Elizabeth Arden, Inc. Announces First Quarter Fiscal 2014 Results

  Elizabeth Arden, Inc. Announces First Quarter Fiscal 2014 Results

             ~ Net Sales of $344 million; Adjusted EPS of $0.22 ~

Business Wire

NEW YORK -- October 30, 2013

Elizabeth Arden, Inc. (NASDAQ:RDEN), a global prestige beauty products
company, today announced financial results for its first fiscal quarter ended
September 30, 2013.

For the quarter ended September 30, 2013, the Company reported net sales of
$343.6 million, which compares to $344.5 million for the prior fiscal year
period. At constant foreign currency rates, net sales increased by 0.6%. On a
reported basis, net income per diluted share was $0.06. On an adjusted basis,
net income per diluted share was $0.22, as compared to net income per diluted
share of $0.44 for the prior year period. Adjusted net income per diluted
share excludes non-recurring costs relating to the Elizabeth Arden brand
repositioning and restructuring activities, and for fiscal 2013, adjusted net
income also excludes costs relating to fragrance brand acquisitions completed
in fiscal 2012. 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 increased by 5.3%, or 7.2%
at constant foreign currency rates, over the prior fiscal year period. Sales
growth was strongest in the Company's Greater China and European markets. Net
sales in the Company's North America segment declined by 3.0%, reflecting
significant fragrance launch volume in the prior year period.

For the quarter, net sales of Elizabeth Arden branded products increased by
11.1%, or 12.3% at constant foreign currency rates, as compared to the prior
year, with increases across the skin care, color cosmetics and fragrance
categories. Retail sales at the Company's Elizabeth Arden flagship counters
have increased 20% in North America year over year since conversion, and
retail sales at the Company’s international flagship doors have increased
13.4% since conversion, or 21.6% excluding underperforming travel retail doors
in Korea. Elizabeth Arden brand net sales growth was strongest in the
Company’s focus markets of China, North America and Europe.

E. Scott Beattie, Chairman, President and Chief Executive Officer of Elizabeth
Arden, Inc., commented, “Overall results for the quarter were essentially in
line with our expectations. We are pleased with the progress of the Elizabeth
Arden brand repositioning as well as our other key initiatives. Recall, we had
strong sales growth in the first half of last year due to the contribution of
acquisitions and an unprecedented level of fragrance launch volume. This
clearly has an impact on revenue growth and gross margin improvement
comparisons for this fiscal year. As we head into the holiday season, we
expect to continue to execute against our plans, but our outlook remains
cautious given the continued challenging economic environment globally.”

Mr. Beattie continued, “We are pleased to welcome Eric Lauzat to our company
as Executive Vice President and General Manager, International. Eric has had a
distinguished career at L’Oreal where he was a key commercial leader
instrumental in building prestige beauty businesses in various regions of the
world. He has an exemplary track record of organization building and
commercial brand development of prestige beauty brands across categories in
the regions he managed, including the Lancome and Biotherm beauty brands, as
well as the Giorgio Armani, Ralph Lauren and Yves Saint Laurent fragrances.
Eric’s organizational leadership of our international business should help
accelerate the development of our international teams, our customer
relationships and our brand portfolio.”

“I am extremely excited to be joining Elizabeth Arden. The iconic Elizabeth
Arden brand and the Company’s impressive fragrance portfolio have tremendous
untapped potential to build market share in existing markets, as well as to
expand into high growth beauty markets. The Company has had a remarkable track
record of growth over the past 20 years, and I am convinced that there are
opportunities to drive accelerated growth over the next several years,” added
Mr. Lauzat.

OUTLOOK

Results for the second fiscal quarter ending December 31, 2013, will be
largely dependent on retail performance during the holiday season and
replenishment orders, particularly of the Company’s larger North American mass
accounts. While the environment remains relatively unchanged, both of these
factors have been volatile over the past year. The Company is currently
forecasting net sales to range between $450 million to $475 million and for
earnings per diluted share to be in the range of $1.30 to $1.60.

Given its current expectations for the second fiscal quarter, the Company
expects to achieve the midpoint to lower end of its annual fiscal 2014 net
sales and earnings guidance that called for a net sales increase of 3.0% to
5.0% over fiscal 2013, and earnings per diluted share of $2.15 to $2.30. The
annual net sales guidance includes an anticipated unfavorable impact from
foreign currency of approximately 0.4%, as compared to the prior year period.

The earnings guidance excludes all non-recurring expenses. For fiscal 2014,
the Company expects to incur non-recurring expenses of $11.0 million to $16.0
million for the Elizabeth Arden brand repositioning, of which $4.2 million
were incurred in the first fiscal quarter. Additionally, the Company expects
to incur approximately $5.0 million for restructuring and related transition
costs, $2.4 million of which were incurred in the first fiscal quarter.

The Company’s guidance is based on September month end foreign currency rates.
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.

CONFERENCE CALL INFORMATION

The Company will host a conference call today, Wednesday, October 30, 2013, 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
November 30, 2013.

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, the celebrity fragrance brands of Britney Spears, Elizabeth Taylor,
Justin Bieber, Mariah Carey, Nicki Minaj, Taylor Swift, Usher and Jennifer
Aniston; the designer fragrance brands of Juicy Couture, Alfred Sung,
BCBGMAXAZRIA, Geoffrey Beene, Halston, Bob Mackie, Ed Hardy, John Varvatos,
Lucky Brand, True Religion and Rocawear; and the lifestyle fragrance brands
Curve, Giorgio Beverly Hills, and PS Fine Cologne.

                                                                             
ELIZABETH ARDEN, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF INCOME DATA
(Unaudited)
(In thousands, except percentages and per share data)
                                       
                                         Three Months Ended
                                         September 30,       September 30,
                                         2013                  2012
                                                                             
Net Sales                                $   343,609         $ 344,541
                                                                             
Cost of Goods Sold:
Cost of Sales                                193,674           195,611
Depreciation Related to Cost of Goods       1,830            1,531
Sold
Total Cost of Goods Sold                     195,504           197,142
                                                                             
Gross Profit                                 148,105           147,399
Gross Profit Percentage                      43.1      %       42.8          %
                                                                             
Selling, General and Administrative          129,372           129,407
Expenses
Depreciation and Amortization               10,699           9,129
Total Operating Expenses                     140,071           138,536
                                                                             
Interest Expense, Net                       6,032            6,198
Income Before Income Taxes                   2,002             2,665
Provision for Income Taxes                  414              481
Net Income                               $   1,588           $ 2,184
Net Loss Attributable to                    (109      )      --
Noncontrolling Interests
Net Income Attributable to Elizabeth     $   1,697           $ 2,184
Arden Shareholders
                                                                             
As reported:
                                                                             
Net Income Per Basic Share
Attributable to Elizabeth Arden          $   0.06            $ 0.07
Shareholders
Net Income Per Diluted Share
Attributable to Elizabeth Arden          $   0.06            $ 0.07
Shareholders
                                                                             
Basic Shares                                 29,679            29,417
Diluted Shares                               30,288            30,369
                                                                             
EBITDA (a)                               $   20,563          $ 19,523
EBITDA margin (a)                            6.0       %       5.7           %
                                                                             
Adjusted to exclude non-recurring
costs, net of taxes (b)(c):
                                                                             
Gross Profit                             $   151,877         $ 162,119
Gross Profit Percentage                      44.2      %       47.1          %
                                                                             
Net Income Attributable to Elizabeth     $   6,752           $ 13,441
Arden Shareholders
                                                                             
Net Income Per Basic Share
Attributable to Elizabeth Arden          $   0.23            $ 0.46
Shareholders
Net Income Per Diluted Share
Attributable to Elizabeth Arden          $   0.22            $ 0.44
Shareholders
                                                                             
EBITDA (a)                               $   27,132          $ 34,587
EBITDA margin (a)                            7.9       %       10.0          %
                                                                             

(a) EBITDA is defined as net income attributable to Elizabeth Arden
shareholders plus the provision for income taxes (or net loss attributable to
Elizabeth Arden shareholders, less the benefit from income taxes) plus
interest expense, plus depreciation and amortization, plus net income or loss
attributable to noncontrolling interest. EBITDA should not be considered as an
alternative to income from operations or net income attributable to Elizabeth
Arden shareholders (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 without giving effect to
acquisition-related, Elizabeth Arden brand repositioning and restructuring
costs as well as other non-recurring costs. 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
acquisition-related, Elizabeth Arden brand repositioning and restructuring and
other non-recurring costs.

The table below reconciles net income attributable to Elizabeth Arden
shareholders, as determined in accordance with GAAP, to EBITDA and to EBITDA
as adjusted: (For a reconciliation of net income attributable to Elizabeth
Arden shareholders or 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.)

                                            
(Amounts in thousands)                         Three Months Ended
                                               September 30,    September 30,
                                               2013              2012
                                                                      
Net income attributable to Elizabeth Arden     $    1,697        $    2,184
shareholders
Plus:
Provision for income taxes                          414               481
Interest expense, net                               6,032             6,198
Depreciation related to cost of goods sold          1,830             1,531
Depreciation and amortization                       10,699            9,129
Net loss attributable to noncontrolling            (109     )       --
interest
EBITDA                                              20,563            19,523
Non-recurring costs (c)                            6,569            15,064
EBITDA as adjusted                             $    27,132       $    34,587
                                                                      

The table below reconciles net cash flow provided by operating activities, as
determined in accordance with GAAP, to EBITDA:

(Amounts in thousands)                     Three Months Ended
                                             September 30,    September 30,
                                             2013              2012
Net cash used in operating activities        $   (130,655  )   $   (141,261  )
Changes in assets and liabilities, net           144,786           153,011
of acquisitions
Interest expense, net                            6,032             6,198
Amortization of senior note offering and         (343      )       (340      )
credit facility costs
Provision for income taxes                       414               481
Deferred income taxes                            1,935             2,811
Amortization of share-based awards              (1,606    )      (1,377    )
EBITDA                                       $   20,563        $   19,523
                                                                             

(b) The table below reconciles the calculation of (i) gross profit and net
income attributable to Elizabeth Arden shareholders and (ii) net income per
share attributable to Elizabeth Arden shareholders on a basic and diluted
basis from the amounts reported in accordance with GAAP to such amounts before
giving effect to acquisition, restructuring, Elizabeth Arden brand
repositioning and other non-recurring costs. 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 acquisition,
restructuring, Elizabeth Arden brand repositioning and other non-recurring
costs. The presentation in the table below of the non-GAAP information titled
“Gross profit as adjusted,” “Net income attributable to Elizabeth Arden
shareholders as adjusted” and “Net income per basic and diluted share
attributable to Elizabeth Arden shareholders as adjusted” is not meant to be
considered in isolation or as a substitute for gross profit, net income
attributable to Elizabeth Arden shareholders or net income per basic or
diluted share attributable to Elizabeth Arden shareholders prepared in
accordance with GAAP.

(In thousands, except per share data)        Three Months Ended
                                               September 30,   September 30,
                                               2013              2012
                                                                 
Gross Profit:
Gross Profit as reported                       $   148,105       $   147,399
Non-recurring costs (c)                           3,772            14,720
Gross Profit as adjusted                       $   151,877       $   162,119
                                                                     
Net Income Attributable to Elizabeth Arden
Shareholders:
Net income attributable to Elizabeth Arden     $   1,697         $   2,184
shareholders, as reported
Non-recurring costs, net of tax (c) (d)           5,055            11,257
Net income attributable to Elizabeth Arden     $   6,752         $   13,441
shareholders, as adjusted

Net Income Per Basic Share Attributable to
Elizabeth Arden Shareholders:
Net income per basic share attributable to     $   0.06          $   0.07
Elizabeth Arden shareholders, as reported
Non-recurring costs, net of tax (c) (d)           0.17             0.39
                                                                     
Net income per basic share attributable to     $   0.23          $   0.46
Elizabeth Arden shareholders, as adjusted
                                                                     
Net Income Per Diluted Share Attributable
to Elizabeth Arden Shareholders:
Net income per diluted share attributable
to Elizabeth Arden shareholders, as            $   0.06          $   0.07
reported
Non-recurring costs, net of tax (c) (d)           0.16             0.37
                                                                     
Net income per diluted share attributable
to Elizabeth Arden shareholders, as            $   0.22          $   0.44
adjusted
                                                                     

(c) For the three months ended September 30, 2013, gross profit and net income
includes $3.8 million (pre-tax) of non-recurring product changeover costs
related to the repositioning of the Elizabeth Arden brand. In addition, net
income includes (i) $1.8 million (pre-tax) of restructuring expenses and $0.6
million (pre-tax) of related transition costs primarily incurred with respect
to sales positions and other staff positions across various business units
that are being eliminated, and (ii) $0.4 million (pre-tax) of non-recurring
product changeover expenses related to the repositioning of the Elizabeth
Arden brand. For the three months ended September 30, 2012, gross profit and
net income include (i) $11.3 million (pre-tax) of inventory-related costs
primarily for inventory purchased by us from New Wave Fragrances LLC and Give
Back Brands LLC prior to the acquisitions from those companies and other
transition costs, and (ii) $3.4 million (pre-tax) of non-recurring costs
related to the repositioning of the Elizabeth Arden brand. In addition, net
income for the three months ended September 30, 2012, includes (i) $0.3
million (pre-tax) in transition expenses associated with the New Wave
Fragrances LLC and Give Back Brands LLC asset acquisitions and (ii) $0.1
million (pre-tax) of expenses related to the repositioning of the Elizabeth
Arden brand.

(d) On a reported basis, for the three months ended September 30, 2013 and
2012, our effective tax rate, which is calculated as a percentage of income
before income taxes, was 20.7% and 18.1%, respectively. On an adjusted basis,
for the three months ended September 30, 2013 and 2012, our effective tax rate
was 22.5% and 24.2%, respectively.

                              SEGMENT NET SALES

The table below is a comparative summary of our net sales by reportable
segment for the three months ended September 30, 2013 and 2012:

(In thousands)     Three Months Ended               % Increase (Decrease)
                     September        September                 Constant
                     30,                30,
                     2013               2012             (GAAP)      Rates (e)
                                                                             
Segment Net
Sales:
North America        $  224,659       $ 231,557          (3.0% )     (2.6%   )
International          118,950        112,984          5.3%       7.2%    
Total                $  343,609       $ 344,541          (0.3% )     0.6%    
                                                                             

                          PRODUCT CATEGORY NET SALES

The table below is a comparative summary of our net sales by product category
for the three months ended September 30, 2013 and 2012:

(In thousands)       Three Months Ended              % Increase (Decrease)
                       September 30,     September               Constant
                                           30,
                       2013                2012          (GAAP)      Rates (e)
                                                                     
Product Category
Net Sales:
Elizabeth Arden        $    120,524      $ 108,480       11.1 %      12.3   %
Brand
Celebrity,
Lifestyle,                 223,085      236,061        (5.5 %)     (4.7   %)
Designer and Other
Fragrances
Total                  $    343,609      $ 344,541       (0.3 %)     0.6    %
                                                                     

(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 in all periods. 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)                 September 30,     June 30,        September 30,
                               2013              2013            2012
                                                                    
Cash                           $  45,152         $ 61,674        $  35,917
Accounts Receivable, Net          337,530          211,763          310,098
Inventories                       401,860          310,934          396,059
Property and Equipment,           106,815          106,588          89,261
Net
Exclusive Brand Licenses,
Trademarks and                    294,541          296,416          309,806
Intangibles, Net
Goodwill                          31,607           21,054           21,054
Total Assets                      1,319,144        1,103,732        1,265,621
Short-Term Debt                   234,200          88,000           214,000
Current Liabilities               513,509          293,359          483,005
Long-Term Liabilities             285,501          295,091          292,972
Long-Term Debt                    250,000          250,000          250,000
Redeemable Noncontrolling         6,912            --               --
Interest
Shareholders' Equity              513,222          515,282          489,644
Working Capital                   345,049          364,320          340,158
                                                                    


SUPPLEMENTARY CASH FLOW INFORMATION
(Unaudited)
(In thousands)
                                          Three Months Ended
                                          September 30,     September 30,
                                          2013                2012
                                                                            
Net cash used in operating activities     $   (130,655  )     $   (141,261  )
Net cash used in investing activities         (16,310   )         (14,334   )
Net cash provided by financing activities     130,233             132,323
Net decrease in cash and cash equivalents     (16,522   )         (23,163   )
                                                                            

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 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 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;
*   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
    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,
    second lien 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 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, 2008 and June 30, 2009, changes in tax
    laws or tax rates, and our ability to utilize our deferred tax assets;
    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, including our ability
    to successfully and cost effectively implement the last phase of our
    Oracle global enterprise system;
    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, investments in other entities or other intangible
*   assets that could result from a number of factors, including such
    entities’ business performance or 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, 2013.

Contact:

Elizabeth Arden
Marcey Becker, 212-261-1068
Senior Vice President, Finance
or
Investors/Press:
Integrated Corporate Relations
Allison Malkin/Michael Fox
203-682-8200
 
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