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Elizabeth Arden announces Q2 fiscal 2010 results

28
Jan '10
Elizabeth Arden, Inc. a global prestige beauty products company, announced financial results for its second fiscal quarter ended December 31, 2009.

Second Quarter Results

For the quarter ended December 31, 2009, the Company reported net sales of $393.3 million, an increase of 6.3%, as compared to the second quarter of the prior fiscal year. Excluding the favorable impact of foreign currency translation, net sales increased by 3.3%.

Net income per diluted share for the second fiscal quarter ended December 31, 2009 was $0.73, as compared to net income per diluted share of $0.48 for the prior year period. Excluding restructuring and other expenses associated with the Company's Global Efficiency Re-engineering initiative, net income per diluted share for the three months ended December 31, 2009 was $0.80, as compared to net income per diluted share of $0.61 for the prior year period. The prior year period also excludes expenses and non-cash charges related to the Liz Claiborne license agreement. A reconciliation between GAAP and adjusted results can be found in the tables and footnotes at the end of this press release.

E. Scott Beattie, Chairman, President and Chief Executive Officer of Elizabeth Arden, Inc., commented, "Our results for the second quarter reflect an improved balance between shipments and retail sales at certain of our North American mass retail customers, continued strong sales performance in our Asia-Pacific business, which increased by 19% this quarter, and momentum in our travel retail business. Although we saw revenues accelerate during the second quarter, our retailers are still managing inventories conservatively and, as such, we are still using caution regarding our second half revenue projections."

Mr. Beattie continued, "We are continuing to focus on improving the efficiency of our business processes, which are driving improvement in gross margins, EBITDA margins and working capital utilization. I am extremely pleased with the continued momentum we are seeing in these metrics and the related improvement in cash flow, return on invested capital, and the de-leveraging of our balance sheet. More specifically, adjusted gross margins increased by 270 basis points in the second fiscal quarter, and inventory declined by $126 million, or 32%, as compared to December 2008 levels. This contributed to fiscal year-to-date cash flow from operations of $77 million and an $80 million, or 55%, reduction in our credit line balance as compared to the end of the second fiscal quarter of the prior year. As such, we are raising our guidance for cash flow from operations for fiscal 2010 from a range of $50 million to $60 million to a range of $70 million to $75 million."

Six Months Results

For the six months ended December 31, 2009, the Company reported net sales of $658.5 million, an increase of 0.7%, or a decrease of 0.3% excluding the favorable impact of foreign currency, ascompared to the prior year period. Net income per diluted share was $0.74, as compared to $0.04 for the prior year period. Excluding restructuring and other expenses associated with the Company's Global Efficiency Re-engineering initiative, net income per diluted share was $0.85, as compared to net income per diluted share of $0.71 for the prior year period. The prior year period also excludes expenses and non-cash charges related to the Liz Claiborne license agreement.


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