    ----------   ----------
   Net (loss)
    income as
    adjusted        $  (5,293)    $  (2,881)   $   15,213   $   31,877
                   ==========     =========    ==========   ==========


 Net (Loss) Income
  Per Basic Share(e):
 --------------------
   Net (loss)
    income per
    basic share
    as reported     $   (0.13)    $   (0.14)   $    (0.09)  $     1.08
   Liz Claiborne
    -related,
    restructuring
    and other
    expenses,
    net of
    tax(c)(d)           (0.06)         0.04          0.64         0.06
                   ----------     ---------    ----------   ----------
   Net (loss)
    income per
    basic share
    as adjusted    $    (0.19)    $   (0.10)   $     0.55   $     1.14
                   ==========     =========    ==========   ==========

 Net (Loss) Income
  Per Diluted Share (e):
 -----------------------
   Net (loss)
    income per
    diluted share
    as reported    $    (0.13)    $   (0.14)   $    (0.09)  $     1.04
   Liz Claiborne
    -related,
    restructuring
    and other
    expenses, net
    of tax(c)(d)        (0.06)         0.04          0.62         0.05
                   ----------     ---------    ----------   ----------
   Net (loss)
    income per
    diluted share
    as adjusted    $    (0.19)    $   (0.10)   $     0.53   $     1.09
                   ==========     =========    ==========   ==========

 (c) For the nine months ended March 31, 2009, includes $4.4 million
     of Liz  Claiborne  transition  expenses and $18.9 million of
     non-cash expenses relating to the Liz  Claiborne inventory
     purchased by the Company at a higher cost prior to the effective
     date of the license agreement. For the nine months ended
     March 31, 2009,  also  includes  $1.0 million of Liz Claiborne
     transition  expenses in cost of sales. For the nine months ended
     March 31, 2009, diluted shares were assumed  to be 28,591,323,
     which include 690,478  potential common shares had the Company
     had net income.

 (d) For the three months ended March 31, 2009, restructuring and
     other expenses includes $1.0 million related to implementation of
     our Oracle accounting  and order  processing  systems and $1.1 of
     restructuring expenses related to our Global Efficiency
     Re-engineering  initiative. In addition, the three months ended
     March 31, 2009 and 2008  includes $0.1 million and $1.1 million
     of  restructuring  expenses that are not related to our Global
     Efficiency  Re-engineering  initiative. For the nine months ended
     March 31, 2009, restructuring and other  expenses includes  $1.7
     million related to implementation  of  our  Oracle accounting
     and order processing systems and $2.3 million of restructuring
     expenses related to our Global Efficiency Re-engineering
     initiative. In addition, the nine months ended March 31, 2009 and
     2008 include $1.0 million and $2.1 million,  respectively, of
     restructuring expenses that are not related to our Global
     Efficiency  Re-engineering  initiative.

 (e) On a reported basis, for the three and nine months ended March
     31, 2009,  our effective tax rate,  which is calculated as a
     percentage of the loss before income taxes, was 65.6% and 71.2%,
     respectively. On an adjusted basis, for the three and nine months
     ended March 31, 2009, our  effective  tax  rate  was  38.5%  and
     21.8%, respectively. The difference in the effective tax rates is
     primarily due to the Liz Claiborne-related expenses that were
     incurred in the U.S. in the first half of fiscal 2009.



                           SEGMENT NET SALES

 The table below is a  comparative  summary of our net sales by
 reportable segment for the three and nine months ended March 31, 2009
 and 2008:

 (In thousands)        Three Months Ended         Nine Months Ended
                   ------------------------    -----------------------
                    March 31,     March 31,     March 31,   March 31,
                      2009          2008          2009         2008
                   ----------    ----------    ----------   ----------

 Segment Net Sales:
   North America
    Fragrance      $  120,056    $  114,481    $  545,804   $  552,682
   International       75,210        85,711       281,135      308,789
   Other                8,205        10,362        30,724       43,315
                   ----------    ----------    ----------   ----------
 Total             $  203,471    $  210,554    $  857,663   $  904,786
                   ==========    ==========    ==========   ==========




              ELIZABETH ARDEN, INC. AND SUBSIDIARIES
                CONSOLIDATED BALANCE SHEET DATA
                         (Unaudited)
                        (In thousands)


                                   March 31,    June 30,     March 31,
                                     2009         2008          2008
                                  ----------  ----------    ----------
 Cash                             $  17,255   $   26,396    $   28,392
 Accounts Receivable, Net           205,127      217,446       222,634
 Inventories                        360,973      408,563       340,037
 Property and Equipment, Net         57,419       52,148        44,566
 Exclusive Brand Licenses,
  Trademarks and Intangibles, Net   217,688      221,253       223,284
 Total Assets                       915,616      970,734       903,767
 Short-Term Debt                    128,200      119,000        97,800
 Current Portion of Long-Term Debt      503        1,261         1,292
 Current Liabilities                341,731      385,062       307,488
 Long-Term Liabilities              236,496      249,071       254,775
 Total Debt                         351,996      343,957       322,752
 Shareholders' Equity               337,389      336,601       341,504
 Working Capital                    293,164      306,735       322,621

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," "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, inventory reductions and cash flows, and the costs, savings and benefits we expect in connection with our re-engineering project 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:

  • factors affecting our relationships with our customers or our customers' businesses, including the absence of contracts with customers, our customers' financial condition, and changes in the retail, fragrance and cosmetic industries, such as the consolidation of retailers and the associated closing of retail doors as well as retailer inventory control practices, including, but not limited to levels of inventory carried at point of sale and practices used to control inventory shrinkage;


  • our reliance on third-party manufacturers for substantially all of our owned and licensed products and our absence of contracts with suppliers of distributed brands and components for manufacturing of owned and licensed brands;


  • delays in shipments, inventory shortages and higher costs of production due to the loss of or disruption in our distribution facilities or at key third party manufacturing or fulfillment facilities that manufacture or provide logistic services for our products;


  • our ability to respond in a timely manner to changing consumer preferences and purchasing patterns and other international and domestic conditions and events that impact consumer confidence and demand, such as the current economic downturn;


  • our ability to protect our intellectual property rights;


  • the success, or changes in the timing or scope, of our new product launches, advertising and merchandising programs;


  • the quality, safety and efficacy of our products;


  • the impact of competitive products and pricing;


  • risks of international operations, including foreign currency fluctuations, hedging activities, economic and political consequences of terrorist attacks, unfavorable changes in U.S. or international tax laws or regulations, diseases and pandemics and political instability in certain regions of the world;


  • our ability to (i) implement our growth strategy and acquire or license additional brands or secure additional distribution arrangements, (ii) successfully and cost-effectively integrate acquired businesses or new brands, such as the Liz Claiborne fragrance brands, and (iii) finance our growth strategy and our working capital requirements;


  • our level of indebtedness, our ability to realize sufficient cash flow from operations to meet our debt service obligations and working capital requirements and the restrictive covenants in our revolving credit facility and the indenture for our 7 3/4% senior subordinated notes;


  • changes in product mix to less profitable products;


  • the retention and availability of key personnel;


  • changes in the legal, regulatory and political environment that impact, or will impact, our business, including changes to customs or trade regulations or accounting standards or critical accounting estimates;


  • the success of, and costs associated with, our re-engineering project and related restructuring plan;


  • the potential for significant impairment charges relating to our trademark, goodwill or other long-lived assets that could result from a number of factors, including downward pressure on our stock price;


  • the potential for significant impairment charges relating to our trademark, goodwill or other long-lived assets that could result from a number of factors, including downward pressure on our stock price; and


  • other unanticipated risks and uncertainties.

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, 2008 and our Quarterly Report on Form 10-Q for the period ended December 31, 2008.

CONTACT: Elizabeth Arden, Inc.
Marcey Becker, Senior Vice President, Finance
(203) 462-5809

Fox Integrated Corporate Relations
Investor/Press Contact:
Allison Malkin
Michael Fox
(203) 682-8200