Elizabeth Arden, Inc. announced financial results for the three and twelve month periods, and the five month transition period, ended June 30, 2004 and provided guidance for its new fiscal year ending June 30, 2005. As previously announced, the Company recently changed its fiscal year end from January 31 to June 30.
Net sales increased 17.2% to $154.6 million for the three months ended June 30, 2004 from $131.9 million in the comparable period of the prior year. Net sales for the period were driven by an increase in fragrance sales to mass retail customers, the launch of the Elizabeth Arden Provocative Woman fragrance in April in the U.S., improved travel retail performance and the favorable impact of foreign currency rates. Gross margin expanded to 41.7% for the three-month period from 39.1% recorded in the prior year period. Net loss per share improved by $0.55 to a loss of $0.35 per share for the three months ended June 30, 2004 as compared to a loss of $0.90 per share for the comparable prior year period.
Earnings results exclude the remaining restructuring charges related to the consolidation of the Company's U.S. distribution facilities, net of related tax benefits. In addition, these results exclude the non-cash charge for the accelerated accretion associated with the conversion of the remaining Series D convertible preferred stock owned by Unilever, which was converted into common stock and sold in a secondary offering in June 2004. The Company also sold 231,793 shares in the offering from the exercise of the underwriter's over-allotment option and used the net proceeds of approximately $4.3 million to repay amounts outstanding under its revolving credit facility.
For the full twelve-month period ended June 30, 2004, net sales increased 11.5% to $832.0 million from $746.1 million in the prior year period and earnings per share was $1.01 as compared to $0.34 in the comparable period of the prior year. Earnings results exclude the charges discussed above associated with the Company's restructuring activities, the debt extinguishment charges associated with the Company's refinancing activities completed in February 2004, as well as the non-cash charge for the accelerated accretion associated with the conversion of the Series D convertible preferred stock.
The unaudited consolidated income statements for the three and twelve month periods ended June 30, 2004 will be posted today at 11:00 a.m., Eastern Standard Time, on the Company's website at http://www.elizabetharden.com. Please refer to "Corporate Information-Investor Information - New Fiscal Year Financial Data."
E. Scott Beattie, Chairman and Chief Executive Officer of Elizabeth Arden, Inc., commented, "Overall, we are pleased with our results. Performance has been solid across all of our selling units, and retail sales globally continue to support our revenue and earnings targets for this fiscal year. The significant top line growth, the benefits of all of our refinancing activities and strong working capital management led to a $25 million, or 35%, improvement in our cash flow from operations for this five month transition period, despite investing significantly in our brands. From an operational standpoint, the consolidation of our distribution facilities has already begun contributing to our results, and we are on track to deliver our expected full year savings.
"Our innovation activities have been exciting. In June, we introduced to the beauty industry Curious by Britney Spears, the new fragrance under the Britney Spears license, which received an extremely enthusiastic reception by our retail partners. Curious is rolling out to U.S. department stores beginning in September and in international markets in the spring of 2005. We also were pleased with the successful introduction of Elizabeth Arden Provocative Woman, which, with the support of a new television campaign featuring Catherine Zeta-Jones, was launched in the U.S. this spring and is scheduled to ship to our international markets this fall. Both new fragrances will be further supported with heavy print and television advertising during the upcoming holiday season."