91722_CVR:Layout 1 9/26/08 3:07 PM Page 1 91722_CVR:Layout 1 9/26/08 3:07 PM Page 2 CORPORATE AND INVESTOR INFORMATION D i re c t o r s E. Scott Beattie Corporate Offices Transfer Agent Chairman, President 2400 S.W. 145 Avenue and Registrar and Chief Executive Officer Miramar, Florida 33027 American Stock Transfer Elizabeth Arden, Inc. 954-364-6900 and Trust Company Fred Berens(1)Chairperson (2)Chairperson 200 Park Avenue South 59 Maiden Lane New York, New York 10038 “Iwantfirmer, Managing Director - Investments New York, New York 10003 smootherlooking ofssktrientcwhithmnaorkssigonr Wachovia Securities, Inc. 212-261-1000 800-937-5449 agespots.” Maura J. Clark(1, 3) 200 First Stamford Place Independent Registered President, Direct Energy Business Stamford, Connecticut 06902 Public Accounting Firm Direct Energy Services, LLC 203-462-5700 PricewaterhouseCoopers LLP Richard C.W.Mauran(3)Chairperson 28, chemin de Joinville 300 Madison Avenue 1216 Cointrin-Geneva New York, New York 10017 Private Investor NEW 41-22-791-8711 Common Stock William M. Tatham(1, 2) Information FindouthowPREVAGE®Bodycanhelp. Chairman and Chief Executive Officer Investor Relations Our common stock is traded Introducing NexJ Systems, Inc. For investor information, on the NASDAQ Global Select J.W. Nevil Thomas(2, 3) including filings with the Market under the symbol“RDEN.” President and Chief Executive Officer Securities and Exchange Nevcorp Commission and other financial Annual Meeting literature, please visit our website Our annual meeting of Paul West at www.elizabetharden.com shareholders will be held on Vice Chairman ©2008EAFragrancesCo.GANTisatrademarkofGANTAB.www.gantsilver.com thefragranceformen ((E12))lizACauobdmeitp tCehno sAmatrmiodintet eCneo, Imnmc.ittee or wEI2rnl0iivtz0eea sbPttoeoa trrhuk R s AA earvltade:tenionun,e Is nSco. uth Nlo2o4fcof0iacv0lee tsmSi ml.oWbeec,.a r a 1t1et4 2do5, ua2Art0 :v e0ex8ne uacetu t1iv0e:0 0 a.m. (3)Nominating and Corporate Governance Committee New York, NY 10003 Miramar, Florida 33027 Thefragranceformen. FreshGround.NEWPureFinish MinerFaoluPnodwadtieorn Discoverthenight. SPF20 ©2008EAFRAGRANCESCO. 5thavenueNIGHTS Eleganceistimeless. Award Winning 2008 Holiday Shopping Bag Thenewfragrance. Designed by Chen Lin He, a student in the (cid:73)(cid:74)(cid:55)(cid:79)(cid:69)(cid:68)(cid:62)(cid:59)(cid:72)(cid:67)(cid:63)(cid:68)(cid:58) new Master of Arts major at the Fashion Institute of Technology (FIT), this award winning design will be the featured shopping bag for the 2008 Lwehairtnemgloorveeastkincare.com holiday season at the Elizabeth Arden Global da Flagship Store, 691 5th Avenue in New York. ori Fl mi, a The competition was conceived by Elizabeth (cid:74)(cid:62)(cid:60)(cid:59)(cid:72)(cid:55)(cid:68)(cid:61)(cid:59)(cid:72)(cid:77)(cid:55)(cid:67)(cid:68)(cid:57)(cid:59)(cid:68)(cid:59)(cid:202)(cid:73) EMBRACETHTHEEGELOTWHINGENREWEFARAGLR.ANCE. ey, Mi Arden and FIT as an opportunity for design ell n students to execute real-world projects with n o D R an iconic company. This partnership is one of R by many endeavors that represent Elizabeth Arden’s Elizabeth Arden d uce commitment to community involvement GlobalFlagshSikpinSctaorree6P91re5vathgeA®venCuoelorwwFrwa.gerliaznacbeetharden.com d prod and enrichment. n a d Fragrance Portfolio ne g esi D ElizabethTaylor MariahCarey BritneySpears HilaryDuff DanielleSteel Usher AlbertaFerretti AlfredSung BadgleyMischka BobMackie GANT GeoffreyBeene Halston JuicyCouture LizClaiborne LuckyBrand NanetteLepore Rocawear Curve GiorgioBeverlyHills PSFineCologne 91722_TXT:Layout 1 10/1/08 4:17 PM Page 2 FINANCIAL HIGHLIGHTS Proformatwelve in thousands, except per share data Fiscal year ended Fiscal year ended monthsended(a) All information audited unless otherwise noted June 30, 2008 June 30, 2007 June 30, 2006 June 30, 2005 June 30, 2004 (Unaudited) Net sales $1,141,075 $1,127,476 $ 954,550 $ 920,538 $ 832,003 Gross profit 466,118 461,319 404,072 411,364 349,200 Net income, as reported 19,901 37,334 32,794 37,604 2,928 E Net income, as adjusted (unaudited) 38,119(b) 39,078(c) 34,231(d) 39,072(e) 27,922(f) l i Diluted earnings (loss) per share, z a as reported $ 0.68 $ 1.30 $ 1.10 $ 1.25 $ (1.66) b e Diluted earnings per share, t as adjusted (unaudited) 1.31(b) 1.36(c) 1.15(d) 1.30(e) 1.01(f) h A *Diluted earnings per share, r as adjusted(unaudited) 1.44(b) 1.50(c) 1.29(d) 1.30(e) 1.01(f) d e Shareholders’ equity $ 336,601 $ 320,927 $ 277,847 $ 259,200 $ 202,060 n EBITDA, as reported(g) $ 73,798 $ 98,524 $ 89,608 $ 100,038 $ 51,358 EBITDA, as adjusted(g) 103,798(b) 100,618(c) 91,539(d) 102,194(e) 93,702(f) *EBITDA, as adjusted(g) 108,014(b) 105,333(c) 97,291(d) 102,194(e) 93,702(f) 1 For additional detail and information, including a discussion of EBITDA, please refer to Part II, Item 6, Selected Financial Data in our Annual Report on Form 10-K, which is included in this Annual Report. (a)On June 2, 2004, the Company’s Board of Directors approved a fiscal year-end change from January 31 to June 30. The pro forma presentation reflects the unaudited consolidated selected financial data for the equivalent prior-year period based on the new fiscal year end, consistent with the presentation on our corporate website at A www.elizabetharden.com. n (b)Adjusted to exclude expenses related to the Liz Claiborne license agreement, including product discontinuation charges, of $27.0 million and restructuring charges n of $3.0 million. u (c)Adusted to exclude restructuring charges of $2.1 million. a (d)Adjusted to exclude debt extinguishment charges associated with long-term debt redemption and restructuring charges of $0.8 million and $1.2 million, respectively. l (e)Adjusted to exclude impairment charge related to the sale of the Miami Lakes facility of $2.2 million. R (f) Adjusted to exclude debt extinguishment charges associated with long-term debt redemption and restructuring charges of $38.8 million and $3.5 million, respectively, and the accelerated accretion on converted preferred stock. e (g)EBITDA (unaudited) is defined as net income plus the provision for income taxes, plus interest expense, plus depreciation and amortization. p * Adjusted to exclude share-based payment expenses resulting from the application of SFAS 123R, which was adopted on July 1, 2005 for the year ended June 30, o 2006 and subsequent periods, of $4.2 million, $4.7 million and $5.8 million for the years ended June 30, 2008, 2007 and 2006, respectively. This information is being r presented for comparison purposes. t 2 NET SALES FISCAL 2008 NET SALES(1) 0 in millions By Reportable Segment 0 in millions 8 $1,200 $54.8 $1,100 $1,000 $400.7 $688.8 $900 $800 $700 (cid:2)North America Fragrance (cid:2)International $600 6.30.04 6.30.05 6.30.06 6.30.07 6.30.08 (cid:2)Other Twelve months ended(a) (1)Excludes $3.2 million of unallocated sales allowances related to the Liz Claiborne license agreement. 91722_TXT:Layout 1 10/1/08 4:18 PM Page 3 D E A R 8 F E L L O W 0 0 S H A R E H O L D E R S : 2 t r o p e Elizabeth Arden – A Truly Global Beauty R Brand with a Strong Heritage l a u Nearly 100 years ago, Ms. Elizabeth Arden began n her skin care and cosmetics business and launched n the iconic Elizabeth Arden brand. By the 1930’s, A it was said that there were only three American W names known in every corner of the globe: Singer e accomplished a great Sewing Machines, Coca-Cola and Elizabeth Arden. deal in fiscal 2008, making By the time of her death in 1966, the Elizabeth significant progress towards Arden brand had achieved gross sales estimated many of our key corporate at $60 million per year. Since that time, billions of 2 initiatives. We accelerated dollars in advertising and marketing support have our extended supply chain been spent on the Elizabeth Arden brand, and today, and business processes re-engineering initiative, Elizabeth Arden-branded products are sold in over entered into an exclusive global licensing agreement for 90 countries with estimated annual global retail sales n the Liz Claiborne fragrance portfolio, increased sales e in excess of $1.0 billion. Recognition of the Elizabeth of Elizabeth Arden-branded products and expanded d r our penetration in fast-growing beauty markets. We were pleased to be able to advance our goals in A fiscal 2008 despite operating in a difficult economic h t environment in the U.S. and certain European markets. e b As we begin fiscal 2009, we believe that we are well a positioned for increased sales and profitability. Our z i recent license for the Liz Claiborne fragrances adds l several strong and complementary fragrance brands Taiwan Taoyuan International Airport E to our portfolio and provides the opportunity for Arden brand name remains strong. In Europe’s new brand launches associated with Claiborne largest countries, Elizabeth Arden ranked 6th among apparel brands. We are launching a number of new global beauty brands for brand-aided awareness, brands in fall 2008 and spring 2009 to further expand and in Asia, Elizabeth Arden ranked 5th overall and our fragrance business, including new fragrances ranked 4th among women 25 to 44 years old.(i) under our licenses for Juicy Couture, Rocawear, Usher, Growth of the Elizabeth Arden skin care, color cos- Mariah Carey andGiorgio Beverly Hills, amongothers, metics and fragrance business continues to outpace as well as a new Elizabeth Arden fragrance. Our fiscal worldwide sales growth for this combined category.(ii) 2009 product launch plans also include a number In fiscal 2008, global sales of Elizabeth Arden skin of new Elizabeth Arden-branded skin care and color care and color cosmetics products increased by 7%, products, including a new PREVAGEproductand a due in part to our strategic re-alignment and focus mineral-based foundation. Finally, we anticipate on three core pillars: PREVAGE, Ceramideand the savings in fiscal 2009 and 2010 from our global supply third pillar, a market-specific mix of Intervene, Eight chain and business processes re-engineering project. Hour Cream andElizabeth Arden White Glove,which (i) Based on a study conducted for Elizabeth Arden by GfK, a global market research firm, in 2007. (ii) Euromonitor - fragrance, color and skin care sales: 2004-2007. 91722_TXT:Layout 1 10/1/08 4:18 PM Page 4 allows us to maximize the strongest opportunities in each market. PREVAGE, the ground-breaking cos- meceuticalproduct incorporating idebenone, one of the most powerful antioxidants on the market today, is our premium anti-aging skin care line. Ceramideincludes both a skin care and color founda- tion business, and Intervene, our latest skin care and color cosmetics line, targets a younger Elizabeth Arden consumer. Each of the PREVAGE, Ceramide E andInterveneskin care franchises achieved double- l i digit sales growth in fiscal 2008. z a b e t We have focused on expanding distribution in h key, high growth markets, such as Asia and Europe, A with market specific innovation. For example, sales r of Eight Hour Cream, a cult beauty product in Europe d for over 50 years, increased by 22% in international e markets in fiscal 2008, and we developed and n launched the Elizabeth Arden White Gloveskin care line specifically for the Asian markets. In fiscal 2009, we will be introducing Eight Hour Cream Sun Defense for Face SPF 50and new Interveneand Elizabeth ArdenWhite Gloveproducts. 3 Launched just three years ago, PREVAGEis sold in 55 countries and has garnered over 30 beauty awards around the world, including in the United A Kingdom, Australia, Canada, South Africa, Travel n Retail, Switzerland and Spain. In fiscal 2008, we n expanded the PREVAGEfranchise throughout u Europe and introduced PREVAGE Anti-aging Night a l Cream. International sales of PREVAGEincreased R by 14% in fiscal 2008. In fiscal 2009, we will be launching the latest additions to the PREVAGE e p franchise - PREVAGE Body Total Transforming Anti- o aging Moisturizerand PREVAGE WHITE, developed r specifically for the Asian markets. We also will t continue to expand distribution of PREVAGE 2 by introducing PREVAGEmore broadly in Latin 0 America and further developing distribution 0 in China. 8 When introduced over 18 years ago, Ceramide We have aligned our color cosmetics business with anti-aging capsules were the first single-application these key skin care franchises to drive customersto skin care treatment. Since that initial product launch, the Elizabeth Arden brand. Focusing on these core over 500 million Ceramidecapsules have been sold pillars allows us to concentrate our innovation and globally, and the franchise has won over 30 awards. investments in advertising, offers more consistent We have expanded the Ceramidefranchise greatly, price positioning on a global basis and addresses growing sales by 30% over the past two years, the need for market diversity. During the last two driven largely by new product innovations. In fiscal fiscal years, we have eliminated non-performing 2008, we launched Ceramide Gold Ultra Restorative items, improving the overall productivity of our Capsules, and we will be introducing a new Ceramide sales associates and expanding gross margins. Goldeye product in fiscal 2009. 91722_TXT:Layout 1 10/1/08 4:18 PM Page 5 8 0 0 No discussion of the heritage of the Elizabeth Arden 2 brand would be complete without mentioning the t famous Red Door Spas. We currently license the r Red Door name to an unrelated third party who o p operates the Red Door Spas. The spa industry is In fiscal 2008, e estimated at approximately $47 billion.* We believe 61% of the sales R there exists tremendous opportunity to exploit the of Elizabeth Red Door Spas as a global channel of distribution l a Arden-branded for the Elizabeth Arden brand and, to that end, are u products were exploring a number of initiatives for the Red Door n in international Spas. One of the greatest symbols of the Elizabeth n markets. Arden brand is the landmark Red Door Spa and A Elizabeth Arden global flagship store, located at 691 5th Avenue in New York. In December 2007, we proudlyunveiled the newly-renovated Elizabeth Arden global flagshipstore that we now operate and which features the best of our products. 4 This ribbon cutting ceremony with Catherine n Zeta-Jones at e the re-opening d of our global r A The classic brands of the Elizabeth Arden fragrance flagship store portfolio, Red Door, Elizabeth Arden 5th Avenue created over h t and Elizabeth Arden green tea, comprise 67% of 65 million media e Elizabeth Arden-branded fragrance sales and con- impressions. b tinue to maintain a loyal following around the world. a z In South Africa and New Zealand, for example, Red Global Footprint i Doorremains the top selling prestige fragrance at l the largest retailers, and Elizabeth Arden green tea E As a truly global beauty company, we believe we are enjoys a strong following throughout Asia. The strong well positioned to take advantage of a very exciting brand equity of these fragrances allows us to launch time for the beauty industry. Our global footprint, new and exciting Elizabeth Arden fragrance brands, through our 19 international affiliates, covers 80% such as Elizabeth Arden Mediterranean, which we of the world’s beauty market. Our international launched in fiscal 2006, and our newest Elizabeth business segment, which represented 35% of our Arden fragrance, Pretty Elizabeth Arden, launching in net sales in fiscal 2008, continued to show strong spring 2009. sales growth, with net sales increasing by 9% in fiscal 2008. Greater China, Travel Retail, other Asia Pacific We’re very excited about Pretty Elizabeth Arden, which territories and our distributor markets, including will be the first fragrance launch in the Elizabeth Arden Latin America, Eastern Europe, the Middle East and portfolio in over two years. We believe it will have India, represented over 50% of our international busi- a positive impact on sales for the second half of fiscal nesssegment sales in fiscal 2008. In total, net sales 2009, particularly for our international business, and in these markets grew by nearly 15% in fiscal 2008, should help drive the overall performance of the and we are pursuing strategies to further develop Elizabeth Arden brand during fiscal 2009. these markets. *SRI International: Global Spa Economy 2007. 91722_TXT:Layout 1 10/1/08 5:32 PM Page 6 In Eastern Europe, for example, the sales responsibility Other initiatives to grow our European fragrance for Poland and Hungary is now being managed by portfolio include expanding our GANTfragrance our European team to more cohesively manage the franchise with the introduction of the new large European perfumery chains, and we are planning fragrance GANT Silverand re-launching one of to add resources to open other markets in Eastern our classic fragrances, Geoffrey Beene’s Grey Flannel Europe. In Latin America, where the retail landscape in the fall of 2008. These initiatives complement is less developed, we are exploring initiatives to our offerings of other designer fragrance brands, more fully develop our fragrance business in several including the Badgley Mischkafragrance brand, markets. While we currently operate in India with which we have licensed since June 2006, and the E the help of a distributor, sales growth is strong, and Giorgio Beverly Hills fragrance brands, which we l i we are considering additional resources to increase licensed from Procter & Gamble in December 2006. z our market penetration. In China, since opening our a affiliate in 2006, we have improved our ranking for b all beauty brands to 9th place in 2007 from 15th e t place in 2005 and have had over a four-fold increase h in sales over the last two fiscal years.(i) A r In Europe, we experienced strong sales momentum d through the first half of fiscal 2008, although this e slowed down in the latter part of the fiscal year n due to a weakening of the economy. Nevertheless, Europe continues to be one of the largest beauty markets in the world, and we believe we are well positioned to take a larger share of that market given our sales and marketing infrastructure. With the opening of an affiliate in France in fiscal 2008 ,we now 5 In fiscal 2008, 50% of the sales of Britney Spear’s have sales offices in eight countries across Europe. fragrances were in international markets. According to Guinness World Records, Britney Spears is the most searched person on the internet. A n n Strongly Positioned North American u a Fragrance Business l R The global fragrance market is estimated at approxi- e mately $18 billion, with North America and Europe, p the two largest markets, representing 65% of global o retail sales.(ii) We believe that given our unique r business model, there continues to be a tremendous t 2 opportunity for us in the global fragrance market. In North America, we have strongmarket share in 0 the fastest growing retailers of prestige fragrances 0 8 and have a number of initiatives in place to further expand the prestige fragrance category at those retailers, which collectively encompass over 30,000 doors. Over the last 18 months, we have strength- ened our category management and sales teams to focus on our largest mass retail customers and have been working with the management of those We also are particularly focused on acquisitions and retailers to more fully developthe fragrance category. new brand licensing opportunities to fuel the growth Specific initiatives include improved merchandising, of our European fragrance business. In fiscal 2008, category managementand sales analysis, better we signeda license with the Italian designerAlberta placement of holiday items and improved visuals, Ferretti fora fragrance targeted for the European signage and displays. market, which we plan to launch in fiscal 2010. (i) Beauté Research Paris, March 2008. (ii) Euromonitor: 2007. 91722_TXT:Layout 1 10/1/08 4:18 PM Page 7 Curvebrand, came the #1 fragrance in U.S. mass retail for men, which complements our extensive fragrance portfolio that already includes the #1 fragrance for women in U.S. mass retail, Elizabeth Tay- 8 0 0 2 t r o p e R l a u lor’s White Diamonds. We also added the Usher n men’s and women’s fragrances to our portfolio. n The Ushermen’s fragrance was launched in fall A 2007 at U.S. department stores, achieving the #1 spot among men’s fragrance launches for the fall season, and is currently ranked 5th overall in U.S. department stores for men’s fragrances.* 6 n e d r A h t e b a z i l E In addition to expanding our brand portfolio, the Liz Claiborne license is strategically important for us, allowing us to leverage our existing infrastructure The biggest development with our fragrance and double the size of our U.S. department store businessin fiscal 2008 was our exclusive global fragrance business, while keeping our overhead license of the Liz Claiborne fragrance portfolio, structure relatively flat. Prior to entering into the which includes the Juicy Couture, Usher, Lucky license agreement, we were the distributor of the Brand andLiz Claibornefragrance brands. Juicy Liz Claiborne fragrance brands to U.S. mass retailers. Coutureis a top 10 women’s fragrance in the As the licensee of these brands, we will now be U.S. When introduced in 2006, the Juicy Couture able to improve our gross margins by converting fragrance was the #1 launch in the history of those sales from a distributor margin to that of Bloomingdale’s and has ranked in the top 10 of a brand licensee. We also believe that there is women’s fragrance brands in U.S. department stores a meaningful opportunity for us to grow and since its launch.* With the addition of the iconic develop these brands in international markets. *Source: NPD. 91722_TXT:Layout 1 10/1/08 4:18 PM Page 8 The Juicy Coutureapparel brand, for example, has a presence in numerous countries where we also have affiliate offices, including across Europe, Asia and the Middle East, and we are working closely with the Juicy Coutureapparel team to grow the fragrance business as they expand their apparel business. We also are optimistic that the Usher and Curvebrands will perform strongly in inter- national markets, particularly in Europe. E l i z a b e t h A r d e In August 2008, we launched Mariah Carey’s n Luscious Pink, the follow-up scent to M by Mariah, which ranked #1 or #2 in celebrity fragrance launches in virtually all international markets in which it was launched in fiscal 2008. From the Liz Claiborne fragrance portfolio, we are excited by the September 2008 launch of a new Juicy 7 Couture fragrance for women called Viva La Juicy, and the fall 2008 launch of new Ushermen’s and women’s limited edition fragrances. We also will be introducing a number of new fragrance A brands to North American mass retailerson behalf n n of other beauty companies. u a l R As discussed above, we are very excited about our new fragrance launches planned for fiscal 2009. e In late 2007, we announced a beauty license with p o Rocawear, the clothing label co-founded by hip-hop r mogul Shawn “Jay-Z” Carter. In addition to producing t ten #1 albums on The Billboard 200 and earning 2 26 Grammy award nominations, Jay-Z was instru- 0 mental in creating the hip hop movement, and the 0 Rocawearbrand is at the center of this culture. 8 Launched in 1999, Rocawearhas expanded its appeal beyond the U.S. and has become a global fashion brand. Jay-Z’s vision resonates strongly with the young male consumer, which provides us with a unique opportunity to build a leading men’s fra- grance business. We believe we set the standard in fragrance innovation and led the industry with the innovative viral marketing campaign for the curious Elizabeth Taylor’s White Diamonds fragrance Britney Spearsfragrance. We believe the advertising became the most successful celebrity fragrance of campaign for the fall 2008 launch of 9IX Rocawear, all time with more than $1 billion in retail sales. which has been met with great excitement by (Since its launch in 1991.) retailers, will prove to be equally groundbreaking. – Fortune Magazine, November 2005 91722_TXT:Layout 1 10/1/08 4:18 PM Page 9 Corporate Initiatives to Improve Return Looking Ahead on Invested Capital While we expect the retail environment to remain We have made significant progress this year towards difficult in fiscal 2009, we are confident that our the re-engineering of our extended supply chain, strategies will result in increased sales and earnings. 8 logistics and transaction processing systems, which For this fiscal year, our priorities are focused on: 0 werefer to as our Global Efficiency Re-engineering 0 project. This initiative involves several functions, (cid:2) Driving the Elizabeth Arden brand globally by 2 including account management, category manage- leveraging the brand’s significant awareness t ment, supply chain, sales and operations planning, and our global infrastructure and by further r logistics and the migration to a shared services developing the brand’s penetration in high o model for our key transaction processes. growth emerging markets; p e (cid:2) Expanding our fragrance business, particularly in the larger fragrance markets of Europe; R (cid:2) Improving efficiencies in our extended supply l a chain and logistics platform and transaction u processing systems, thereby increasing operating n margins and cash flow performance; and n (cid:2) Successfully integrating the Liz Claiborne business A and growing that brand portfolio globally. We are excited about our near and long-term growth prospects and expect fiscal 2009 to be a Selfridges-Oxford Street (London, England) year of significant accomplishments for our company. 8 After implementing various successful pilot pro- Thanks to our Stakeholders grams in these functional areas, we accelerated this and Employees initiative earlier this year with the hiring of a senior executive to lead our global supply chain and n I would like to extend my sincere appreciation to attracted additional personnel with extensive supply e all of our employees and beauty advisors around d chain experience to our organization. Our Global the world who work so hard every day to make r Efficiency Re-engineering project remains on track, Elizabeth Arden a success. Your dedication and A and we currently anticipate savings of approximately passion inspire all of us and are instrumental to h $10 million to $12 million by the end of fiscal 2009 our company’s success and future prospects. t and additional savings of approximately $13 million I also would like to thank our business partners e to $15 million by the end of fiscal 2010. b and shareholders for their continued support of a our company. z A significant component of our Global Efficiency i Re-engineering project is the implementation of an l E Oracle financial accounting and order processing sys- tem. During fiscal 2007, we successfully imple- mented the same Oracle solution in our Greater China business. This provides us confidence that we will be able to complete the global implementation E. Scott Beattie on schedule within the next 18 to 24 months. Chairman, President and Chief Executive Officer With this new transaction processing system, we expect to reduce, on a global basis, our general and administrative overhead expenses, which should help drive profitability and cash flows in fiscal 2010 and fiscal 2011.