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Estée Lauder Companies Annual Report, Year Ended Jun 30, 1999

Filing Date
Filed September 13, 1999
Period End
June 30, 1999
Security
EL
In the record · 2016–202610-K1110-Q338-K126

EL filed 11 annual reports (10-K), 33 quarterly reports (10-Q) and 126 current reports (8-K) between 2016 and 2026.

  1. Leadership change8-K · Jul ’18Jul ’18
  2. Restructuring8-K · Aug ’20Aug ’20
  3. Leadership change8-K · Jul ’22Jul ’22
  4. Restructuring8-K · Dec ’25Dec ’25

01—Abstract

Summary

Summary of the 10-K filed September 13, 1999. Cited figures are marked; the original filing is the authoritative source.

The Estee Lauder Companies Inc. reported fiscal 1999 (year ended June 30, 1999) net sales of $3,961.5 milliona, up from $3,618.0 million in fiscal 1998, with net sales increasing in all product categories and geographic segments.

Operating income rose to $456.9 millionb from $409.1 million, and operating margin improved to 11.5% from 11.3%. Net earnings were $272.9 million, or $1.03 per diluted share, compared with $236.8 million, or $0.89 per diluted share, in fiscal 1998. Figures are restated for the two-for-one stock split paid June 2, 1999.

The company, controlled by the Lauder family with approximately 93.3% of voting power, sells skin care, makeup, fragrance and hair care products under brands including Estee Lauder, Clinique, Aramis, Origins, M.A.C, Aveda and jane, and is the global licensee for Tommy Hilfiger and Donna Karan fragrances and cosmetics. Balance sheet and cash flow data show cash and cash equivalents of $347.5 millionc at June 30, 1999, total assets of $2,746.7 million, and total debt of $429.1 million in the selected financial data. Net cash provided by operating activities was $352.3 million, and capital expenditures were $117.9 million.

Total debt was 25%d of total capitalization at June 30, 1999, compared with 29% a year earlier. The Board raised the quarterly dividend to $.05 per share from $.0425, and a share repurchase program of up to eight million Class A shares was authorized in September 1998.

The filing states that the Company is involved only in routine legal proceedings that are not expected to have a material adverse effect, and that Year 2000 costs were not expected to be material. Federated Department Stores affiliates accounted for 11% of fiscal 1999 net sales, and May Department Stores for 11%.

02—Key points

Key Highlights

  1. Net sales rose to $3,961.5 million in fiscal 1999 from $3,618.0 million in fiscal 1998, with growth in all product categories and all geographic segments.
  2. Operating income increased to $456.9 million from $409.1 million, and operating margin rose to 11.5% from 11.3%.
  3. Net earnings were $272.9 million, or $1.03 per diluted share, versus $236.8 million, or $0.89 per diluted share, in fiscal 1998.
  4. Cash flow from operations was $352.3 million, compared with $258.2 million in fiscal 1998; capital expenditures were $117.9 million.
  5. Total debt was 25% of total capitalization at June 30, 1999, down from 29% at June 30, 1998, and the company issued $205.2 million of commercial paper to prepay part of its term loan.
  6. The quarterly cash dividend was raised to $.05 per share from $.0425, and an eight-million-share Class A repurchase program was authorized in September 1998.
  7. The Lauder family holds approximately 93.3% of the outstanding voting power, and two department store groups each accounted for 11% of net sales.

03—Questions

Frequently Asked Questions

  1. How did The Estee Lauder Companies perform financially in fiscal 1999?

    Net sales grew 9% to $3,961.5 million, operating income rose 12% to $456.9 million, and net earnings reached $272.9 million, or $1.03 per diluted share. EBITDA increased to $574.2 million, or 14.5% of net sales.

  2. Which product categories and regions drove growth?

    Skin care sales rose 12% to $1,398.8 million, makeup rose 7% to $1,412.8 million, and fragrance rose 6% to $1,048.6 million. In regions, the Americas grew 9% to $2,397.9 million and Europe, the Middle East & Africa grew 13% to $1,082.4 million, while Asia/Pacific grew 6% to $481.2 million.

  3. How is the company's debt and liquidity position?

    Cash and cash equivalents were $347.5 million at June 30, 1999, and total debt was $429.1 million. Committed credit facilities totaled $750.0 million, all unused, and total debt was 25% of total capitalization, versus 29% a year earlier.

  4. What are the company's dividend and share repurchase policies?

    Dividends declared per common share were $.1775 in fiscal 1999, versus $.17 in fiscal 1998. The Board raised the quarterly dividend to $.05 per share from $.0425, and it authorized repurchase of up to eight million Class A shares in September 1998, with 504.8 thousand shares repurchased in fiscal 1999.

  5. Are there significant legal, Year 2000 or control risks?

    The company reports only routine legal proceedings that management does not expect to have a material adverse effect. Year 2000 incremental out-of-pocket costs were not significant through June 30, 1999, and the Lauder family controls about 93.3% of voting power, which the filing describes as a concentration of control.

04—Continue

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