Arden Plunges On Weak Sales, Rhone Preferred Share Placement
Elizabeth Arden (NASDAQ: RDEN) plunged more than 23 percent in pre-market action after the company posted weaker-than-expected fourth quarter results and unveiled a private placement with Rhone Capital.
"The decline in sales of celebrity fragrances, particularly the Justin Bieber and Taylor Swift fragrances, was steeper than anticipated," Chief Executive E. Scott Beattie said.
Adjusted sales fell 28 percent to $201.2 million while analysts expected $242 million. The adjusted loss of $1.04 per share also missed the consensus that had predicted a loss of $0.33 per share.
Arden disclosed a $50 million private placement of preferred shares with Rhone Capital. The shares pay a five percent annual dividend. Rhone also acquired warrants to acquire 2.5 million shares, or 7.6 percent stake in Arden, at an exercise price of $20.39 per share.
Rhone said it will acquire additional shares and signed a standstill agreement whereby it won't acquire more than a 30 percent stake.
Rhone will appoint one member of Arden's board and will have the right to name an additional member if its stake rises to 20 percent or more.
Arden said the first half of fiscal 2015 will see a "slight improvement" compared with recent results. For the recent fourth quarter Arden posted a net loss of $155.9 million, or $5.24 a share, versus a year-earlier $5.01 million loss, or $0.17 cents a share.
Net sales fell 28 percent to $191.7 million from $267.6 million a year earlier.
Arden traded recently at $14.91, down 23.5 percent.
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