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Investor Relations: Press Release
| Elizabeth Arden, Inc. Announces Third Quarter Fiscal 2012 Results |
NEW YORK, NY, May 03, 2012 (MARKETWIRE via COMTEX) --Elizabeth Arden, Inc. (NASDAQ: RDEN), a global prestige beauty products company, today announced financial results for its third fiscal quarter ended March 31, 2012. THIRD QUARTER RESULTS For the quarter ended March 31, 2012, the Company reported net sales of $239.3 million, an increase of 3.5%, as compared to the third quarter of the prior fiscal year. Excluding the unfavorable impact of foreign currency translation, net sales increased by 3.9%. Net income per diluted share for the quarter ended March 31, 2012, was $0.07, as compared to a net loss per diluted share of $0.12 for the prior year period. For the prior year period, net income per diluted share was $0.02, excluding debt extinguishment charges associated with the Company's debt refinancing completed in the third quarter of the prior fiscal year. A reconciliation between GAAP and adjusted results can be found in the tables and footnotes at the end of this press release. Net sales for the Company's international segment in the current quarter increased by 6.3%, or by 7.1% at constant rates, over the prior year period, and net sales in the Company's North America segment grew by 1.7%. Gross margin in the current quarter increased by 50 basis points to 50%. Mr. Beattie commented, "Overall results were in line with our expectations. In anticipation of the roll-out of the newly packaged and reformulated products associated with the Elizabeth Arden brand repositioning, there has been a reduced pipeline of innovation of Elizabeth Arden products this quarter. We continue to make considerable progress toward this initiative, which we believe will be transformational for our Company. We are on schedule to accomplish the rapid conversion of approximately 50 flagship customer doors by the end of September 2012, with a broader group of our customer doors to follow." NINE MONTHS RESULTS For the nine months ended March 31, 2012, the Company reported net sales of $972.7 million, an increase of 5.5%, as compared to the prior year period. Excluding the favorable impact of foreign currency translation, net sales increased by 4.5%. Net income per diluted share was $1.79, as compared to net income per diluted share of $1.24 for the nine months ended March 31, 2011. For the prior year period, net income per diluted share was $1.39, excluding debt extinguishment charges and expenses associated with the Company's Global Efficiency Re-engineering initiative. OUTLOOK For fiscal 2012, the Company now expects net sales growth of 5.0% to 5.5% over the prior fiscal year and net income per diluted share of $1.95 to $2.00. The Company still expects its gross margin to increase by 200 to 250 basis points over fiscal 2011. For the fourth fiscal quarter, net sales are expected to range between $261 million and $267 million, or increase by 2.9% to 5.2%, including a negative impact from unfavorable foreign currency rates of 1.7% based on current rates. The Company will introduce fiscal 2013 guidance in August 2012 when it reports its fourth quarter and fiscal 2012 financial results. The guidance is based on April 2012 month end foreign currency rates. The Company also 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. CONFERENCE CALL INFORMATION The Company will host a conference call today at 10:00 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 of the Corporate tab on the Company's web site at http://ir.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 June 3, 2012. 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 anti-aging formulas, the celebrity fragrance brands of Britney Spears, Elizabeth Taylor, Mariah Carey, Taylor Swift, and Usher; the designer fragrance brands of Juicy Couture, Alberta Ferretti, Alfred Sung, Geoffrey Beene, Halston, Bob Mackie, 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 Nine Months Ended
-------------------- --------------------
March 31, March 31, March 31, March 31,
2012 2011 2012 2011
--------- --------- --------- ---------
Net Sales $ 239,279 $ 231,296 $ 972,739 $ 921,750
Cost of Goods Sold:
Cost of Sales 118,781 115,597 489,548 481,934
Depreciation Related to Cost
of Goods Sold 906 1,224 3,850 3,714
--------- --------- --------- ---------
Total Cost of Goods Sold 119,687 116,821 493,398 485,648
Gross Profit 119,592 114,475 479,341 436,102
Gross Profit Percentage 50.0% 49.5% 49.3% 47.3%
Selling, General and
Administrative Expenses 104,582 102,915 371,480 349,354
Depreciation and Amortization 7,645 6,044 21,433 18,593
--------- --------- --------- ---------
Total Operating Expenses 112,227 108,959 392,913 367,947
Interest Expense, Net 5,291 5,434 16,339 16,317
Debt Extinguishment Charges - 6,468 - 6,468
Income (Loss) Before Income
Taxes 2,074 (6,386) 70,089 45,370
(Benefit from) Provision for
Income Taxes (117) (3,135) 16,295 9,776
--------- --------- --------- ---------
Net Income (Loss) $ 2,191 $ (3,251) 53,794 $ 35,594
========= ========= ========= =========
As reported:
Net Income (Loss) Per Basic
Share $ 0.08 $ (0.12) $ 1.85 $ 1.29
Net Income (Loss) Per Diluted
Share $ 0.07 $ (0.12) $ 1.79 $ 1.24
Basic Shares 29,116 28,130 29,017 27,543
Diluted Shares 30,069 28,130 29,997 28,666
EBITDA (a) $ 15,916 $ 6,316 $ 111,711 $ 83,994
EBITDA margin (a) 6.7% 2.7% 11.5% 9.1%
Adjusted to exclude debt
extinguishment and expenses
associated with the Global
Efficiency Re-engineering
initiative, net of taxes
(b)(c):
Net Income $ 2,191 $ 580 $ 53,794 $ 39,795
Net Income Per Basic Share $ 0.08 $ 0.02 $ 1.85 $ 1.44
Net Income Per Diluted Share $ 0.07 $ 0.02 $ 1.79 $ 1.39
EBITDA (a) $ 15,916 $ 12,784 $ 111,711 $ 91,078
EBITDA margin (a) 6.7% 5.5% 11.5% 9.9%
(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 from operations or net income (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)
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 debt extinguishment and restructuring and
software implementation costs related to our Global Efficiency Re-
engineering initiative. This disclosure is being provided for comparability
purposes because we believe it is meaningful to our investors and other
interested parties to understand the EBITDA performance of the Company on a
consistent basis without regard to the effect of Global Efficiency Re-
engineering initiative expenses. EBITDA margin represents EBITDA divided by
Net Sales.
The table below reconciles net income (loss), as determined in accordance
with GAAP, to EBITDA and to EBITDA as adjusted: (For a reconciliation of net
income (loss) 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 http://www.elizabetharden.com/.)
(In thousands) Three Months Ended Nine Months Ended
-------------------- --------------------
March 31, March 31, March 31, March 31,
2012 2011 2012 2011
--------- --------- --------- ---------
Net income (loss) $ 2,191 $ (3,251) $ 53,794 $ 35,594
Plus:
(Benefit from) Provision for
income taxes (117) (3,135) 16,295 9,776
Interest expense, net 5,291 5,434 16,339 16,317
Depreciation related to cost of
goods sold 906 1,224 3,850 3,714
Depreciation and amortization 7,645 6,044 21,433 18,593
--------- --------- --------- ---------
EBITDA 15,916 6,316 111,711 83,994
Debt extinguishment and Global
Efficiency Re-engineering
initiative expenses (c) - 6,468 - 7,084
--------- --------- --------- ---------
EBITDA as adjusted $ 15,916 $ 12,784 $ 111,711 $ 91,078
========= ========= ========= =========
(b) The table below reconciles the calculation of (i) net income (loss) and
(ii) net income (loss) per share on a basic and diluted basis from the
amounts reported in accordance with GAAP to such amounts before giving
effect to debt extinguishment 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 the Company's operating performance on a consistent basis without
regard to the effect of debt extinguishment 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 Nine Months Ended
-------------------- --------------------
March 31, March 31, March 31, March 31,
2012 2011 2012 2011
--------- --------- --------- ---------
Net Income:
Net income (loss) as reported $ 2,191 $ (3,251) $ 53,794 $ 35,594
Debt extinguishment and Global
Efficiency Re-engineering
initiative expenses, net of
tax (c) (d) - 3,831 - 4,201
--------- --------- --------- ---------
Net income as adjusted $ 2,191 $ 580 $ 53,794 $ 39,795
========= ========= ========= =========
Net Income Per Basic Share:
Net income (loss) per basic
share as reported $ 0.08 $ (0.12) $ 1.85 $ 1.29
Debt extinguishment and Global
Efficiency Re-engineering
initiative expenses, net of
tax (c) (d) - 0.14 - 0.15
--------- --------- --------- ---------
Net income per basic as
adjusted $ 0.08 $ 0.02 $ 1.85 $ 1.44
========= ========= ========= =========
Net Income Per Diluted Share:
Net income (loss) per diluted
share as reported $ 0.07 $ (0.12) $ 1.79 $ 1.24
Debt extinguishment and Global
Efficiency Re-engineering
initiative expenses, net of
tax (c) (d) - 0.14 - 0.15
--------- --------- --------- ---------
Net income per diluted share as
adjusted $ 0.07 $ 0.02 $ 1.79 $ 1.39
========= ========= ========= =========
(c) For the three months ended March 31, 2011, includes $6.5 million of debt
restructuring costs. For the nine months ended March 31, 2011, includes $6.5
million of debt restructuring costs, $0.3 million related to the
implementation of our Oracle accounting and order processing systems and
$0.3 million of restructuring expenses related to our Global Efficiency Re-
engineering initiative.
(d) Our effective tax rate, which is calculated as a percentage of income
before income taxes, was 5.6% and 23.2% for the three and nine months ended
March 31, 2012, respectively. On a reported basis, for the three and nine
months ended March 31, 2011, our effective tax rate was 49.1% and 21.6%,
respectively. On an adjusted basis, for the three and nine months ended
March 31, 2011, our effective tax rate was 601.0% and 24.1%, respectively.
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, 2012 and 2011.
(In Three Months % Increase % Increase
thousands) Ended (Decrease) Nine Months Ended (Decrease)
----------------- ------------- ----------------- --------------
Constant Constant
March March Rates March March Rates
31, 2012 31, 2011 GAAP (e) 31, 2012 31, 2011 GAAP (e)
-------- -------- ---- -------- -------- -------- ----- --------
Segment Net
Sales
North
America $145,154 $142,755 1.7% 1.8% $625,215 $607,854 2.9% 2.7%
Interna-
tional 94,125 88,541 6.3% 7.1% 347,524 313,896 10.7% 7.8%
-------- -------- ---- -------- -------- -------- ----- --------
Total $239,279 $231,296 3.5% 3.8% $972,739 $921,750 5.5% 4.5%
======== ======== ======== ========
(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. The gains and/or losses from foreign
currency contracts were not material for all periods presented.
ELIZABETH ARDEN, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET DATA
(Unaudited)
(In thousands) March 31, June 30, March 31,
2012 2011 2011
----------- ----------- -----------
Cash $ 58,207 $ 58,850 $ 33,817
Accounts Receivable, Net 172,852 165,622 174,609
Inventories 272,532 246,514 289,825
Property and Equipment, Net 80,703 82,762 77,438
Exclusive Brand Licenses, Trademarks
and Intangibles, Net 221,738 184,758 186,600
Goodwill 21,054 21,054 21,054
Total Assets 910,237 854,837 870,562
Short-Term Debt - - 8,100
Current Liabilities 160,746 165, 497 199,338
Long-Term Liabilities 267,386 271,575 263,230
Total Debt 250,000 250,000 258,100
Shareholders' Equity 482,105 417,765 407,994
Working Capital 410,295 388,897 375,301
SUPPLEMENTARY CASH FLOW INFORMATION
(Unaudited)
(In thousands)
Nine Months Ended
---------------------------
March 31, March 31,
2012 2011
----------- -----------
Net cash provided by operating activities $ 50,331 $ 59,187
Net cash used in investing activities (60,685) (32,390)
Net cash provided by (used in) financing
activities 10,919 (21,609)
Net (decrease) increase in cash and cash
equivalents (643) 6,936
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. 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;
-- risks of international operations, including foreign currency
fluctuations, hedging activities, economic and political consequences
of terrorist attacks, disruptions in travel, unfavorable changes in
U.S. or international laws or regulations, diseases and pandemics, and
political instability in certain regions of the world;
-- our reliance on license agreements with third parties for the rights
to sell many of our prestige fragrance brands;
-- 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 retailer and/or consumer
confidence and demand, such as domestic or global recessions or
economic uncertainty;
-- 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;
-- 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, and (iii) finance our growth
strategy and our working capital requirements;
-- our level of indebtedness, our ability to realize sufficient cash
flows from operations to meet our debt service obligations and working
capital requirements, and restrictive covenants in our revolving
credit facility and the indenture for our 7 3/8% senior 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, laws or regulations relating to ingredients or
other chemicals or raw materials contained in products or packaging,
or accounting standards or critical accounting estimates;
-- the success of our global Elizabeth Arden brand repositioning
efforts;
-- the success of our Global Efficiency Re-engineering initiative,
including our transition to a turnkey manufacturing process and our
new financial accounting and order processing system;
-- our ability to effectively implement, manage and maintain our global
information systems;
-- our reliance on third parties for certain outsourced business
services, including information technology operations and employee
benefit plan administration;
-- the potential for significant impairment charges relating to our
trademarks, goodwill or other intangible 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, 2011. Company Contact: Marcey Becker Senior Vice President, Finance Investor/Press Contact: Allison Malkin/Michael Fox Integrated Corporate Relations (203) 682-8200 SOURCE: Elizabeth Arden, Inc. |
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