Elizabeth Arden announces Q4 & fiscal 2008 results

14 Aug '08

5 min read

Elizabeth Arden Inc, a global prestige beauty products company, announced financial results for the fourth fiscal quarter and year ended June 30, 2008.

FISCAL 2008 RESULTS:
For the fiscal year ended June 30, 2008, net sales rose 1.2% to $1,141.1 million. Excluding the favorable impact of foreign currency translation, net sales decreased 0.4% as compared to the prior year period.

Net income, excluding charges, for fiscal 2008 was $38.1 million, or $1.31 per diluted share, versus net income of $39.1 million, or $1.36 per diluted share, for fiscal 2007. On a reported basis, net income for fiscal 2008 was $19.9 million, or $0.68 per diluted share, compared to $37.3 million, or $1.30 per diluted share, for the prior year period.

In May 2008, the Company announced an exclusive long-term global licensing agreement for the Liz Claiborne fragrance brands, which became effective on June 9, 2008. In the fourth fiscal quarter, the Company incurred expenses related to the Liz Claiborne transaction of $19.6 million (pre-tax).

In addition, in connection with this new license, the Company discontinued certain brands and products resulting in a product discontinuation charge of $7.5 million (pre-tax). The reported results also include restructuring charges, primarily relating to the Company's previously announced supply chain re-engineering project, of $3.0 million (pre-tax). The non-cash portion of these above mentioned charges was $11.5 million.

E. Scott Beattie, Chairman, President and Chief Executive Officer of Elizabeth Arden, Inc., commented, "We finished the year in-line with the expectations that we outlined last quarter. Our international business grew 9.2%, or 4.2% in constant currency rates this year. Our North America fragrance business declined 1.5%, largely due to the decline in the U.S. department store business, while our mass retail business was flat year on year, reflecting the difficult consumer environment."

Mr. Beattie continued, "As we look to fiscal 2009, we expect the Liz Claiborne transaction to provide us with significant incremental sales and earnings growth, particularly in our North America fragrance business. The integration of the Liz Claiborne fragrance business is currently on track. We have strengthened our sales organization with minimal incremental headcount additions to our sales force, and all of the key marketing personnel associated with the Liz Claiborne fragrances already have joined us in our New York City offices. Lastly, we are scheduled to exit the Liz Claiborne distribution facility as originally planned by the end of August 2008."

Mr. Beattie added, "We also are on track with the re-engineering of our extended supply chain, logistics and transaction processing systems and continue to anticipate savings of approximately $10.0 million to $12.0 million by the end of fiscal 2009 and an additional approximately $13.0 million to $15.0 million by theend of fiscal 2010. We expect these savings and the contribution from the Liz Claiborne fragrances to drive strong growth in sales and earnings for fiscal 2009.

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