The beauty care industry includes color cosmetics, skin care products, fragrances and hair care products. According to Euromonitor, a market research firm, the beauty care industry worldwide and within the U.S. represented over $230.9 billion and $46.6 billion, respectively, in retail sales in 2004. The five largest markets in the beauty care industry by retail sales according to Euromonitor are the United States, Japan, France, Germany and the UK with 2004 retail sales of $45.6 billion, $30.7 billion, $14.0 billion, $12.4 billion and $11.6 billion, respectively.

The U.S. color cosmetics market, which includes facial makeup, eye makeup and lip products, is estimated by Euromonitor to have had retail sales of $8.1 billion in 2005. The market for facial makeup is the largest segment of the U.S. cosmetics market, with estimated retail sales of $2.8 billion in 2005, according to Euromonitor. In addition, the markets for eye, lip, and nail products are estimated to have had retail sales of $2.5 billion, $2.2 billion, and $0.6 billion, respectively, in 2005. U.S. retail sales of skin care products which include facial care, body care, and hand care were an estimated $7.6 billion in 2005, according to Euromonitor. The facial care market, the largest segment of the skin care market, was estimated at $5.7 billion in 2005 with approximately 88% of sales in this segment derived from facial moisturizers, anti-aging products, and cleansers.

The international color cosmetics market is estimated by Euromonitor to have had retail sales of $32.7 billion in 2004. The market for facial makeup is the largest segment of the international cosmetics market, with estimated sales of $11.6 billion in 2004, according to Euromonitor. In addition, Euromonitor estimates that the markets for eye, lip, and nail products had retail sales of $8.3 billion, $9.4 billion, and $3.4 billion, respectively, in 2004. International retail sales of skin care products were an estimated $50.2 billion in 2004, according to Euromonitor. Euromonitor estimates that the international facial care market, the largest segment of the skin care market, had retail sales of $39.9 billion in 2004.

The Company’s i.d.-branded cosmetics include a broad assortment of fashionable color cosmetics and accessories including finishing powders, lipsticks, lip glosses, lip liners, mascaras, and application tools and brushes.

RareMinerals represents an innovative extension of the Company’s mineral-based expertise into the skin care category. The Company’s patent-pending RareMinerals Skin Revival Treatment delivers concentrated organic macro and micro minerals to the skin through a time-released, active formulation to reduce the appearance of imperfections and increase skin firmness and hydration.

The Company’s body care products include various formulas for the bath, body, and face and are marketed under the Company’s name sub-brands such as Daily Essentials and Premium Body. These products are positioned as upscale \\\\\\\"boutique\\\\\\\" brands that are fun and full of personality.

The Company’s md formulations brand provides a complete professional skin care solution addressing the rapidly growing anti-aging market. This results-oriented skin care line was originally created to meet the needs of the demanding professional spa and salon channels. md formulations was one of the first commercial glycolic skin care brands developed in the U.S. and continues to be a leading brand in the use of glycolic acid as an active anti-aging compound.

Products in the retail line include cleansers to cleanse and exfoliate; corrective treatments to reduce the appearance of wrinkles, discolorations, blemishes and improve overall skin texture and tone; antioxidant moisturizers to hydrate and help defend skin against future damage; and sun protectors to help prevent sunburn and premature skin aging. The brand also offers a complete line of professional-use-only products for use by aestheticians, such as glycolic peels, to complement the consumer retail line.

Gross profit increased 75.4% to $64.7 million in the three months ended April 2, 2006 from $36.9 million in the three months ended April 3, 2005.

Selling, general and administrative expenses increased 43.2% to $29.7 million in the three months ended April 2, 2006 from $20.7 million in the three months ended April 3, 2005.

Depreciation and amortization expenses increased 175.1% to $0.5 million in the three months ended April 2, 2006 from $0.2 million in the three months ended April 3, 2005.

Interest expense increased 140.0% to $9.0 million in the three months ended April 2, 2006 from $3.7 million in the three months ended April 3, 2005.

Interest income increased to $0.3 million in the three months ended April 2, 2006 from zero in the three months ended April 3, 2005.