Segment Data And Related Information

6 Months Ended

Dec. 31, 2015

Segment Data And Related Information [Abstract]

Segment Data And Related Information

NOTE 16. 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 December 31, 2015, the Company's operations were organized into the following two operating segments, which also comprise its reportable segments:

Ÿ 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 in North America. 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.

Ÿ 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 2015 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 for the three and six months ended December 31, 2014, excludes returns and markdowns related to the Company's previously disclosed 2014 Performance Improvement Plan. In addition, segment profit (loss) 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 profit (loss) to consolidated loss 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 and the 2016 Business Transformation Program. 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 profit (loss) by operating segment for the three and six months ended December 31, 2015 and 2014:

(Amounts in thousands)		Three Months Ended							Six Months Ended
		December 31,			December 31,				December 31,		December 31,
		2015			2014				2015		2014
Segment Net Sales:
North America	$	202,993		$	227,275			$	375,189		$	399,634
International		113,206			118,914				206,961			219,612
Total	$	316,199		$	346,189			$	582,150		$	619,246
Reconciliation:
Segment Net Sales	$	316,199		$	346,189			$	582,150		$	619,246
Less:
Unallocated sales returns and markdowns	-	-				12,582	(2)	-	-			15,261	(5)
Net Sales	$	316,199		$	333,607			$	582,150		$	603,985
Segment Profit:
North America	$	22,414			$	30,565		$	46,557		$	43,386
International		(2,442	)			1,917			(15,761	)		(9,546	)
Total	$	19,972			$	32,482		$	30,796		$	33,840
Reconciliation:
Segment Profit	$	19,972			$	32,482		$	30,796		$	33,840
Less:
Depreciation and Amortization		10,684				12,755			21,754			25,467
Interest Expense, net		7,759				7,712			15,020			15,468
Consolidation and Elimination Adjustments		(273	)			1,436			736			1,515
Unallocated Corporate Expenses		6,562	(1)			66,645	(3)		14,989	(4)		72,737	(6)
Loss Before Income Taxes	$	(4,758	)	$	(56,066		)	$	(21,703	)	$	(81,347	)

(1)      Amounts for the three months ended December 31, 2015, include $6.6 million in costs and expenses with respect to the Company's 2016 Business Transformation Program primarily comprised of $0.6 million of inventory costs related to the closing of the Company's Brazilian affiliate, as well as changes in certain distribution and customer arrangements, and $6.0 million of severance and other employee-related expenses and related transition costs.

(2)	Amounts for the three months ended December 31, 2014, represent $12.6 million of returns and markdowns under the Company's 2014 Performance Improvement Plan primarily due to changes to the Company's distribution strategy in China, and other customer and distribution arrangements.
(3)	In addition to the returns and markdowns described above in Note 2, amounts for the three months ended December 31, 2014, include:
	*	$10.0 million in costs and expenses under the 2014 Performance Improvement Plan comprised of $4.6 million of inventory write- downs due to discontinuation of certain products, $4.5 million comprised primarily of customer and vendor contract termination costs, and $0.9 million of severance, other employee-related expenses and related transition costs associated with the reduction in global headcount positions;
	*	$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.
(4)	Amounts for the six months ended December 31, 2015, include $15.0 million in costs and expenses with respect to the Company's 2016 Business Transformation Program primarily comprised of $3.9 million of inventory costs related to the closing of the Company's Brazilian affiliate, as well as changes in certain distribution and customer arrangements, and $11.1 million of severance and other employee-related expenses and related transition costs.
(5)	Amounts for the six months ended December 31, 2014, represent $15.3 million of returns and markdowns under the Company's 2014 Performance Improvement Plan primarily due to changes to the Company's distribution strategy in China and other customer and distribution arrangements.
(6)	In addition to the returns and markdowns described above in Note 5, amounts for the six months ended December 31, 2014, include:
	*	$13.4 million in costs and expenses under the 2014 Performance Improvement Plan comprised of $4.6 million of inventory write- downs due to discontinuation of certain products, $4.5 million comprised primarily of customer and vendor contract termination costs, $4.2 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.