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Elizabeth Arden, Inc. Announces First Quarter Fiscal 2013 Results

The table below reconciles net income, as determined in accordance with GAAP, to EBITDA and to EBITDA as adjusted: (For a reconciliation of net income 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.)

   
(Amounts in thousands) Three Months Ended
September 30, 2012     September 30, 2011
 
Net income $ 2,184 $ 9,232
Plus:
Provision for income taxes 481 2,777
Interest expense, net 6,198 5,262
Depreciation related to cost of goods sold 1,531 1,343
Depreciation and amortization   9,129   6,718
EBITDA 19,523 25,332
Acquisition-related and Elizabeth Arden brand repositioning costs (c)   15,064   -
EBITDA, as adjusted $ 34,587 $ 25,332
The table below reconciles net cash flow used in operating activities, as determined in accordance with GAAP, to EBITDA:
(Amounts in thousands)     Three Months Ended
September 30, 2012     September 30, 2011
 
Net cash used in operating activities $ (141,261 ) $ (115,584 )
Changes in assets and liabilities, net of acquisitions 153,011 135,523
Interest expense, net 6,198 5,262
Amortization of senior note offering and credit facility costs (340 ) (310 )
Provision for income taxes 481 2,777
Deferred income taxes 2,811 (1,116 )
Amortization of share-based awards   (1,377 )   (1,220 )
EBITDA $ 19,523 $ 25,332
 

(b) The table below reconciles the calculation of (i) net income and (ii) net income per share on a basic and diluted basis from the amounts reported in accordance with GAAP to such amounts before giving effect to acquisition-related costs and non-recurring product changeover costs related to the Elizabeth Arden brand repositioning. 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 acquisition-related costs and non-recurring product changeover costs related to the Elizabeth Arden brand repositioning. The presentation in the table below of the non-GAAP information titled "Net income as adjusted" and "Net income per basic and diluted share as adjusted" is not meant to be considered in isolation or as a substitute for net income or net income per basic and diluted share prepared in accordance with GAAP.

     
(In thousands, except per share data) Three Months Ended
September 30,  

 

September 30,

2012 2011

Gross Profit:

Gross Profit as reported $ 147,399 $ 142,436
Acquisition-related and Elizabeth Arden brand repositioning costs (c)   14,720   -
Gross Profit as adjusted $ 162,119 $ 142,436
 

Net Income:

Net income as reported $ 2,184 $ 9,232

Acquisition-related and Elizabeth Arden brand repositioning costs, net of tax (c) (d)

  11,257   --
Net income as adjusted $ 13,441 $ 9,232
 

Net Income Per Basic Share:

Net income per basic share, as reported $ 0.07 $ 0.32

Acquisition-related and Elizabeth Arden brand repositioning costs, net of tax (c) (d)

  0.39   --
Net income per basic share, as adjusted $ 0.46 $ 0.32
 

Net Income Per Diluted Share:

Net income per diluted share, as reported $ 0.07 $ 0.31

Acquisition-related and Elizabeth Arden brand repositioning costs, net of tax (c) (d)

  0.37   --
Net income per diluted share, as adjusted $ 0.44 $ 0.31
 

(c) For the three months ended September 30, 2012, gross profit and net income include $11.3 million (pre-tax) of inventory–related costs primarily for inventory purchased by us from New Wave Fragrances LLC and Give Back Brands LLC prior to the acquisitions of fragrance licenses and certain other assets from those companies, of which $6.4 million were non-cash, and $3.4 million (pre-tax) of non-recurring product changeover costs related to the Elizabeth Arden brand repositioning. In addition, net income includes $0.3 million (pre-tax) in transition costs associated with the New Wave Fragrances LLC and Give Back Brands LLC acquisitions and $0.1 million (pre-tax) of non-recurring product changeover costs related to the Elizabeth Arden brand repositioning.

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