Elizabeth Arden Inc. (RDEN) filed Quarterly Report for the period ended 2009-09-30.
Elizabeth Arden is a leading global marketer and manufacturer of prestige beauty products. The Company's portfolio of leading brands includes the fragrance brands Red Door Elizabeth Arden green tea 5th Avenue White Shoulders Elizabeth Taylor's White Diamonds and Passion Geoffrey Beene's Grey Flannel Halston Halston Z-14 PS Fine Cologne for Men Design and Wings by Giorgio Beverly Hills; the Elizabeth Arden skin care brands Visible Difference Ceramides and Millenium; and the Elizabeth Arden cosmetics line. Elizabeth Arden Inc. has a market cap of $329.4 million; its shares were traded at around $11.41 with a P/E ratio of 24.8 and P/S ratio of 0.4.
Highlight of Business Operations:
will have incurred approximately $12.0 million to $14.0 million, before taxes, of these expenses by the end of fiscal 2010. Through September 30, 2009, we have incurred a total of $9.2 million of these expenses before taxes, which includes $5.2 million for Initiative-related restructuring and $4.0 million of other one time Initiative-related expenses. See Note 4 to Notes to Unaudited Consolidated Financial Statements.
Segment profit excludes depreciation and amortization, interest expense and unallocated corporate expenses, which are shown in the table below reconciling segment profit to consolidated net income (loss) before income taxes. Included in unallocated corporate expenses are (i) adjustments to eliminate intercompany mark-up, (ii) employee incentive costs, (iii) restructuring charges, and (iv) costs related to the Initiative. Unallocated corporate expenses for the three months ended September 30, 2008 also include $19.1 million of expenses ($15.4 million of which did not require the use of cash) related to our Liz Claiborne license agreement due to Liz Claiborne inventory that was purchased at a higher cost prior to the June 2008 effective date of the license agreement, and transition expenses. Restructuring charges and costs related to the Initiative are also recorded in unallocated corporate expenses as these decisions are centrally directed and controlled, and are not included in internal measures of segment operating performance. We do not have any intersegment sales.
Net sales decreased by 9.7% or $9.2 million. Excluding the unfavorable impact of foreign currency translation, net sales decreased by 5.1 % or $4.8 million, primarily due to Elizabeth Arden branded products. The sales declines included $4.9 million of lower net sales to distributor markets and travel retail outlets due to a reduction in passenger traffic, as well as lower sales in Europe. Partially offsetting these declines were higher sales in the Asia Pacific region and incremental sales due to the launch of the Alberta Ferretti fragrance. Other
SG&A. Selling, general and administrative expenses decreased 5.0%, or $5.4 million, for the three months ended September 30, 2009, compared to the three months ended September 30, 2008. The decrease was principally due to (i) transition expenses of $2.7 million in the prior year period related to the license of the Liz Claiborne fragrance brands, (ii) lower general and administrative expenses of $2.1 million for the three months ended September 30, 2009, principally due to lower incentive compensation costs, and (iii) lower sales overhead expenses of $1.6 million. Additionally, the current year period benefited from a $1.3 million favorable impact of foreign currency translation of our international affiliates' balance sheets as compared to a loss in the prior year period of $2.1 million. These decreases were partially offset by higher advertising and promotion costs of $2.8 million. For the three months ended September 30, 2009 and 2008, total share-based compensation cost charged against income for all stock plans was $1.3 million and $1.4 million, respectively.
Segment profit was $0.6 million compared to a loss of $6.6 million for the three months ended September 30, 2008. The improvement in segment results was primarily due to improved gross margins due to a higher proportion of basic product sales, which have higher gross margins as compared to promotional products. In addition, selling, general and
Net Income/loss. Net income for the three months ended September 30, 2009, was $40,000, compared to a loss of $12.5 million for the three months ended September 30, 2008. The increase in net income was primarily the result of $19.1 million of inventory charges and transition expenses ($15.4 million of which did not require the use of c
RDEN is in the portfolios of NWQ Managers of NWQ Investment Management Co.
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