Elizabeth Arden CEO pleased with Q1 fiscal 2009 results

07 Nov '08

5 min read

Elizabeth Arden Inc announced financial results for its first fiscal quarter ended September 30, 2008. For the first fiscal quarter ended September 30, 2008, net sales rose 4.6% to $284.2 million. Excluding the unfavorable impact of foreign currency translation, net sales increased 4.8% as compared to the prior year period.

Net income for the first fiscal quarter ended September 30, 2008, excluding expenses related to the recent Liz Claiborne license agreement and restructuring expenses, was $3.1 million, or $0.11 per diluted share, versus net income, excluding restructuring expenses, of $1.1 million, or $0.04 per diluted share, for the prior year period.

On a reported basis, net loss for the first quarter of fiscal 2009 was $12.5 million, or $0.45 per share, compared to net income of $0.4 million, or $0.01 per share, for the prior year period.

E. Scott Beattie, Chairman, President and Chief Executive Officer of Elizabeth Arden, Inc., commented, "We were pleased with our results this quarter, which were essentially on plan, particularly given the global economic weakness and foreign currency volatility. Net sales of our North America fragrance business increased by 9%, driven largely by the contribution from the Liz Claiborne brands and our new launches. The integration of the Liz Claiborne fragrance business has gone very well and is nearly complete. Our new launches, including new fragrance brands from Juicy Couture, Usher and Mariah Carey, as well as the Rocawear 9IX fragrance, performed well. Prevage Body was also introduced in the U.S. this quarter, which led to a 27% increase in net sales of the Prevage franchise. Net sales of our international business rose by 1%, which was on top of an 18% increase in the first quarter of the prior year."

Mr. Beattie continued, "We also continue to make progress with our supply chain and re-engineering initiatives, which contributed to our improved operating performance this quarter. Gross margins (adjusted for Liz Claiborne-related expenses) and operating cash flow improved this quarter, and despite the incremental Liz Claiborne inventory purchased in June in connection with the license agreement, we only had a slight increase in inventory levels as compared to the first fiscal quarter of the prior year. We remain on track with the execution of these initiatives, which are even more important in this difficult economic environment."

In July 2008, the Company increased its credit facility, which expires in December 2012, to $325 million from $250 million. The Company believes it has ample liquidity to finance its ongoing working capital, capital expenditure and other requirements for the foreseeable future. The Company's borrowings under its credit facility peaked in October and borrowing availability as of the end of October 2008 was $56.0 million.

The Company's $80 million common stock repurchase plan was set to expire on November 30, 2008. As such, on November 5, 2008, the Company's Board of Directors authorized the extension of its common stock repurchase plan at the same $80 million limit to November 30, 2010. Under the program, the Company may, from time to time, purchase shares of its common stock in the open market or in privately negotiated transactions based on such factors as the Company deems appropriate. To date, the Company has repurchased $41.3 million of common stock under its $80 million stock repurchase plan.

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