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Business And Basis Of Presentation
6 Months Ended
Dec. 31, 2015
Business And Basis Of Presentation [Abstract]  
Business And Basis Of Presentation

NOTE 1. BUSINESS AND BASIS OF PRESENTATION

     Elizabeth Arden, Inc. (the "Company" or "our") is a global prestige beauty products company that sells fragrances, skin care and cosmetic products to retailers in the United States and approximately 120 countries internationally.

     Basis of Consolidation. The unaudited consolidated financial statements include the accounts of the Company's wholly-owned domestic and international subsidiaries as well as variable interest entities ("VIEs") of which the Company is the primary beneficiary in accordance with consolidation accounting guidance. See Note 5 for information on the consolidated VIEs. All significant intercompany accounts and transactions have been eliminated in consolidation. The accompanying unaudited consolidated financial statements have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission (the "Commission") for interim financial information. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States for complete financial statement presentation and should be read in conjunction with the audited consolidated financial statements and related footnotes included in the Company's Annual Report on Form 10-K for the fiscal year ended June 30, 2015 (the "2015 Annual Report"), filed with the Commission.

     The consolidated balance sheet of the Company as of June 30, 2015, is derived from the financial statements included in the 2015 Annual Report but does not include all disclosures required by accounting principles generally accepted in the United States. The other consolidated financial statements presented in this quarterly report are unaudited but include all adjustments that are of a normal recurring nature that management considers necessary for the fair statement of the results for the interim periods. Results for interim periods are not necessarily indicative of results for the full fiscal year.

     Liquidity. During fiscal 2014, the Company began a comprehensive review of its entire business model and cost structure to identify initiatives to reduce the size and complexity of its overhead structure and to exit low-return businesses, customers and brands, in order to improve gross margins and profitability in the long term. There are risks and uncertainties associated with the execution of the Company's business plan, including the general economic and retail environment. The Company's ability to fund operations and capital expenditures in the future is dependent upon the ability to generate cash from operations, maintain or improve margins and to borrow funds available under its credit facilities. As further described in Note 9 (Short Term Debt), the Company maintains a revolving bank credit facility (the "Credit Facility") and a second lien credit agreement (the "Second Lien Credit Agreement") with its lenders.

     The Credit Facility has only one financial covenant, a debt service coverage ratio that applies only if the Company does not have the requisite average borrowing base capacity and borrowing availability. The debt service coverage ratio did not apply during the three months ended December 31, 2015. The Company's debt service coverage ratio was less than 1.1 to 1 as of December 31, 2015.

     Based upon its business strategies and initiatives for fiscal 2016, the Company does not anticipate that its borrowing base capacity and/or borrowing availability will fall below the applicable thresholds in its Credit Facility. If the Company requires additional liquidity to fund operations, the Company believes it has the ability to postpone or reduce certain expenditures, such as capital expenditures, in a manner that the Company believes is sufficient to create the liquidity necessary to fund operations.

     Deterioration in the economic and retail environment or continued challenges in the Company's operating performance, however, could cause the Company to default under its Credit Facility if it does not have the requisite average borrowing base capacity or borrowing availability and also fails to meet the financial maintenance covenant set forth in the Credit Facility. In such an event, the Company would not be allowed to borrow under these facilities and may not have access to the capital necessary to meet its operating and investing needs. In addition, a default under its Credit Facility or Second Lien Credit Agreement that causes acceleration of the debt under either facility could trigger a default under the Company's outstanding 7 3/8% Senior Notes due March 2021 (the "7 3/8% Senior Notes"). In the event the Company is not able to borrow under either borrowing facility, it would be required to develop an alternative source of liquidity. There is no assurance that the Company could obtain replacement financing or what the terms of such financing, if available, would be.