NEW YORK — Elizabeth Arden Inc. adjusted its asset-backed credit facility maturing in 2006 on the strength of its "improved operating and financial performance."
Stephen Smith, executive vice president and chief financial officer, noted in a statement: "The amendment not only allows for lower borrowing costs, but also provides significant additional liquidity and growth capital over the next several years, and removes potentially restrictive covenants for the term of the facility."
The amended facility includes a 50- to 75-basis-point reduction in the interest rate charged on the firm’s loans; a broader borrowing base formula with more-favorable advance rates, and removal of the inventory cap, as well as an expansion in its total size to $200 million from $175 million.
Additionally, the action eliminated all of the financial maintenance covenants, except for a fixed-charge coverage ratio of 1.1 to 1 that will apply if availability under the facility falls under $50 million. More than $135 million is currently available under the facility.
JPMorgan Chase Bank and Fleet Securities Inc. acted as co-arrangers on the amendment.
As reported, better business controls and improved sales, particularly in its new fragrances, have helped Arden boost its financial results. For the nine months ended Oct. 26, the company reported income of $17.7 million, or 77 cents a diluted share. This reversed a year-ago loss of $10.7 million, or 77 cents. Sales advanced 11.1 percent to $582.3 million from $523.9 million.
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