Elizabeth Arden, Inc. (NASDAQ:RDEN), a global prestige beauty products company, today announced financial results for its third quarter of fiscal 2016 ended March 31, 2016.

The Company continues to execute its turnaround plans. The Company posted its fifth consecutive quarter of constant currency net sales growth for both the Elizabeth Arden brand and its International segment and returned its non-Elizabeth Arden branded fragrance business and North American segment to constant currency net sales growth during the third fiscal quarter. Fiscal third quarter and year-to-date adjusted gross margins also increased by 260 and 110 basis points, respectively.

FINANCIAL RESULTS

A reconciliation between GAAP and adjusted results can be found in the tables and footnotes at the end of this press release.

Third Quarter ended March 31, 2016:
   

•

GAAP net sales were $191.9 million, an increase of 0.1% from the prior year period, or an increase of 3.7% at constant foreign currency rates.

•

Adjusted net sales, excluding non-recurring adjustments that increased net sales in the prior year period, improved by 3.8% at constant foreign currency rates.

•

GAAP net loss per diluted share was $0.95.

•

Adjusted net loss per diluted share was $0.59, as compared to a net loss per diluted share of $0.86 for the prior year period.

•

By segment, North America segment net sales increased by 1.0%, and International segment net sales increased by 7.5%, in both cases at constant foreign currency rates.
 
Nine Months ended March 31, 2016:
   

•

GAAP net sales were $774.1 million, a decrease of 2.7% from the prior year period, or an increase of 1.7% at constant foreign currency rates.

•

Adjusted net sales, excluding non-recurring charges impacting net sales in the prior year period, were flat at constant foreign currency rates.

•

GAAP net loss per diluted share was $1.69.

•

Adjusted net loss per diluted share, excluding non-recurring and other items, was $0.67, as compared to a net loss per diluted share of $1.01 for the prior year period.

•

By segment, North America segment net sales decreased by 3.8%, and International segment net sales increased by 6.0%, in both cases at constant foreign currency rates.
 

KEY INITIATIVES

All figures below are on an adjusted and constant foreign currency basis:

Drive the Elizabeth Arden Brand: Net sales of the Company's Elizabeth Arden branded products increased by 5% during the third fiscal quarter. The Company’s slate of innovation continues and is performing ahead of plan in virtually all markets, driving an improvement in retail sales. The Company also launched an enhanced social media campaign for the Elizabeth Arden brand to drive global demand.

Grow the Fragrance Portfolio: Net sales of non-Elizabeth Arden branded fragrances increased by 3% for the quarter. Net sales of the Company's designer fragrances increased by 20% during the period behind strong momentum in the John Varvatos fragrance brand and growth in Juicy Couture fragrances.

Improve Go-To-Market Capability and Execution: Net sales growth momentum continued during the third fiscal quarter for the Company's International segment, including a net sales increase of 27% for the European region, with the improved performance of the Elizabeth Arden brand driving the growth. The Company recently restructured the leadership team in China to improve its capability in this priority market and recently hired a senior executive for the Latin American market.

Optimize Costs and Reduce Complexity to Drive Gross Margin: Overall results to date are in line with the Company's internal plans, and its business transformation initiatives continue to drive down costs and improve efficiencies. Adjusted gross margins for the third quarter increased by 260 basis points to 44.2% and by 110 basis points year-to-date. In addition, the Company is ahead of plan in achieving its cash flow budget, and its cost savings initiatives are on track to exceed the high end of its previously communicated estimate of approximately $47 million to $50 million of annualized savings.

OUTLOOK

The Company currently expects the following for fiscal 2016 (on an adjusted basis):
   

•

Net sales increases driven by the International business and the Elizabeth Arden brand (at constant foreign currency rates);

•

Foreign currency headwinds to negatively impact full year net sales growth by approximately 3.5%;

•

Gross margin expansion primarily due to better sales mix, improved commercial execution and improved cost structure;

•

Lower overall selling, general and administrative expenses, with lower indirect overhead costs and targeted reinvestment in advertising to accelerate revenue growth; and

•

Improved EBITDA margins from gross margin expansion and lower indirect overhead expenses.
 

The Company expects to comment on fiscal 2017 in its fiscal 2016 year end press release and conference call in August 2016.

The Company will host a conference call today, May 5, 2016 at 9:30 a.m. Eastern Time. All interested parties can listen to a live web cast of the Company's conference call by visiting the Investor Relations section of the Corporate tab on the Company's web site at http://ir.elizabetharden.com. An online archive of the broadcast will be available within one hour of the completion of the call and will be accessible on the Company's web site until June 5, 2016.

Elizabeth Arden is a global prestige beauty products company with an extensive portfolio of prestige beauty brands sold in over 120 countries. The Company's brand portfolio includes Elizabeth Arden skin care, color and fragrance products; its professional skin care line, Elizabeth Arden PRO; the celebrity fragrance brands of Justin Bieber, Mariah Carey, Nicki Minaj and Taylor Swift; the designer fragrance brands of Juicy Couture, John Varvatos and Wildfox Couture; and the heritage fragrance brands of Alfred Sung, Britney Spears, Curve, BCBGMAXAZRIA, Elizabeth Taylor, Geoffrey Beene, Giorgio Beverly Hills, Halston, Ed Hardy, Jennifer Aniston, Lucky Brand, Rocawear, PS Fine Cologne and White Shoulders.

 
ELIZABETH ARDEN, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF OPERATIONS

(Unaudited)

(In thousands, except percentages and per share data)

 
        Three Months Ended   Nine Months Ended
March 31,   March 31, March 31,   March 31,
2016     2015 2016     2015
Net Sales $       191,932 $       191,653 $       774,082 $       795,638
Cost of Goods Sold:
Cost of Sales 106,287 110,058 431,934 460,146
Depreciation Related to Cost of Goods Sold         1,420         1,957         4,489         5,916
Total Cost of Goods Sold 107,707 112,015 436,423 466,062
 
Gross Profit 84,225 79,638 337,659 329,576
Gross Profit Percentage 43.9 % 41.6 % 43.6 % 41.4 %
 
Selling, General and Administrative Expenses 95,194 97,463 336,626 391,533
Depreciation and Amortization         8,896         9,547         27,581         31,055
Total Operating Expenses 104,090 107,010 364,207 422,588
 
Interest Expense, Net 7,345 7,055 22,365 22,523

Debt Extinguishment Charges

        --         --         --         239
Loss Before Income Taxes (27,210 ) (34,427 ) (48,913 ) (115,774 )
Provision for Income Taxes         529         500         1,433         1,557
Net Loss (27,739 ) (34,927 ) (50,346 ) (117,331 )

Net Income (Loss) Attributable to
  Noncontrolling Interests

        39         (481 )         (1,690 )         (1,396 )

Net Loss Attributable to Elizabeth
  Arden Shareholders

(27,778 ) (34,446 ) (48,656 ) (115,935 )

Less: Accretion and Dividends on Preferred
  Stock

        624         615         1,937         21,700

Net Loss Attributable to Elizabeth
  Arden Common Shareholders

$       (28,402 ) $       (35,061 ) $       (50,593 ) $       (137,635 )
 

As reported:

 

Net Loss Per Diluted Share
  Attributable to Elizabeth Arden Common
  Shareholders

$ (0.95 ) $ (1.18 ) $ (1.69 ) $ (4.62 )
 
Basic Shares 29,949 29,812 29,881 29,801
Diluted Shares 29,949 29,812 29,881 29,801
 
EBITDA (a) $ (9,549 ) $ (15,868 ) $ 5,522 $ (56,280 )
EBITDA margin (a) (5.0 )% (8.3 )% 0.7 % (7.1 )%
 

Adjusted to exclude non-recurring costs, net of
taxes:

 
Net Sales $ 191,932 $ 191,364 $ 774,082 $ 810,610
Gross Profit $ 84,739 $ 79,642 $ 342,053 $ 349,421
Gross Profit Percentage 44.2 % 41.6 % 44.2 % 43.1 %
 

Net Loss Per Diluted Share
  Attributable to Elizabeth Arden Common
  Shareholders

$ (0.59 ) $ (0.86 ) $ (0.67 ) $ (1.01 )
 
EBITDA (a) $ (7,221 ) $ (15,732 ) $ 22,840 $ 16,594
EBITDA margin (a) (3.8 )% (8.2 )% 3.0 % 2.0 %
 
(a) EBITDA is defined as net income attributable to Elizabeth Arden common shareholders plus the provision for income taxes (or net loss attributable to Elizabeth Arden common shareholders, less the benefit from income taxes or plus the provision for income taxes) plus interest expense, plus depreciation and amortization, plus net income (or net loss) attributable to noncontrolling interest, plus accretion and dividends on preferred stock. EBITDA should not be considered as an alternative to income (loss) from operations or net income (loss) attributable to Elizabeth Arden common shareholders (as determined in accordance with generally accepted accounting principles (GAAP) as a measure of our operating performance or to net cash provided by (used in) operating activities (as determined in accordance with GAAP) as a measure of our ability to meet cash needs. We believe that EBITDA is a measure commonly reported and widely used by investors and other interested parties as a measure of a company's operating performance and debt servicing ability because it assists in comparing performance on a consistent basis without regard to capital structure, depreciation and amortization, preferred stock accretion or dividends or non-operating factors (such as historical cost). Accordingly, as a result of our capital structure, we believe EBITDA is a relevant measure. This information has been disclosed here to permit a more complete comparative analysis of our operating performance relative to other companies and of our debt servicing ability. EBITDA may not, however, be comparable in all instances to other similar types of measures. We have also disclosed EBITDA as adjusted without giving effect to the 2014 Performance Improvement Plan, the 2016 Business Transformation Program and other non-recurring costs. This disclosure is being provided for comparability purposes because we believe it is meaningful to our investors and other interested parties to understand the EBITDA performance of the Company on a consistent basis without regard to the effect of charges related to the 2014 Performance Improvement Plan, the 2016 Business Transformation Program and other non-recurring costs.
 

The table below reconciles net loss attributable to Elizabeth Arden common shareholders, as determined in accordance with GAAP, to EBITDA and to EBITDA as adjusted: (For a reconciliation of net income (loss) attributable to Elizabeth Arden common shareholders or net income (loss) to EBITDA for prior periods, see the Company's filings with the Securities and Exchange Commission which can be found on the Company's website at www.elizabetharden.com).

           
(In thousands) Three Months Ended Nine Months Ended
March 31,
2016		     March 31,
2015		 March 31,
2016		     March 31,
2015

Net Loss Attributable to Elizabeth Arden
  Arden Common Shareholders

$       (28,402 ) $       (35,061 ) $       (50,593 ) $       (137,635 )
Plus:
Provision for Income Taxes 529 500 1,433 1,557
Interest expense, net 7,345 7,055 22,365 22,523
Depreciation related to cost of goods sold 1,420 1,957 4,489 5,916
Depreciation and amortization 8,896 9,547 27,581 31,055

Net income (loss) attributable to noncontrolling interest

39 (481 ) (1,690 ) (1,396 )
Accretion and dividends on preferred stock         624         615         1,937         21,700
EBITDA (9,549 ) (15,868 ) 5,522 (56,280 )
Non-recurring and other costs         2,328         136         17,318         72,874
EBITDA, as adjusted $       (7,221 ) $       (15,732 ) $       22,840 $       16,594
 

The table below reconciles net cash flow (used in) provided by operating activities, as determined in accordance with GAAP, to EBITDA:

       
(Amounts in thousands) Nine Months Ended
March 31,
2016		       March 31,
2015
Net cash (used in) provided by operating activities $       (42,021 ) $       40,590
Changes in assets and liabilities, net of acquisitions 28,981 (73,207 )
Interest expense, net 22,365 22,523
Amortization of senior note offering and credit facility costs (1,248 ) (1,200 )
Amortization of senior note premium 637 599
Provision for income taxes 1,433 1,557
Deferred income taxes (489 ) 51
Amortization of share-based awards (4,136 ) (4,028 )
Asset impairments -- (42,926 )
Debt extinguishment charges         --         (239 )
EBITDA $       5,522 $       (56,280 )
 

The tables below reconcile the amounts reported in accordance with GAAP to such amounts before giving effect to charges related to the 2014 Performance Improvement Plan, the 2016 Business Transformation Program, and other non-recurring costs. This disclosure is being provided for comparability purposes because we believe it is meaningful to our investors and other interested parties to understand our operating performance on a consistent basis without regard to the effect of charges related to the 2014 Performance Improvement Plan, the 2016 Business Transformation Program and other non-recurring costs. The presentation in the table below of the non-GAAP information included in the "Adjusted" columns is not meant to be considered in isolation or as a substitute for results prepared in accordance with GAAP.

 
ELIZABETH ARDEN, INC. AND SUBSIDIARIES

Reconciliation of GAAP to Adjusted Amounts

(In thousands, except percentages and per share data)

 
        Three Months Ended     Three Months Ended
March 31, 2016 March 31, 2015
Reported     Adjustments   Adjusted Reported   Adjustments   Adjusted
Net Sales $       191,932 $       -- $       191,932 $       191,653 $       (289 )(e) $       191,364
Cost of Goods Sold:
Cost of Sales 106,287 (514

)(a)

105,773 110,058 (293 )(f) 109,765
Depreciation Related to Cost of Goods Sold         1,420         --         1,420         1,957         --         1,957
Total Cost of Goods Sold $ 107,707 $ (514 ) $ 107,193 $ 112,015 $ (293 ) $ 111,722
 
Gross Profit 84,225 514 84,739 79,638 4 79,642
Gross Profit Percentage 43.9 % 44.2 % 41.6 % 41.6 %
Selling, General and Administrative Expenses 95,194 (1,814

)(b)

93,380 97,463 (132 )(g) 97,331
Depreciation and Amortization         8,896         (114

)(c)

        8,782         9,547         --         9,547
Total Operating Expenses 104,090 (1,928 ) 102,162 107,010 (132 ) 106,878
Interest Expense, Net 7,345 -- 7,345 7,055 -- 7,055
Debt Extinguishment Charges         --         --         --         --         --         --
Loss Before Income Taxes (27,210 ) 2,442 (24,768 ) (34,427 ) 136 (34,291 )
Provision for (Benefit from) Income Taxes         529         (8,155

)(d)

        (7,626 )         500         (9,389 )(h)         (8,889 )
Net (Loss) (27,739 ) 10,597 (17,142 ) (34,927 ) 9,525 (25,402 )

Net Income (Loss) Attributable to Noncontrolling
  Interests

        39         (34 )         5         (481 )         184         (297 )

Net Loss Attributable to Elizabeth
  Arden Shareholders

(27,778 ) 10,631 (17,147 ) (34,446 ) 9,341 (25,105 )
Less: Accretion and Dividends on Preferred Stock         624         --         624         615         --         615

Net Loss Attributable to Elizabeth
  Arden Common Shareholders

$       (28,402 ) $       10,631 $       (17,771 ) $       (35,061 ) $       9,341 $       (25,720 )
 
EBITDA $ (9,549 ) $ 2,328

(a)(b)

$ (7,221 ) $ (15,868 ) $ 136 (e)(f)(g) $ (15,732 )
 

Net Loss Per Basic Share Attributable to
  Elizabeth Arden Common Shareholders

$ (0.95 ) 0.36 $ (0.59 ) $ (1.18 ) $ 0.32 $ (0.86 )
 

Net Loss Per Diluted Share Attributable to
  Elizabeth Arden Common Shareholders

$ (0.95 ) 0.36 $ (0.59 ) $ (1.18 ) $ 0.32 $ (0.86 )
 

(a)  Includes $0.5 million of inventory costs under our 2016 Business Transformation Program related to changes in certain distribution and customer arrangements.

(b)  Includes $1.8 million in expenses under the 2016 Business Transformation Program, primarily comprised of severance and other employee-related expenses and related transition costs.

(c)  Includes $0.1 million for the acceleration of depreciation expense for leasehold improvements related to leased space vacated under the 2016 Business Transformation Program.

(d)  On a reported and adjusted basis, our effective tax rate was (1.9)% and 30.8%, respectively. The reported tax rate includes valuation allowances of $9.2 million against our U.S. deferred tax assets, and $0.8 million of valuation allowances against deferred tax assets in certain foreign operations recorded as non-cash charges to income tax expense.

(e)  Includes $(0.3) million of adjustments for returns and markdowns previously recorded under our 2014 Performance Improvement Plan primarily due to changes to our customer and distribution arrangements.

(f)   Includes $0.3 million (non-cash) of inventory write-downs under our 2014 Performance Improvement Plan due to discontinuation of certain products

(g)  Includes $0.2 million of severance, other employee-related expenses and related transition costs associated with the reduction in global headcount positions.

(h)  On a reported and adjusted basis, our effective tax rate was (1.5)% and 25.9%, respectively. The reported tax rate includes valuation allowances of $11.2 million against our U.S. deferred tax assets recorded as a non-cash charge to income tax expense.

 
ELIZABETH ARDEN, INC. AND SUBSIDIARIES

Reconciliation of GAAP to Adjusted Amounts

(In thousands, except percentages and per share data)

 
        Nine Months Ended     Nine Months Ended
March 31, 2016 March 31, 2015
Reported     Adjustments   Adjusted Reported     Adjustments   Adjusted
Net Sales $       774,082 $       -- $       774,082 $       795,638 $       14,972 (e) $       810,610
Cost of Goods Sold:
Cost of Sales 431,934 (4,394 )(a) 427,540 460,146 (4,873 )(f) 455,273
Depreciation Related to Cost of Goods Sold         4,489         --         4,489         5,916         --         5,916
Total Cost of Goods Sold $ 436,423 $ (4,394 ) $ 432,029 $ 466,062 $ (4,873 ) $ 461,189
 
Gross Profit 337,659 4,394 342,053 329,576 19,845 349,421
Gross Profit Percentage 43.6 % 44.2 % 41.4 % 43.1 %
Selling, General and Administrative Expenses 336,626 (12,924 )(b) 323,702 391,533 (52,790 )(g) 338,743
Depreciation and Amortization         27,581         (342 )(c)         27,239         31,055         --         31,055
Total Operating Expenses 364,207 (13,266 ) 350,941 422,588 (52,790 ) 369,798
Interest Expense, Net 22,365 -- 22,365 22,523 -- 22,523
Debt Extinguishment Charges         --         --         --         239         (239 )(h)         --
Loss Before Income Taxes (48,913 ) 17,660 (31,253 ) (115,774 ) 72,874 (42,900 )
Provision for (Benefit from) Income Taxes         1,433         (13,020 )(d)         (11,587 )         1,557         (15,234 )(i)         (13,677 )
Net Loss (50,346 ) 30,680 (19,666 ) (117,331 ) 88,108 (29,223 )
Net Loss Attributable to Noncontrolling Interests         (1,690 )         194         (1,496 )         (1,396 )         767         (629 )

Net Loss Attributable to Elizabeth
  Arden Shareholders

(48,656 ) 30,486 (18,170 ) (115,935 ) 87,341 (28,594 )

Less: Accretion and Dividends on Preferred Stock

        1,937         --         1,937         21,700         (20,151 )         1,549

Net Loss Attributable to Elizabeth
  Arden Common Shareholders

$       (50,593 ) $       30,486 $       (20,107 ) $       (137,635 ) $       107,492 $       (30,143 )
EBITDA 5,522 17,318 (a)(b) $ 22,840 $ (56,280 ) $ 72,874 (e)(f)

(g)(h)

$ 16,594
 

Net Loss Per Basic Share Attributable to
  Elizabeth Arden Common Shareholders

$ (1.69 ) 1.02 $ (0.67 ) $ (4.62 ) $ 3.61 $ (1.01 )
 

Net Loss Per Diluted Share Attributable to
  Elizabeth Arden Common Shareholders

$ (1.69 ) 1.02 $ (0.67 ) $ (4.62 ) $ 3.61 $ (1.01 )
 

(a)  Includes $4.4 million of inventory costs under our 2016 Business Transformation Program, primarily related to the closing of our Brazilian affiliate, as well changes in certain distribution and customer arrangements.

(b)  Includes $12.9 million in expenses under the 2016 Business Transformation Program, primarily comprised of severance and other employee-related expenses and related transition costs.

(c)  Includes $0.3 million for the acceleration of depreciation expense for leasehold improvements related to leased space vacated under the 2016 Business Transformation Program.

(d)  On a reported and adjusted basis, our effective tax rate was (2.9)% and 37.1%, respectively. The reported tax rate includes valuation allowances of $10.4 million against our U.S. deferred tax assets and $3.2 million against deferred tax assets in certain foreign operations recorded as non-cash charges to income tax expense.

(e)  Includes $15.0 million of returns and markdowns under our 2014 Performance Improvement Plan primarily due to changes to our distribution strategy in China and other customer and distribution arrangements.

(f)   Includes $4.9 million of inventory write-downs under our 2014 Performance Improvement Plan due to discontinuation of certain products.

(g)  Includes (i) $9.0 million in expenses under our 2014 Performance Improvement Plan primarily comprised of $4.5 million of customer and vendor contract termination costs, $4.4 million of severance, other employee-related expenses and related transition costs, and $0.1 million in asset impairment charges, and (ii) $43.8 million in asset impairment charges primarily related to the write off of the celebrity fragrance licenses acquired from Give Back Brands and other costs.

(h)  Represents $0.2 million (non-cash) of debt extinguishment costs resulting from the December 2014 amendment to our credit facility.

(i)  On a reported and adjusted basis, our effective tax rate was (1.3%) and 31.9%, respectively. The reported tax rate includes valuation allowances of $39.7 million against our U.S. and certain foreign deferred tax assets recorded as a non-cash charge to income tax expense.

 
SEGMENT NET SALES
 

The table below is a comparative summary of our net sales by reportable segment for the three and nine months ended March 31, 2016 and 2015:

 

 
(In thousands)   Three Months Ended % (Decrease)
Increase		   Nine Months Ended   % (Decrease)
Increase
March 31,
2016		   March 31,
2015		 GAAP   Constant
Rates (1)		 March 31,
2016		   March 31,
2015		 GAAP   Constant
Rates (1)
Segment Net Sales        
North America $ 107,731 $ 107,511 0.2 % 1.0 % $ 482,920 $ 507,145 (4.8 )% (3.8 )%
International   84,201     83,853 0.4 %   7.5 %   291,162     303,465 (4.1 )%   6.0 %
Total $ 191,932   $ 191,364 0.3 %   3.8 % $ 774,082   $ 810,610 (4.5 )%   (0.1 )%
 
Reconciliation:
Segment Net Sales $ 191,932 $ 191,364 -- -- $ 774,082 $ 810,610 -- --
Less:
Unallocated sales
returns and
markdowns (2) 		  --     (289 ) --    

--

 

  --     14,972 --    

--

 

Net Sales $ 191,932   $ 191,653 0.1 %   3.7 % $ 774,082   $ 795,638 (2.7 )%   1.7 %
 
 

PRODUCT CATEGORY NET SALES

 

The table below is a comparative summary of our net sales by product category for the three and nine months ended March 31, 2016 and 2015:

 
(In thousands)   Three Months Ended   % Increase
(Decrease)		   Nine Months Ended   % Increase
(Decrease)
March 31,
2016		   March 31,
2015		 GAAP   Constant
Rates (1)		 March 31,
2016		   March 31,
2015		 GAAP   Constant
Rates (1)
Product Category
Net Sales 		       

Elizabeth Arden
  Brand

$ 88,856 $ 88,711 0.2 % 4.7 % $ 299,343 $ 295,902 1.2 % 8.4 %

Celebrity,
  Heritage,
  Designer and
  Other Fragrances

  103,076     102,942 0.1 %   2.7 %   474,739     499,736 (5.0 )%   (2.2 )%
Total $ 191,932   $ 191,653 0.1 %   3.7 % $ 774,082   $ 795,638 (2.7 )%   1.7 %
 
 

The table below is a comparative summary of our adjusted net sales by product category for the three and nine months ended
March 31, 2016 and 2015:

 
(In thousands)     Three Months Ended   % Decrease   Nine Months Ended   % Decrease
March 31,
2016		   March 31,
2015		 GAAP   Constant
Rates (1)		 March 31,
2015		   March 31,
2014		 GAAP   Constant
Rates (1)
Product Category
Net Sales 		       

Elizabeth Arden
  Brand

$ 88,856 $ 88,424 0.5 % 5.1 % $ 299,343 $ 309,272 (3.2 )% 3.7 %

Celebrity,
  Heritage,
  Designer and
  Other Fragrances

  103,076

 

  102,940 0.1 %   2.7 %   474,739     501,338 (5.3 )%   (2.5 )%
Total $ 191,932   $ 191,364 0.3 %   3.8 % $ 774,082   $ 810,610 (4.5 )%   (0.1 )%
 

(1)  Constant currency information compares results between periods assuming exchange rates had remained constant period-over-period and excludes gains and losses from foreign currency contracts in all periods. We calculate constant currency information by translating current-period results using prior-year GAAP foreign currency exchange rates.

(2)  Amounts for the three and nine months ended March 31, 2015, reflect returns and markdowns under our 2014 Performance Improvement Plan.

 
 
ELIZABETH ARDEN, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET DATA

(Unaudited)

 
(In thousands)         March 31,
2016		       June 30,
2015		       March 31,
2015
Cash $       41,130 $       46,085 $       91,817
Accounts Receivable, Net 123,824 105,414 131,436
Inventories 227,477 240,740 268,183
Property and Equipment, Net 87,980 105,821 107,249
Exclusive Brand Licenses, Trademarks and Intangibles, Net 227,700 224,895 227,180
Goodwill 31,607 31,607 31,607
Total Assets 793,930 813,224 922,133
Short-Term Debt 67,500 8,300 64,000
Current Liabilities 250,932 215,977 213,950
Long-Term Liabilities 408,614 410,535 413,448
Long-Term Debt 354,997 355,634 355,833
Redeemable Noncontrolling Interest 2,395 4,222 4,139
Redeemable Preferred Stock 50,000 50,000 50,000
Total Shareholders' Equity 81,989 132,490 240,596
Working Capital 169,573 207,923 311,435
 
 
SUPPLEMENTARY CASH FLOW INFORMATION

(Unaudited)

(In thousands)

 
        Nine Months Ended
March 31,
2016		       March 31,
2015
Net cash (used in) provided by operating activities $       (42,021 ) $       40,590
Net cash used in investing activities (19,180 ) (25,329 )
Net cash provided by financing activities 57,272 25,041
Net (decrease) increase in cash and cash equivalents (4,955 ) 35,509
 
 

Cautionary Note Regarding Forward-Looking Information and Factors That May Affect Future Results

The Securities and Exchange Commission encourages companies to disclose forward-looking information so that investors can better understand a company's future prospects and make informed investment decisions. This press release and other written and oral statements that we make from time to time contain such forward-looking statements that set out anticipated results based on management's plans and assumptions regarding future events or performance. We have tried, wherever possible, to identify such statements by using words such as "anticipate," "estimate," "expect," "project," "intend," "plan," "believe," "will" and similar expressions in connection with any discussion of future operating or financial performance. In particular, these include statements relating to future actions, prospective products, future operating or financial performance or results of current and anticipated products or sales efforts, expenses and/or cost savings, interest rates, foreign exchange rates, the outcome of contingencies such as legal proceedings, and financial results. A list of factors that could cause our actual results of operations and financial condition to differ materially is set forth below, and these factors are discussed in greater detail under Item 1A -- "Risk Factors" of our Annual Report on Form 10-K for the fiscal year ended June 30, 2015:

*   our ability to implement our 2014 Performance Improvement Plan and our 2016 Business Transformation Program or other restructuring or cost saving initiatives, our ability to realize the anticipated benefits of our 2014 Performance Improvement Plan, our 2016 Business Transformation Program and any other restructuring or cost saving initiatives and/or changes in the timing of such benefits;
* whether we will incur higher than anticipated costs, expenses or charges related to the implementation of our 2016 Business Transformation Program or any additional restructuring or cost savings activities, and/or changes in the expected timing of such costs, expenses or charges;
* decisions or actions resulting from our continued reexamination of our business, including implementing any additional restructuring activities, and the timing and amount of any costs, expenses or charges that may be incurred as a result, or the benefits anticipated to result from such decisions or actions;
* our ability to realize benefits from the strategic investment made by affiliates of Rhône Capital L.L.C. in our company;
* factors affecting our relationships with our customers or our customers' businesses, including the absence of contracts with customers, our customers' financial condition, reduction in consumer traffic or demand, and changes in the retail, fragrance and cosmetic industries, such as the consolidation of retailers and the closing of retail doors as well as retailer inventory control practices, including, but not limited to, levels of inventory carried at point of sale and practices used to control inventory shrinkage;
* risks of international operations, including foreign currency fluctuations, hedging activities, restrictions on our ability to repatriate cash, economic and political consequences of terrorist attacks, disruptions in travel, unfavorable changes in U.S. or international laws or regulations, diseases and pandemics, and political instability in certain regions of the world;
* our reliance on license agreements with third parties for the rights to sell most of our prestige fragrance brands;
* our reliance on third-party manufacturers for our owned and licensed products and our absence of contracts with suppliers of distributed brands or raw materials and components for manufacturing of owned and licensed brands;
* delays in shipments, inventory shortages and higher supply chain costs due to the loss of or disruption in our distribution facilities or at key third-party manufacturing or fulfillment facilities that manufacture or provide logistic services for our products;
* our ability to respond in a timely manner to changing consumer preferences and purchasing patterns and other international and domestic conditions and events that impact retailer and/or consumer confidence and demand, such as domestic or international recessions or economic uncertainty;
* our ability to protect our intellectual property rights and to operate our business without infringing the intellectual property rights of others;
* the success, or changes in the timing or scope, of our new product launches, advertising and merchandising programs;
* our ability to successfully manage our inventories;
* the quality, safety and efficacy of our products;
* the impact of competitive products and pricing;
* our ability to (i) implement our growth strategy and acquire or license brands or secure distribution arrangements, (ii) successfully and cost-effectively integrate acquired businesses or new brands, (iii) successfully expand our geographic presence and distribution channels, and (iv) finance our growth strategy and our working capital requirements;
* our level of indebtedness, our ability to realize sufficient cash flows from operations to meet our debt service obligations and working capital requirements, and restrictive covenants in our revolving credit facility, second lien credit agreement, and the indenture for our 7 3/8% senior notes;
* our ability to realize sufficient cash flows from operations to meet our dividend and redemption obligations under the terms of our preferred stock, and our ability to comply with our other obligations under the terms of our preferred stock, including those set forth in the shareholders agreement relating thereto;
* changes in product mix to less profitable products;
* the retention and availability of key personnel;
* changes in the legal, regulatory and political environment that impact, or will impact, our business, including changes to customs or trade regulations, laws or regulations relating to ingredients or other chemicals or raw materials contained in products, advertising or packaging, or accounting standards or critical accounting estimates;
* the success of our global Elizabeth Arden brand repositioning efforts and global business strategy;
* the impact of tax audits, including the ultimate outcome of the pending Internal Revenue Service examination of our U.S. federal tax returns for the fiscal years ended June 30, 2010, 2011 and 2012, changes in tax laws or tax rates, and our ability to utilize our deferred tax assets and/or the establishment of valuation allowances related thereto;
* our ability to effectively implement, manage and maintain our global information systems and maintain the security of our confidential data and our employees' and customers' personal information;
* our reliance on third parties for certain outsourced business services, including information technology operations, logistics management and employee benefit plan administration;
* the potential for significant impairment charges relating to our trademarks, goodwill, investments in other entities or other intangible assets, including licenses, that could result from a number of factors, including such entities' or brands' business performance or downward pressure on our stock price; and
* other unanticipated risks and uncertainties.

We caution that the factors described herein and other factors could cause our actual results of operations and financial condition to differ materially from those expressed in any forward-looking statements we make and that investors should not place undue reliance on any such forward-looking statements. Further, any forward-looking statement speaks only as of the date on which such statement is made, and we undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date on which such statement is made or to reflect the occurrence of anticipated or unanticipated events or circumstances. New factors emerge from time to time, and it is not possible for us to predict all of such factors. Further, we cannot assess the impact of each such factor on our results of operations or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements.