Elizabeth Arden, Inc. (NASDAQ:RDEN), a global prestige beauty
products company, today announced financial results for its fourth
quarter and fiscal year ended June 30, 2016.
FINANCIAL RESULTS
A reconciliation between GAAP and adjusted results can be found
in the tables and footnotes at the end of this press release.
Fourth Quarter ended June 30,
2016:
- GAAP net sales were $192.7 million, an
increase of 9.8% from the prior year period.
- On an adjusted basis, net sales
increased by 3.6% at constant foreign currency rates.
- GAAP net loss per diluted share of
$0.79.
- Adjusted net loss per diluted share of
$0.58, as compared to a net loss per diluted share of $1.57 for the
prior year period.
- By segment, North America segment net
sales increased by 2.6%, and International segment net sales
increased by 1.6%, as compared to the prior year period.
- By segment, on an adjusted basis and at
constant foreign currency rates, North America segment net sales
increased by 2.8%, and International segment net sales increased by
4.6%, as compared to the prior year period.
- Gross margin of 47.8% as compared to
10.9% in the prior year period.
- Adjusted gross margin of 48.9% as
compared to 42.7% in the prior year period.
Fiscal Year ended June 30,
2016:
- GAAP net sales were $966.7 million, a
decrease of 0.4% from the prior fiscal year.
- Adjusted net sales increased by 0.6% at
constant foreign currency rates.
- GAAP net loss per diluted share of
$2.49.
- Adjusted net loss per diluted share of
$1.25, as compared to a net loss per diluted share of $2.58 for the
prior fiscal year.
- By segment, North America segment net
sales decreased by 3.6%, and International segment net sales
decreased by 2.8% as compared to the prior fiscal year.
- By segment, on an adjusted basis and at
constant foreign currency rates, North American segment net sales
decreased by 2.7% and International segment net sales increased by
5.6%, as compared to the prior fiscal year.
- Gross margin of 44.4% as compared to
35.9% in the prior fiscal year.
- Adjusted gross margin of 45.1% as
compared to 43.0% in the prior fiscal year.
The Company ended fiscal 2016 by delivering on all of its key
metrics, reflecting the impact of the Company’s multi-year
operational and cost strategies to deliver consistent constant
foreign currency net sales growth for the Elizabeth Arden brand and
key fragrance pillars, as well as improving margins and
profitability. Gross margin, earnings and cash flow all met or
exceeded the Company’s internal targets, despite foreign currency
headwinds. These results also represent the Company’s sixth
consecutive quarter of constant foreign currency net sales growth
for the Elizabeth Arden brand and its International segment and its
second consecutive quarter of constant foreign currency net sales
growth for its North American segment.
KEY INITIATIVES
All figures below are on an adjusted and constant foreign
currency basis:
Drive the Elizabeth Arden Brand:
Net sales of the Company's Elizabeth Arden branded products
increased at an accelerated rate during the fourth fiscal quarter,
growing by 14%, with double digit growth posted across the skin
care, color cosmetics and fragrance categories. The Company’s
recent innovation continues to perform well, driving an improvement
in retail sales. The Company is also expanding its ecommerce
capabilities and social media activities to drive global demand for
the Elizabeth Arden brand.
Grow the Fragrance Portfolio: Net
sales of non-Elizabeth Arden branded fragrances decreased by 5% for
the quarter, primarily due to lower sales of distributed fragrance
brands. Net sales of the Company's designer fragrances increased by
5% behind continued strong momentum for John Varvatos and Juicy
Couture fragrances. The Company’s White Diamonds and Curve
fragrances brands also grew during the fourth fiscal quarter.
Improve Go-To-Market Capability and
Execution: Net sales growth momentum continued during the
fourth fiscal quarter for the Company's International segment,
including net sales increases across all International markets
except Latin America. The European region increased by 3% on top of
a 27% increase for the third fiscal quarter, and the Company’s Asia
Pacific and Greater China markets increased by 19% and 12%,
respectively, led by continued momentum of the Elizabeth Arden
brand and the ecommerce platform in China and performance of the
Company’s regional joint venture.
Optimize Costs and Reduce Complexity to
Drive Gross Margin: The Company's business transformation
initiatives continued to drive down costs and improve efficiencies,
and along with more favorable product mix helped to drive
improvement in gross margins. Adjusted gross margins for the fourth
fiscal quarter increased by 620 basis points to 48.9% and by 210
basis points year-over-year to 45.1%. In addition, the Company was
ahead of plan in achieving its cash flow budget, and its cost
savings initiatives yielded an estimated $51 million of annualized
savings, exceeding the high end of its previously communicated
estimate of approximately $47 million to $50 million of annualized
savings.
PENDING MERGER WITH
REVLON
The Company notes that the merger with a subsidiary of Revlon,
Inc., announced on June 16, 2016, is still expected to close in
2016.
The Company will host a conference call today, August 10, 2016,
at 4:30 p.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 September 10, 2016.
Elizabeth Arden is a global prestige beauty products company
with an extensive portfolio of prestige beauty brands sold in over
120 countries. The Company's brand portfolio includes Elizabeth
Arden skincare, color and fragrance products; its professional
skincare line, Elizabeth Arden PRO; the designer fragrance brands
of Juicy Couture, John Varvatos and Wildfox Couture; the heritage
fragrance brands of Britney Spears, White Diamonds Elizabeth
Taylor, Curve, Giorgio Beverly Hills, Ed Hardy, Christina Aguilera,
Jennifer Aniston, Lucky Brand, Paul Sebastian, Halston, Geoffrey
Beene, Rocawear, Alfred Sung, White Shoulders and BCBGMAXAZRIA; and
the celebrity fragrance brands of Taylor Swift, Nicki Minaj and
Mariah Carey.
ELIZABETH ARDEN, INC. AND
SUBSIDIARIESCONSOLIDATED STATEMENT OF OPERATIONS(Unaudited)(In
thousands, except percentages and per share data)
Three Months Ended
Twelve Months Ended June 30, June 30,
June 30, June 30, 2016
2015 2016 2015 Net Sales $
192,651 $ 175,460 $ 966,733 $ 971,098
Cost of Goods Sold: Cost of Sales 99,338 154,590 531,272 614,736
Depreciation Related to Cost of Goods
Sold
1,307 1,794 5,796
7,710 Total Cost of Goods Sold 100,645 156,384 537,068
622,446 Gross Profit 92,006 19,076 429,665 348,652 Gross
Profit Percentage 47.8 % 10.9 % 44.4 % 35.9 % Selling,
General and Administrative Expenses 97,068 105,471 433,694 497,004
Depreciation and Amortization 9,321
9,718 36,902 40,773 Total Operating
Expenses 106,389 115,189 470,596 537,777 Interest Expense,
Net 7,540 7,103 29,905 29,626 Debt Extinguishment Charges
-- -- -- 239 Loss
Before Income Taxes (21,923 ) (103,216 ) (70,836 ) (218,990 )
Provision for Income Taxes 1,237 4,740
2,670 6,297 Net Loss (23,160 ) (107,956
) (73,506 ) (225,287 )
Net (Loss) Income Attributable to
Noncontrolling Interests
(31 ) 102 (1,721 )
(1,294 )
Net Loss Attributable to
Elizabeth Arden Shareholder
(23,129 ) (108,058 ) (71,785 ) (223,993 )
Less: Accretion and Dividends on
Preferred Stock
649 633 2,586
22,333
Net Loss Attributable to
Elizabeth Arden Common Shareholders
$ (23,778 ) $ (108,691 ) $ (74,371 ) $
(246,326 )
As
reported:
Net Loss Per Diluted
Share Attributable to Elizabeth Arden
Common Shareholders
$ (0.79 ) $ (3.65 ) $ (2.49 ) $ (8.26 ) Basic Shares 29,949
29,812 29,884 29,804 Diluted Shares 29,949 29,812 29,884 29,804
EBITDA (a) $ (3,755 ) $ (84,601 ) $ 1,767 $ (140,881 )
EBITDA margin (a) (1.9 )% (48.2 )% 0.2 % (14.5 )%
Adjusted to exclude
non-recurring costs, net oftaxes:
Net Sales $ 192,651 $ 188,715 $ 966,733 $ 999,325 Gross
Profit $ 94,135 $ 80,672 $ 436,188 $ 430,093 Gross Profit
Percentage 48.9 % 42.7 % 45.1 % 43.0 %
Net Loss Per Diluted
Share Attributable to Elizabeth Arden
Common Shareholders
$ (0.58 ) $ (1.57 ) $ (1.25 ) $ (2.58 ) EBITDA (a) $ 2,397 $
(16,450 ) $ 25,237 $ 144 EBITDA margin (a) 1.2 % (8.7 )% 2.6 % -- %
(a) EBITDA is defined as net income attributable to Elizabeth
Arden common shareholders plus the provision for income taxes (or
net loss attributable to Elizabeth Arden common shareholders, less
the benefit from income taxes or plus the provision for income
taxes) plus interest expense, plus depreciation and amortization,
plus net income (or net loss) attributable to noncontrolling
interest, plus accretion and dividends on preferred stock. EBITDA
should not be considered as an alternative to income (loss) from
operations or net income (loss) attributable to Elizabeth Arden
common shareholders (as determined in accordance with generally
accepted accounting principles (GAAP) as a measure of our operating
performance or to net cash provided by (used in) operating
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, preferred stock accretion or dividends 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 and other companies may define EBITDA differently. We
have also disclosed EBITDA as adjusted without giving effect to the
2014 Performance Improvement Plan, the 2016 Business Transformation
Program and the pending merger with a subsidiary of Revlon, Inc.
(the “Revlon Merger”). 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 charges related to the 2014 Performance Improvement
Plan, the 2016 Business Transformation Program and the pending
Revlon Merger.
The table below reconciles net loss attributable to Elizabeth
Arden common shareholders, as determined in accordance with GAAP,
to EBITDA and to EBITDA as adjusted: (For a reconciliation of net
income (loss) attributable to Elizabeth Arden common shareholders
or 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 www.elizabetharden.com).
(In thousands)
Three Months Ended Twelve
Months Ended
June 30,2016
June 30,2015
June 30,2016
June 30,2015
Net Loss Attributable to Elizabeth
Arden Arden Common Shareholders
$ (23,778 ) $ (108,691 ) $ (74,371 ) $ (246,326 ) Plus: Provision
for Income Taxes 1,237 4,740 2,670 6,297 Interest expense, net
7,540 7,103 29,905 29,626 Depreciation related to cost of goods
sold 1,307 1,794 5,796 7,710 Depreciation and amortization 9,321
9,718 36,902 40,773
Net (loss) income attributable to
noncontrolling interest
(31
)
102 (1,721 ) (1,294 ) Accretion and dividends on preferred stock
649 633 2,586
22,333 EBITDA (3,755 ) (84,601 ) 1,767 (140,881 )
Non-recurring and other costs 6,152
68,151 23,470 141,025 EBITDA, as
adjusted $ 2,397 $ (16,450 ) $ 25,237 $
144
The table below reconciles net cash flow (used in) provided by
operating activities, as determined in accordance with GAAP, to
EBITDA:
(Amounts in thousands) Twelve Months
Ended
June 30,2016
June 30,2015
Net cash (used in) provided by operating activities $
(33,750 ) $ 54,027 Changes in assets and liabilities, net of
acquisitions 10,387 (176,751 ) Interest expense, net 29,905 29,626
Amortization of senior note offering and credit facility costs
(1,709 ) (1,558 ) Amortization of senior note premium 849 798
Provision for income taxes 2,670 6,297 Deferred income taxes (1,095
) (4,958 ) Amortization of share-based awards (5,490 ) (5,165 )
Asset impairments -- (42,958 ) Debt extinguishment charges
-- (239 ) EBITDA $ 1,767 $ (140,881 )
The tables below reconcile the amounts expected to be reported
in accordance with GAAP to such amounts before giving effect to
charges related to the 2014 Performance Improvement Plan, the 2016
Business Transformation Program and the pending Revlon Merger. This
disclosure is being provided for comparability purposes because we
believe it is meaningful to our investors and other interested
parties to understand our expected operating performance without
regard to the effect of charges related to the 2014 Performance
Improvement Plan, the 2016 Business Transformation Program and the
pending Revlon Merger. The presentation in the table below of the
non-GAAP information included in the "Adjusted" columns is not
meant to be considered in isolation or as a substitute for final
audited results prepared in accordance with GAAP.
ELIZABETH ARDEN, INC. AND
SUBSIDIARIES
Reconciliation of GAAP to Adjusted
Amounts
(In thousands, except percentages and per
share data)
Three Months Ended
Three Months Ended June 30, 2016 June 30, 2015
Reported Adjustments
Adjusted Reported Adjustments
Adjusted Net Sales $ 192,651 $ -- $ 192,651 $
175,460 $ 13,255 (f) $ 188,715 Gross Profit
92,006 2,129 (a) 94,135 19,076 61,596 (f)(g) 80,672 Gross Profit
Percentage 47.8 % 48.9 % 10.9 % 42.7 % Total Operating
Expenses 106,389 (4,138 ) (b) 102,251 115,189 (6,555 ) (h) 108,634
Loss Before Income Taxes (21,923 ) 6,267 (a)(b) (15,656 )
(103,216 ) 68,151 (f)(g)(h) (35,065 ) Provision for (Benefit from)
Income Taxes 1,237 (393) (c) 844 4,740 6,338 (i) 11,078
Net Loss Attributable to
Elizabeth Arden Common Shareholders
$ (23,778 ) $ 6,435 (d) $ (17,343 ) $ (108,691
) $ 61,813 $ (46,878 ) EBITDA $ (3,755 ) $ 6,152 (e)
$ 2,397 $ (84,601 ) $ 68,151 (f)(g)(h) $ (16,450 )
Net Loss Per Basic and Diluted Share
Attributable to Elizabeth Arden Common Shareholders
$ (0.79 ) $ 0.21 $ (0.58 ) $ (3.65 ) $ 2.08 $ (1.57 ) (a)
Includes $2.1 million of inventory costs under our 2016 Business
Transformation Program, primarily related to the closing of our
Brazilian affiliate, as well changes in certain distribution and
customer arrangements. (b) Includes $2.0 million in expenses under
the 2016 Business Transformation Program, primarily comprised of
severance and other employee-related expenses and related
transition costs, $2.0 million for costs incurred related to the
pending Revlon Merger and $0.1 million for the acceleration of
depreciation expense for leasehold improvements related to leased
space vacated under the 2016 Business Transformation Program. (c)
On a GAAP and adjusted basis, our effective tax rate was (5.6)% and
(5.4)%, respectively. The reported tax rate includes valuation
allowances of $4.5 million against our U.S. deferred tax assets,
and $0.7 million of valuation allowances against deferred tax
assets in certain foreign operations recorded as non-cash charges
to income tax expense. (d) In addition to items in (a), (b), and
(c) above, also includes $0.2 million of adjustments for certain
charges attributable to noncontrolling interests. (e) Includes
items in (a) and (b) above except for accelerated depreciation
expense. (f) Includes $13.2 million of returns and markdowns under
our 2014 Performance Improvement Plan primarily due to changes to
(i) our distribution strategy in China, (ii) pricing and
distribution strategies for certain fragrance products, and (iii)
other customer and distribution arrangements. (g) In addition to
(f) above, also includes $48.3 million (non-cash) of inventory
write-downs under our 2014 Performance Improvement Plan primarily
due to changes in pricing and distribution strategies for certain
fragrance products, and the discontinuation of certain products.
(h) Includes (i) $4.2 million in expenses under the 2014
Performance Improvement Plan primarily comprised of $4.0 million of
customer and vendor contract termination costs, $0.1 million of
severance, other employee-related expenses and related transition
costs associated with the reduction in global headcount positions,
and $0.1 million in asset impairment charges, and (ii) $2.4 million
in expenses under the 2016 Business Transformation Program,
primarily comprised of $1.6 million of severance and other
employee-related costs and approximately $0.8 million in lease
termination costs. (i) On a reported and adjusted basis, our
effective tax rate was (4.6)% and (31.6)%, respectively. The
reported tax rate includes valuation allowances of $14.7 million
against our U.S. deferred tax assets and $4.4 million against
deferred tax assets in certain foreign operations recorded as a
non-cash charge to income tax expense.
ELIZABETH ARDEN, INC. AND
SUBSIDIARIESReconciliation of GAAP to Adjusted Amounts(In
thousands, except percentages and per share data)
Twelve Months Ended
Twelve Months Ended June 30,
2016 June 30, 2015
Reported
Adjustments
Adjusted Reported
Adjustments
Adjusted
Net Sales $ 966,733 $ -- $ 966,733
$
971,098 $ 28,227 (f) $ 999,325 Gross Profit
429,665 6,523 (a) 436,188 348,652 81,441 (f)(g) 430,093 Gross
Profit Percentage 44.4 % 45.1 % 35.9 % 43.0 % Total
Operating Expenses 470,596 (17,404) (b) 453,192 537,777 (59,345)
(h) 478,432 Loss Before Income Taxes (70,836) 23,927 (a)(b)
(46,909) (218,990) 141,025 (i) (77,965) Provision for (Benefit
from) Income Taxes 2,670 (13,413) (c) (10,743) 6,297 (8,896) (j)
(2,599)
Net Loss Attributable to ElizabethArden
Common Shareholders
$ (74,371 ) $ 36,921 (d) $ (37,450 )
$
(246,326 ) $ 169,305 $ (77,021 ) EBITDA 1,767
23,470 (e) $ 25,237
$
(140,881 ) $ 141,025 (k) $ 144
Net Loss Per Basic and Diluted Share
Attributable toElizabeth Arden Common Shareholders
$ (2.49 ) $ 1.24
$
(1.25
)
$
(8.26
)
$
5.68 $ (2.58 ) (a) Includes $6.5 million of inventory costs
under our 2016 Business Transformation Program, primarily related
to the closing of our Brazilian affiliate, as well changes in
certain distribution and customer arrangements. (b) Includes $14.9
million in expenses under the 2016 Business Transformation Program,
primarily comprised of severance and other employee-related
expenses and related transition costs, $2.0 million for costs
incurred related to the pending Revlon Merger and $0.5 million for
the acceleration of depreciation expense for leasehold improvements
related to leased space vacated under the 2016 Business
Transformation Program. (c) On a reported and adjusted basis, our
effective tax rate was (3.8)% and 22.9%, respectively. The reported
tax rate includes valuation allowances of $14.9 million against our
U.S. deferred tax assets and $3.9 million against deferred tax
assets in certain foreign operations recorded as non-cash charges
to income tax expense. (d) In addition to items in (a), (b) and (c)
above, also includes $0.4 million of adjustments for certain
charges attributable to noncontrolling interests. (e) Includes
items in (a) and (b) above except for accelerated depreciation
expense. (f) Includes $28.2 million of returns and markdowns under
our 2014 Performance Improvement Plan primarily due to changes to
(i) our distribution strategy in China, (ii) pricing and
distribution strategies for certain fragrance products, and (iii)
other customer and distribution arrangements. (g) In addition to
(f) above, also includes $53.2 million (non-cash) of inventory
write-downs under our 2014 Performance Improvement Plan primarily
due to changes in pricing and distribution strategies for certain
fragrance products and the discontinuation of certain products. (h)
Includes (i) $13.2 million in expenses under the 2014 Performance
Improvement Plan primarily comprised of $8.5 million of customer
and vendor contract termination costs, $4.5 million of severance,
other employee-related expenses and related transition costs
associated with the reduction in global headcount positions, and
$0.2 million in asset impairment charges, (ii) $43.8 million
(non-cash) in asset impairment charges primarily related to the
write off of the celebrity fragrance licenses acquired from Give
Back Brands and other costs, and (iii) $2.4 million in expenses
under the 2016 Business Transformation Program, primarily comprised
of $1.6 million of severance and other employee-related costs and
approximately $0.8 million in lease termination costs (i) Includes
items in (f), (g) and (h) above as well as $0.2 million of debt
extinguishment costs resulting from the December 2014 amendment to
our credit facility and $0.8 million of adjustments for certain
charges attributable related to noncontrolling interests. (j) On a
reported and adjusted basis, our effective tax rate was (2.9)% and
3.3%, respectively. The reported tax rate includes valuation
allowances of $51.9 million against our U.S. deferred tax assets
and $6.9 million against deferred tax assets in certain foreign
operations recorded as non- cash charges to income tax expense. (k)
Includes items in (f), (g) and (h) above except for accelerated
depreciation expense.
SEGMENT NET SALES
The table below is a comparative summary
of our net sales by reportable segment for the three and twelve
months ended June30, 2016 and 2015:
(In thousands) Three
Months Ended % Increase Twelve Months Ended %
(Decrease)Increase June 30,2016
June 30,2015
GAAP
ConstantRates (1) June 30,2016
June 30,2015 GAAP
ConstantRates (1) Segment Net Sales
North America $ 102,001 $ 99,454 2.6 % 2.8 % $
584,921 $ 606,599 (3.6 )% (2.7 )% International 90,650
89,261 1.6 % 4.6 % 381,812
392,726 (2.8 )% 5.6 % Total $ 192,651 $ 188,715 2.1 %
3.6 % $ 966,733 $ 999,325 (3.3 )% 0.6 % Reconciliation:
Segment Net Sales $ 192,651 $ 188,715 --
--
$ 966,733 $ 999,325
--
-- Less:
Unallocated salesreturns andmarkdowns
(2)
-- 13,255 --
--
-- 28,227
--
--
Net Sales $ 192,651 $ 175,460 9.8 % 11.5 % $ 966,733
$ 971,098 (0.4 )% 3.5 %
PRODUCT
CATEGORY NET SALES
The table below is a comparative summary
of our net sales by product category for the three and twelve
months ended June 30,2016 and 2015:
(In thousands) Three Months
Ended % Increase Twelve Months
Ended
% (Increase)Decrease
June 30,2016 June 30,2015
GAAP ConstantRates (1) June
30,2016 June 30,2015 GAAP
ConstantRates (1) Product CategoryNet Sales
Elizabeth ArdenBrand $ 95,566 $ 81,023
17.9 % 19.0 % $ 394,909 $ 376,925 4.8 % 10.7 %
Celebrity,Heritage,Designer andOther Fragrances 97,085
94,437 2.8 % 5.0 % 571,824
594,173 (3.8 )% (1.1 )% Total $ 192,651 $ 175,460 9.8
% 11.5 % $ 966,733 $ 971,098 (0.4 )% 3.5 %
The table below is a comparative summary
of our adjusted net sales by product category for the three and
twelve months endedJune 30, 2016 and 2015:
(In thousands) Three Months
Ended
% Increase(Decrease)
Twelve Months Ended
% (Decrease)Increase
June 30,2016 June 30,2015
GAAP ConstantRates (1) June
30,2016 June 30,2015 GAAP
ConstantRates (1) Product CategoryNet Sales
Elizabeth ArdenBrand $ 95,566 $ 84,473 13.1 % 14.2 % $
394,909 $ 393,745 0.3 % 5.9 % Celebrity,Heritage,Designer andOther
Fragrances 97,085 104,242 (6.9) % (5.0) %
571,824 605,580 (5.6 )% (2.9 )% Total $
192,651 $ 188,715 2.1 % 3.6 % $ 966,733 $ 999,325
(3.3 )% 0.6 % (1) 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 in all periods. We calculate constant
currency information by translating current-period results using
prior-year GAAP foreign currency exchange rates. (2) Amounts for
the three and twelve months ended June 30, 2015, reflect returns
and markdowns under our 2014 Performance Improvement Plan.
ELIZABETH ARDEN, INC. AND
SUBSIDIARIESCONSOLIDATED BALANCE SHEET
DATA(Unaudited)
(In thousands)
June
30,2016 June 30,2015
Cash $ 45,049 $ 46,085 Accounts
Receivable, Net 115,994 105,414 Inventories 241,409 240,740
Property and Equipment, Net 88,321 105,821 Exclusive Brand
Licenses, Trademarks and Intangibles, Net 225,046 224,895 Goodwill
31,607 31,607 Total Assets 799,539 813,224 Short-Term Debt 67,000
8,300 Current Liabilities 270,487 215,977 Long-Term Liabilities
416,831 410,535 Long-Term Debt 354,785 355,634 Redeemable
Noncontrolling Interest 2,345 4,222 Redeemable Preferred Stock
50,000 50,000 Total Shareholders' Equity 59,876 132,490 Working
Capital 158,737 207,923
SUPPLEMENTARY CASH FLOW
INFORMATION(Unaudited)(In thousands)
Twelve Months Ended June
30,2016 June 30,2015
Net cash (used in) provided by operating activities $
(33,750 ) $ 54,027 Net cash used in investing
activities (22,398 ) (30,079 ) Net cash provided by (used in)
financing activities 56,431 (30,975 ) Net decrease in cash and cash
equivalents (1,036 ) (10,223 )
Cautionary Note Regarding Forward-Looking Information and
Factors That May Affect Future Results
The Securities and Exchange Commission encourages companies to
disclose forward-looking information so that investors can better
understand a company's future prospects and make informed
investment decisions. This press release and other written and oral
statements that we make from time to time contain such
forward-looking statements that set out anticipated results based
on management's plans and assumptions regarding future events or
performance. We have tried, wherever possible, to identify such
statements by using words such as "anticipate," "estimate,"
"expect," "project," "intend," "plan," "believe," "will" and
similar expressions in connection with any discussion of future
operating or financial performance. In particular, these include
statements relating to future actions, prospective products, future
operating or financial performance or results of current and
anticipated products or sales efforts, expenses and/or cost
savings, interest rates, foreign exchange rates, the outcome of
contingencies such as legal proceedings, and financial results. A
list of factors that could cause our actual results of operations
and financial condition to differ materially is set forth below,
and these factors are discussed in greater detail under Item 1A --
"Risk Factors" of our Annual Report on Form 10-K for the fiscal
year ended June 30, 2015:
* uncertainty about the completion of the
Revlon Merger and the impact of such uncertainty on our business
and stock price; * potential disruptions of current plans and
operations and expenses incurred due to the announcement and
pendency of the Revlon Merger; * the response of customers,
distributor, suppliers and business partners to the announcement
and pendency of the Revlon Merger; * potential difficulties in
employee retention due to the announcement and pendency of the
Revlon Merger; * litigation costs, judgments or settlements,
including those incurred with respect to actions initiated with
respect to the proposed Revlon Merger; * our ability to implement
our 2014 Performance Improvement Plan and our 2016 Business
Transformation Program or other restructuring or cost saving
initiatives, our ability to realize the anticipated benefits of our
2014 Performance Improvement Plan, our 2016 Business Transformation
Program and any other restructuring or cost saving initiatives
and/or changes in the timing of such benefits; * whether we will
incur higher than anticipated costs, expenses or charges related to
the implementation of our 2016 Business Transformation Program or
any additional restructuring or cost savings activities, and/or
changes in the expected timing of such costs, expenses or charges;
* decisions or actions resulting from our continued reexamination
of our business, including implementing any additional
restructuring activities, and the timing and amount of any costs,
expenses or charges that may be incurred as a result or the
benefits anticipated to result from any such decisions or actions;
* our ability to realize benefits from the strategic investment
made by affiliates of Rhône Capital L.L.C. in our company; *
factors affecting our relationships with our customers or our
customers' businesses, including the absence of contracts with
customers, our customers' financial condition, reduction in
consumer traffic or demand, and changes in the retail, fragrance
and cosmetic industries, such as the consolidation of retailers and
the 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, restrictions on our
ability to repatriate cash, economic and political consequences of
the United Kingdom’s announced withdrawal from the European Union,
terrorist attacks or civil unrest, 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 our owned
and licensed products and our absence of contracts with suppliers
of distributed brands or raw materials and components for
manufacturing of owned and licensed brands; * delays in shipments,
inventory shortages and higher supply chain costs 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 international recessions, economic
uncertainty or terrorist attacks or civil unrest; * our ability to
protect our intellectual property rights and to operate our
business without infringing the intellectual property rights of
others; * the success, or changes in the timing or scope, of our
new product launches, advertising and merchandising programs; * our
ability to successfully manage our inventories; * 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 brands or secure distribution
arrangements, (ii) successfully and cost-effectively integrate
acquired businesses or new brands, (iii) successfully expand our
geographic presence and distribution channels, and (iv) 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
amended credit facility, second lien credit agreement, and the
indenture for our 7 3/8% senior notes; * our ability to realize
sufficient cash flows from operations to meet our dividend and
redemption obligations under the terms of our preferred stock, and
our ability to comply with our other obligations relating to our
preferred stock, including those set forth in the shareholders
agreement relating thereto; * 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, advertising or packaging, or accounting
standards or critical accounting estimates; * the success of our
Elizabeth Arden brand repositioning efforts and global business
strategy; * the impact of tax audits, including the ultimate
outcome of the pending Internal Revenue Service examination of our
U.S. federal tax returns for the fiscal years ended June 30, 2010,
2011 and 2012, changes in tax laws or tax rates, and our ability to
utilize our deferred tax assets, and/or the establishment of
valuation allowances related thereto; * our ability to effectively
implement, manage and maintain our global information systems and
maintain the security of our confidential data and our employees'
and customers' personal information; * our reliance on third
parties for certain outsourced business services, including
information technology operations, logistics management and
employee benefit plan administration; * the potential for
significant impairment charges relating to our trademarks,
goodwill, investments in other entities or other intangible assets,
including license agreements, that could result from a number of
factors, including such entities' or brands' business performance
or downward pressure on our stock price; and * other unanticipated
risks and uncertainties.
We caution that the factors described herein and other factors
could cause our actual results of operations and financial
condition 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.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20160810006101/en/
Elizabeth Arden, Inc.Marcey BeckerSenior Vice President,
FinanceorInvestor/Press:Allison Malkin/Michael FoxIntegrated
Corporate Relations(203) 682-8200
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