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| Revlon Reports Fourth Quarter and Full Year 2001 Performance; Results from Ongoing Operations Continue to Improve |
NEW YORK, Feb. 25 /PRNewswire-FirstCall/ -- Revlon, Inc. (NYSE: REV) today announced fourth quarter and full year 2001 results. Executive Vice President and Chief Financial Officer Douglas H. Greeff said, "During 2001 we made considerable progress in improving Revlon. Our results demonstrate continued overall improvement in the Company's operations during 2001. On an ongoing basis in 2001 versus 2000, market share in the U.S. from new Revlon brand color cosmetic products more than doubled and sales returns and allowances and departmental general and administrative expenses have decreased substantially. We achieved an improvement in our EBITDA(1) margins from ongoing operations (as a percentage of net sales), which increased to 15.3% in 2001 from 14.1% in 2000. We refinanced our bank credit agreement extending its maturity to 2005, and issued $363 million of debt securities. Additionally, we improved our liquidity in connection with these refinancings. While we made significant progress in 2001 with new products, we were disappointed with the overall level of consumption of our products. Improving consumer take-away of our products is our primary goal for the 2002 and 2003 period." Please read the notes at the end of this release for a detailed description of ongoing operations and reconciliation of results as reported to results from ongoing operations. Comparison of Ongoing Operations - Fourth Quarter(2) The ongoing operations financial information, for the 2001 and 2000 periods is provided to allow a comparison of results solely from ongoing operations. Net sales in the fourth quarter of 2001 were $332.5 million, compared with $300.4 million in the fourth quarter of 2000, an increase of 10.7% or 13.0% on a comparable currency basis. Operating income was $31.1 million in the fourth quarter of 2001, compared with $7.2 million in the fourth quarter of 2000. EBITDA was $57.4 million in the fourth quarter of 2001, compared with $42.4 million in the fourth quarter of 2000. Loss before an extraordinary item in the fourth quarter 2001 was $6.5 million, or $0.12 per diluted share, compared with $29.2 million, or $0.56 per diluted share, for the fourth quarter of 2000. In North America, which includes the U.S. and Canada, net sales were $220.8 million for the fourth quarter of 2001, compared with $188.4 million in the fourth quarter of 2000, an increase of 17.2%. This increase was driven primarily by lower sales returns and allowances as a result of the Company's revised trade terms and increased sales of $14.0 million resulting from the decision by two major U.S. retailers to shift the timing of plan-o-gram resets for 2002 new products. International net sales were $111.7 million for the fourth quarter of 2001, compared with $112.0 million in the fourth quarter of 2000. On a constant U.S. dollar basis, this represents a 5.5% increase, which was primarily due to higher new product sales, partially offset by difficulties in the economy and increased sales returns in the Company's Argentine operations. Comparison of Ongoing Operations - Full year(3) Net sales for the full year 2001 were $1,305.1 million, compared with $1,303.7 million in the full year of 2000. On a constant U.S. dollar basis, this represents an increase of 2.6%. In North America, net sales were $901.0 million in 2001, compared with $860.1 million in 2000. The increase of 4.8% was driven primarily by lower sales returns and allowances as a result of the Company's revised trade terms. International net sales were $404.1 million in 2001, compared with $443.6 million in 2000, a decrease of 8.9% or 2.4% on a constant U.S. dollar basis. The decrease in international is primarily due to competitive pressures worldwide and difficulties in the economy and increased sales returns in the Company's Argentine operations, partially offset by higher new product sales. Operating income and EBITDA in the full year of 2001 were $100.4 million and $200.2 million, respectively, compared with operating income of $69.3 million and EBITDA of $184.4 million in the full year of 2000. This represented an increase of 44.9% in operating income and an increase of 8.6% in EBITDA for 2001 versus the prior year. Loss before an extraordinary item was $51.4 million, or $0.98 per diluted share in the full year of 2001, compared with $80.8 million, or $1.55 per diluted share in the full year of 2000. Results As Reported - Fourth Quarter Net sales in the fourth quarter 2001 were $332.5 million, compared with net sales of $313.6 million in the fourth quarter 2000. The 2000 period includes sales from the Colorama business, which we disposed of in July 2001. Operating income was $12.4 million in the fourth quarter 2001, compared with an operating loss of $22.7 million in the fourth quarter 2000. Net loss (including an extraordinary item of $3.6 million, or $0.07 per share related to early extinguishment of debt) in the fourth quarter 2001 was $28.3 million, or $0.54 per diluted share before an extraordinary item, compared with a net loss of $51.3 million, or $0.98 per diluted share, in the fourth quarter of 2000. Results As Reported - Full year For 2001, net sales were $1,321.5 million, compared to $1,447.8 million in 2000, which included sales from the worldwide professional products and Plusbelle businesses until their respective dispositions in the first half of 2000, and the Colorama business until its disposition in July 2001. In 2001, operating income was $16.1 million versus $15.9 million in 2000. In 2001, net loss (including an extraordinary item of $3.6 million, or $0.07 per share related to early extinguishment of debt) was $153.7 million or $2.94 per diluted share. In 2000, net loss was $129.7 million or $2.49 per diluted share. Summary of Key Achievements in 2001 Mr. Greeff continued, "We set specific cost and growth objectives early in 2001 and achieved significant progress against each of them. On the cost initiatives we met or exceeded our goals, and we created a strong operating platform for future growth. In the future, our primary focus will be consumer and retail customer driven growth while maintaining our expense discipline. Manufacturing Plant Utilization Improved: We completed the consolidation of our global manufacturing facilities on target and on budget. Since late 2000, we sold or closed 55% of our manufacturing and distribution facility square footage. We increased utilization at our primary North American facility in Oxford, North Carolina from under 50% to over 80%. Trade Partnerships: We successfully implemented our revised U.S. trade terms and continued to focus on increasing consumer take-away, enabling us to work more efficiently with our retail partners. This has had a significant impact on how the Company brings its products to consumers. The Company reduced its emphasis on promotional products, which contributed to overall profitability by reducing operating expenses, such as display costs, and reducing returns. The revised trade terms resulted in a significant reduction in sales returns and allowances (which were partially offset by corresponding lower gross sales volume). This success was coupled with lower overall inventories of the Company's products at our top seven U.S. retail customers based upon their own estimates. In cooperation with our retailers, and for the second year in a row, we did not increase pricing for 2002. SG&A Expense Reductions: We exceeded our expectations of lowering departmental general and administrative expenses to $283 million or $17 million below our $300 million target for 2001. Departmental general and administrative expenses for ongoing operations decreased by approximately 15% or $50 million in 2001 versus the prior year. We have reduced departmental general and administrative expenses from 25.5% of net sales in 2000 to 21.7% in 2001. Bank Debt Refinanced: As previously announced, through a new bank credit agreement and issuance of new debt securities, we refinanced our bank credit agreement extending the maturity to 2005. In addition to completing our asset sales, the refinancing provides us with additional liquidity. New Product Launches: We believe the Company generated the most excitement and innovation in years from our 2001 new product launches. According to ACNielsen(4), in the U.S., Revlon branded sales from new color cosmetics products launched in 2001 contributed 2.5 share points, which is more than double the amount generated in 2000. Also according to ACNielsen, of the top twenty new color cosmetic products launched this past year in the U.S., Revlon brand products represented more sales to consumers than any other brand. Among our most successful introductions were: Revlon Skinlights -- Skin Brighteners, an entirely new color category in mass distribution; Revlon High Dimension 10 Minute Hair Color; and Almay Kinetin Skin Care. Each of these significant new products has established a solid platform for expansion. Building on the success of the Revlon Skinlights and Almay Kinetin franchises, the Company began selling the first of its 2002 new products in December to its major U.S. customers. The new Revlon Skinlights and Almay Kinetin color cosmetics were on counter beginning in January and initial point of sale data on the launch is positive. New Advertising: As previously announced, in January 2002 we consolidated advertising for both the Revlon and Almay brands with one firm, Deutsch, Inc. Deutsch will help us modernize and reinvigorate the Revlon brand image; as well as improve the strategic and creative aspects of the brand. Revlon recently added to its already impressive line up of spokes-models, including Halle Berry and Caroline Ribeiro, award-winning actress Julianne Moore and rising actress James King. In December, Revlon launched new TV and print advertising featuring Julianne Moore, and in early 2002 Revlon plans to feature new advertising with James King. Also in the fourth quarter, the Almay brand launched new TV and print campaigns for Almay Skin Stays Clean. We are very proud of the results achieved in 2001 and expect to continue to improve the strength of our business in 2002 by building on the platform we established in 2001. Our focus for 2002 is profitable growth. This year is the 70th anniversary of Revlon, which highlights the tradition and longevity of the brand. In 2002 we expect to introduce new products, new packaging and new in-store displays all building on our heritage. We look forward to continued positive results." The Company will host an analyst call on February 25, 2002 at 11:00 a.m. EST to discuss fourth quarter and full year 2001 results. The conference call will be webcast on our website http://www.revloninc.com . About Revlon Revlon is a worldwide cosmetics, skincare, fragrance, and personal care products company. The Company's vision is to become the world's most dynamic leader in global beauty and skincare. Web sites featuring current product and promotional information, as well as corporate investor relation's information, can be reached at http://www.RevlonInc.com, http://www.Revlon.com, and http://www.Almay.com. The company's brands include Revlon(R), Almay(R), Ultima(R), Charlie(R) and Flex(R) and they are sold worldwide. Footnotes to Press Release (1) EBITDA throughout this press release is defined as earnings from the Company's ongoing operations before interest, taxes, depreciation and amortization (or operating income from ongoing operations plus depreciation and amortization expenses). EBITDA is presented here as a measure of our debt service ability, not of our operating results. EBITDA should not be considered in isolation, as a substitute for net income or cash flow from operations prepared in accordance with accounting principles generally accepted in the United States of America or as a measure of our profitability or liquidity. (2) Ongoing operations are presented in order to provide a more comparative analysis of our results of operations for the periods presented by eliminating one-time items and the results of business and brands which have been sold. Excludes operating results from the Colorama business, which was sold in July 2001, a gain on the sale of a building in Puerto Rico, which was sold in December 2001, an adjustment in the fourth quarter 2001 to businesses sold in 2000, and an extraordinary charge related to the refinancing of our credit agreement in November 2001. Includes the operating results for the Charles of the Ritz brand for all periods presented, which was acquired from an affiliate in September 2001. Excludes restructuring costs of $12.6 million and $25.8 million in the fourth quarter of 2001 and 2000, respectively, and additional consolidation costs of $6.1 million and $4.9 million in the fourth quarter of 2001 and 2000, respectively, primarily associated with the closing of the Phoenix facility. (3) Ongoing operations are presented in order to provide a more comparative analysis of our results of operations for the periods presented by eliminating one-time items and the results of business and brands which have been sold. Excludes gains, losses and operating results for sold businesses including worldwide professional products and Plusbelle, which were sold in the first and second quarters of 2000, respectively and Colorama, which was sold in July 2001, and the loss on the sale of the Company's Maesteg, Wales operations, which were sold in July 2001, a gain on the sale of a building in Puerto Rico, which was sold in December 2001, an adjustment in the fourth quarter 2001 to businesses sold in 2000, and an extraordinary charge related to the refinancing of our credit agreement in November 2001. Includes the operating results for the Charles of the Ritz brand for all periods presented, which was acquired from an affiliate in September 2001. Excludes restructuring costs of $38.1 million and $54.1 million for 2001 and 2000, respectively, and additional consolidation costs of $43.6 million and $4.9 million for 2001 and 2000, respectively, associated with the closing of the Phoenix and Canada facilities. (4) All market share data is according to ACNielsen (an independent research entity). ACNielsen data for December quarter to date and year to date excludes Wal-Mart, as Wal-Mart no longer provides its data to ACNielsen or its competitors. You may visit our website, http://www.revloninc.com, for a Statement of Ongoing Operations for the quarters and years ended December 31, 2001 and December 31, 2000. See the reconciliation of reported results to ongoing operations reported herein. Forward-Looking Statements Statements in this press release which are not historical facts, including statements about the Company's plans, strategies, beliefs and expectations, are forward-looking and subject to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements speak only as of the date they are made, and except for the Company's ongoing obligations to disclose material information under the U.S. federal securities laws, the Company undertakes no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise. Investors are advised, however, to consult any additional disclosures the Company makes in its Quarterly Reports on Form 10-Q, Annual Report on Form 10-K and Current Reports on Form 8-K to the Securities and Exchange Commission (which, among other places, can be found on the SEC's website at http://www.sec.gov or on the Company's website at http://www.revloninc.com). Such forward looking statements include, without limitation, the Company's expectations and estimates about future events including the Company's expectations regarding: (i) the Company's expectation that it has created a strong operating platform for future growth and that it will continue to improve the strength of its business in 2002; (ii) the Company's expectation that it will introduce new products, packaging and in- store displays in 2002; (iii) the Company's expectations regarding advertising plans in 2002 and expected benefits from implementing new advertising strategies in 2002; and (iv) the availability of funds from currently available credit facilities and from the issuance of the debt securities to fund the Company's operations. Actual results may differ materially from such forward-looking statements for a number of reasons, including those set forth in the Company's filings with the SEC, including its Form 10-K for 2001, and reasons including difficulties, delays in or the inability of the Company to: (i) continue to grow and improve the strength of its business in 2002; (ii) introduce new products, packaging and in-store displays in 2002; (iii) introduce planned new advertising and implement new advertising strategies in 2002; or (iv) access funds under the Company's credit facilities or have greater than expected demand on its availability of cash. Factors other than those listed above could cause the Company's results to differ materially from expected results. REVLON, INC. AND SUBSIDIARIES CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS (dollars in millions, except per share data) Three Months Ended Year Ended December 31, December 31, 2001 2000 2001 2000 (Unaudited) Net sales $332.5 $313.6 $1,321.5 $1,447.8 Cost of sales 139.8 141.1 544.2 574.3 Gross profit 192.7 172.5 777.3 873.5 Selling, general and administrative expenses 167.7 169.4 723.1 803.5 Restructuring costs 12.6 25.8 38.1 54.1 Operating income (loss) 12.4 (22.7) 16.1 15.9 Other expenses (income): Interest expense 35.7 35.6 140.5 144.5 Interest income (1.9) (0.7) (3.9) (2.1) Amortization of debt issuance costs 1.6 1.1 6.2 5.6 Foreign currency (gains) losses, net (0.3) 0.6 2.2 1.6 (Gain) loss on sale of brands and facilities, net (0.6) (7.8) 14.4 (10.8) Miscellaneous, net 1.8 (1.8) 2.7 (1.8) Other expenses, net 36.3 27.0 162.1 137.0 Loss before income taxes and extraordinary item (23.9) (49.7) (146.0) (121.1) Provision for income taxes 0.8 1.6 4.1 8.6 Loss before extraordinary item (24.7) (51.3) (150.1) (129.7) Extraordinary item - early extinguishment of debt, net of tax (3.6) - (3.6) - Net loss $(28.3) $(51.3) $(153.7) $(129.7) Basic and diluted loss per common share: Loss before extraordinary item $(0.47) $(0.98) $(2.87) $(2.49) Extraordinary item (0.07) - (0.07) - Basic and diluted net loss per common share $(0.54) $(0.98) $(2.94) $(2.49) Weighted average number of common shares outstanding: Basic and diluted 52,199,468 52,199,268 52,199,349 52,166,980 REVLON, INC. AND SUBSIDIARIES CONSOLIDATED CONDENSED BALANCE SHEETS (dollars in millions) December 31, December 31, ASSETS 2001 2000 Current assets: Cash and cash equivalents $103.3 $56.3 Marketable securities 2.2 - Trade receivables, net 203.9 220.5 Inventories 157.9 184.8 Prepaid expenses and other 45.6 66.1 Total current assets 512.9 527.7 Property, plant and equipment, net 142.8 221.7 Intangible and other assets, net 341.9 352.4 Total assets $997.6 $1,101.8 LIABILITIES AND STOCKHOLDERS' DEFICIENCY Current liabilities: Short-term borrowings - third parties $17.5 $30.7 Accounts payable, accrued expenses and other 368.3 397.0 Total current liabilities 385.8 427.7 Long-term debt 1,643.6 1,563.1 Other long-term liabilities 250.9 217.7 Total stockholders' deficiency (1,282.7) (1,106.7) Total liabilities and stockholders' deficiency $997.6 $1,101.8 REVLON, INC. AND SUBSIDIARIES SUMMARY UNAUDITIED ONGOING FINANCIAL DATA AND TABULAR RECONCILIATION TO THE AS REPORTED FINANCIAL DATA (dollars in millions, except per share data) In order to provide a comparison of results as reported to results from ongoing operations, the following sets forth certain summary unaudited data for the Company reconciling our actual as reported results to our ongoing operations, after giving effect to the following: (i) the disposition of the worldwide professional products line, and the Plusbelle and Colorama brands assuming such transactions occurred on January 1, 2000, (ii) the elimination of restructuring costs in the period incurred, (iii) the elimination of additional costs associated with the closing of the Phoenix and Canada facilities that were included in cost of sales and selling, general and administrative expenses in the period incurred, (iv) the elimination of (gain)/loss on the sale of brands and facilities, net, (v) the elimination of an extraordinary item related to the early extinguishment of debt (after giving effect thereto, the "Ongoing Operations"). The adjustments are based upon available information and certain assumptions that our management believes are reasonable and do not represent proforma adjustments prepared in accordance with Regulation S-X. The summary unaudited data for the Ongoing Operations does not purport to represent the results of operations or our financial position that actually would have occurred had the foregoing transactions referred to in (i) above been consummated on January 1, 2000. Quarter Ended December 31, 2001: Product line, Restructuring brands and costs and Ongoing As reported facililties sold other, net Operations Net sales $ 332.5 $ - $ - $ 332.5 Gross profit 192.7 - 7.6 200.3 Selling, general and administrative expenses 167.7 - 1.5 169.2 Restructuring costs and other, net 12.6 - (12.6) - Operating income 12.4 - 18.7 31.1 Other expenses, net 36.3 0.6 (0.1) 36.8 Loss before income taxes and extraordinary item (23.9) (0.6) 18.8 (5.7) Loss before extraordinary item (24.7) (0.6) 18.8 (6.5) Net loss $ (28.3) $ (0.6) $ 22.4 $ (6.5) Diluted (loss) per common share before extraordinary item $ (0.47) $ (0.01) $ 0.36 $ (0.12) EBITDA: Operating income $ 12.4 $ - $ 18.7 $ 31.1 Depreciation and amortization 26.3 - - 26.3 EBITDA $ 38.7 $ - $ 18.7 $ 57.4 REVLON, INC. AND SUBSIDIARIES UNAUDITED SUMMARY ONGOING FINANCIAL DATA (dollars in millions, except per share data) Quarter Ended December 31, 2000: Product line, Restructuring brands and costs and Ongoing As reported facililties sold other, net Operations Net sales $ 313.6 $ (13.2) $ - $ 300.4 Gross profit 172.5 (5.6) 4.9 171.8 Selling, general and administrative expenses 169.4 (4.8) - 164.6 Restructuring costs and other, net 25.8 - (25.8) - Operating income/(loss) (22.7) (0.8) 30.7 7.2 Other expenses, net 27.0 7.8 - 34.8 Loss before income taxes and extraordinary item (49.7) (8.6) 30.7 (27.6) Loss before extraordinary item $ (51.3) $ (8.6) $ 30.7 $ (29.2) Net loss $ (51.3) $ (8.6) $ 30.7 $ (29.2) Diluted (loss) per common share before extraordinary item $ (0.98) $(0.16) $ 0.59 $ (0.56) EBITDA: Operating income/ (loss) $ (22.7) $ (0.8) $ 30.7 $ 7.2 Depreciation and amortization $ 36.1 $ (0.6) $ (0.3) $ 35.2 EBITDA $ 13.4 $ (1.4) $ 30.4 $ 42.4 REVLON, INC. AND SUBSIDIARIES UNAUDITED SUMMARY ONGOING FINANCIAL DATA (dollars in millions, except per share data) Year Ended December 31, 2001: Product line, Restructuring brands and costs and Ongoing As reported facililties sold other, net Operations Net sales $ 1,321.5 $ (16.4) - $ 1,305.1 Gross profit 777.3 (6.5) $ 38.2 809.0 Selling, general and administrative expenses 723.1 (9.1) (5.4) 708.6 Restructuring costs and other, net 38.1 - (38.1) - Operating income 16.1 2.6 81.7 100.4 Other expenses, net 162.1 (14.4) - 147.7 Loss before income taxes and extraordinary item (146.0) 17.0 81.7 (47.3) Loss before extraordinary item (150.1) 17.0 81.7 (51.4) Net loss $ (153.7) $ 17.0 $ 85.3 $ (51.4) Diluted (loss) per common share before extraordinary item $ (2.87) $ 0.33 $ 1.56 $ (0.98) EBITDA: Operating income $ 16.1 $ 2.6 $ 81.7 $ 100.4 Depreciation and amortization 108.5 (1.1) (7.6) 99.8 EBITDA $ 124.6 $ 1.5 $ 74.1 $ 200.2 REVLON, INC. AND SUBSIDIARIES UNAUDITED SUMMARY ONGOING FINANCIAL DATA (dollars in millions, except per share data) Year Ended December 31, 2000: Product line, Restructuring brands and costs and Ongoing As reported facililties sold other, net Operations Net sales $ 1,447.8 $ (144.1) - $ 1,303.7 Gross profit 873.5 (77.8) $ 4.9 800.6 Selling, general and administrative expenses 803.5 (72.2) - 731.3 Restructuring costs and other, net 54.1 - (54.1) - Operating income 15.9 (5.6) 59.0 69.3 Other expenses, net 137.0 5.3 - 142.3 Loss before income taxes and extraordinary item (121.1) (10.9) 59.0 (73.0) Loss before extraordinary item $ (129.7) $ (10.1) $ 59.0 $ (80.8) Net loss (129.7) $ (10.1) $ 59.0 $ (80.8) Diluted (loss) per common share Loss before extraordinary item $ (2.49) $ (0.19) $ 1.13 $ (1.55) EBITDA: Operating income $ 15.9 $ (5.6) $ 59.0 $ 69.3 Depreciation and amortization 121.2 (5.8) (0.3) 115.1 EBITDA $ 137.1 $ (11.4) $ 58.7 $ 184.4SOURCE Revlon, Inc.
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