Segment Data And Related Information

9 Months Ended

Mar. 31, 2015

Segment Data And Related Information [Abstract]

Segment Data And Related Information

NOTE 17. SEGMENT DATA AND RELATED INFORMATION

     Reportable operating segments, as defined by Codification Topic 280, Segment Reporting, include components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker (the "Chief Executive") in deciding how to allocate resources and in assessing performance. As a result of the similarities in the procurement, marketing and distribution processes for all of the Company's products, much of the information provided in the consolidated financial statements is similar to, or the same as, that reviewed on a regular basis by the Chief Executive.

     At March 31, 2015, the Company's operations were organized into the following two operating segments, which also comprise its reportable segments:

• North America - The North America segment sells the Company's portfolio of owned, licensed and distributed brands, including the Elizabeth Arden products, to prestige retailers, mass retailers and distributors in the United States, Canada and Puerto Rico, and also includes the Company's direct to consumer business, which is composed of the Elizabeth Arden branded retail outlet stores and the Company's e-commerce business. This segment also sells Elizabeth Arden products through the Red Door Spa beauty salons and spas, which are owned and operated by a third party licensee in which the Company has a minority investment.
• International - The International segment sells a portfolio of owned and licensed brands, including Elizabeth Arden products, to perfumeries, boutiques, department stores, travel retail outlets and distributors in approximately 120 countries outside of North America.

     The Chief Executive evaluates segment profit based upon income from operations, which represents earnings before income taxes, interest expense and depreciation and amortization charges. The accounting policies for each of the reportable segments are the same as those described in the Company's 2014 Annual Report under Note 1 -- "General Information and Summary of Significant Accounting Policies."

     The assets and liabilities of the Company are managed centrally and are reported internally in the same manner as the consolidated financial statements; thus, no additional information regarding assets and liabilities of the Company's reportable segments is produced for the Chief Executive or included herein.

     Segment net sales and (loss) profit exclude returns and markdowns related to the 2014 Performance Improvement Plan. In addition, segment (loss) profit excludes depreciation and amortization, interest expense, debt extinguishment charges, and consolidation and elimination adjustments and unallocated corporate costs and expenses, which are shown in the table reconciling segment (loss) profit to consolidated (loss) income before income taxes. Included in unallocated corporate costs and expenses are (i) restructuring charges that are related to an announced plan, (ii) restructuring costs for corporate operations, and (iii) costs and expenses related to the 2014 Performance Improvement Plan, including sales returns and markdowns. These expenses are recorded in unallocated corporate expenses as these items are centrally directed and controlled and are not included in internal measures of segment operating performance. The Company does not have any intersegment sales.

     The following table is a comparative summary of the Company's net sales and segment (loss) profit by operating segment for the three and nine months ended March 31, 2015 and 2014:

(Amounts in thousands)		Three Months Ended						Nine Months Ended
		March 31,			March 31,			March 31,			March 31,
		2015			2014			2015			2014
Segment Net Sales:
North America	$	107,511		$	121,877		$	507,145		$	616,183
International		83,853			88,964			303,465			356,404
Total	$	191,364		$	210,841		$	810,610		$	972,587
Reconciliation:
Segment Net Sales	$	191,364		$	210,841		$	810,610		$	972,587
Less:
Unallocated sales returns and markdowns		(289)	(1)	-	-			14,972	(1)		-
Net Sales	$	191,653		$	210,841		$	795,638		$	972,587
Segment (Loss) Profit:
North America	$	1,500		$	3,394		$	44,886		$	66,241
International		(17,245	)		(17,437	)		(26,791	)		(10,557	)
Total	$	(15,745	)	$	(14,043	)	$	18,095		$	55,684
Reconciliation:
Segment (Loss) Profit	$	(15,745	)	$	(14,043	)	$	18,095		$	55,684
Less:
Depreciation and Amortization		11,504			13,253			36,971			38,906
Interest Expense, net		7,055			6,605			22,523			18,371
Consolidation and Elimination Adjustments		(14	)		125			1,501			(1,238	)
Unallocated Corporate Expenses		137	(2)		1,534	(3)		72,874	(4)		(11,837	)(5)
(Loss) Income Before Income Taxes	$	(34,427	)	$	(35,560	)	$	(115,774	)	$	11,482

(1) Amounts for the three months ended March 31, 2015, represent $(0.3) million of adjustments for returns and markdowns previously recorded under the Company's 2014 Performance Improvement Plan primarily due to changes to its customer and distribution arrangements. Amounts for the nine months ended March 31, 2015, represent $15.0 million of returns and markdowns under the Company's 2014 Performance Improvement Plan primarily due to changes to its distribution strategy in China, and other customer and distribution arrangements.

(2) In addition to the adjustments for returns and markdowns described above in Note 1, amounts for the three months ended March 31, 2015, include:

* $0.5 million in costs and expenses under the 2014 Performance Improvement Plan comprised of $0.3 million of inventory write-downs due to discontinuation of certain products, and $0.2 million of severance, other employee-related expenses and related transition costs associated with the reduction in global headcount positions.

(3) Amounts for the three months ended March 31, 2014, include:

* $1.5 million of severance and other employee-related expenses and related transition costs incurred with respect to the elimination of certain sales positions and other staff positions announced in the fall of 2013.

(4) In addition to the returns and markdowns described above in Note 1, amounts for the nine months ended March 31, 2015, include:

* $13.9 million in costs and expenses under the 2014 Performance Improvement Plan comprised of $4.9 million of inventory write-downs due to discontinuation of certain products, $4.5 million primarily comprised of customer and vendor contract termination costs, $4.4 million of severance, other employee-related expenses and related transition costs associated with the reduction in global headcount positions, and $0.1 million in asset impairment charges;

* $43.8 million in asset impairment charges primarily related to the write off of the Justin Bieber and Nicki Minaj licenses, and other costs; and

* $0.2 million of debt extinguishment costs resulting from the December 2014 amendment to the Credit Facility.

(5) Amounts for the nine months ended March 31, 2014, include:

* a credit of $17.2 million for the complete reversal of the remaining balance of the contingent liability for potential payments to Give Back Brands, LLC based on the Company's determination during the second quarter of fiscal 2014 that it was not probable that the performance targets related to the Justin Bieber and Nicki Minaj licenses for fiscal years 2014 and 2015 would be met; and

* $5.3 million of severance and other employee-related expenses and related transition costs incurred with respect to the elimination of certain sales positions and other staff positions announced in the fall of 2013.