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| Revlon Reports First Quarter Results; Revlon Brand Number One in U.S. Mass Color Cosmetics Market |
Exciting 1999 Lineup of Innovative New Products;
Company Announces Strong Start for EveryLash Mascara;
Major Lip Product Introduction in Second Half
NEW YORK, April 29 /PRNewswire/ -- Revlon, Inc. (NYSE: REV) today
announced its first quarter results for 1999. Strength in key segments of the
Company's portfolio contributed to an increase in market share compared to the
previous quarter.
In the first quarter of 1999, loss from continuing operations before
restructuring charges was $26.0 million, or $.51 per diluted share, compared
to a loss of $15.3 million, or $.30 per diluted share in the first quarter of
1998. In the first quarter, net sales were $441.1 million, a decrease of
11.4% compared with the first quarter of 1998 on a reported basis or a
decrease of 8.8% on a constant U.S. dollar basis. Operating income was
$12.5 million in the first quarter of 1999, before restructuring charges of
$8.2 million, compared to operating income of $28.7 million in the first
quarter of 1998. EBITDA was $41.6 million in the first quarter of 1999 before
restructuring charges, as compared to $54.2 million in the 1998 period.
"As expected, our sales were adversely impacted by continuing reductions
of retailer inventories, as well as slower than anticipated category growth
through most of the quarter," said George Fellows, President and Chief
Executive Officer. "Continued uncertainties in the global marketplace also
affected results for the quarter. We are addressing the challenges we face in
our key markets through a number of steps, including our previously-announced
restructuring program intended to increase efficiencies and enhance our
competitive position. This program is well under way, and we have begun to
realize the benefits.
"The U.S. mass market dollar share for Revlon's portfolio of brands
increased to 28.9% in the quarter, up from 27.6% for the fourth quarter of
1998, according to AC Nielsen, indicating that consumer takeaway remains
strong while progress continues on reducing retailer inventories. The Revlon
brand continues to be number one in color cosmetics.
"We also are very enthusiastic about our lineup of exciting new products,
such as EveryLash mascara, which provides a unique delivery system for
separating lashes," Fellows continued. "Since the launch of our ad campaign,
EveryLash has achieved significant market share. In the second half, we are
launching another technologically advanced major new product, ColorStay Liquid
Lip, which utilizes proprietary "liquid colorset" technology. ColorStay
Liquid Lip addresses comfort, the number one need in the long-wearing
category. The response from our major retail accounts has been outstanding."
Fellows noted that Revlon is continuing its role as the industry leader
with innovative products such as Revlon's Super Lustrous Haircolor, which
kicked off its advertising campaign at the Academy Awards. Other new or
soon-to-be launched products include Revlon Age Defying Makeup and Concealer,
ColorStay Compact Makeup, Almay Stay Smooth mascara and medicated lipcolor and
the expansion of Ultima II's successful Glowtion Skin Brightening franchise.
Glowtion has created a whole new "skin brightener" segment in the mass market.
In the professional market, American Crew has created Modern Organic Products,
a unique approach to hair care for the family, which has received enthusiastic
support from salons and exclusive distributors.
"Our fundamentals are strong: Revlon is one of the world's best known
brand names in cosmetics. It stands for high-quality, innovative products and
marketing expertise that has helped to create one of the strongest cosmetics
franchises in the world," said Fellows. "These fundamental strengths will
continue to fuel growth for Revlon."
QUARTERLY PERFORMANCE
In the U.S., net sales were $249.8 million for the first quarter, compared
with $283.7 million in the same period last year. As expected, net sales were
lower than the first quarter of 1998 due to continuing adjustments in
inventory levels by retailers. Slower than anticipated category growth also
affected net sales.
International net sales were $191.3 million for the first quarter,
compared to $214.1 million in the first quarter of 1998, a decrease of
10.6% on a reported basis. International net sales on a constant U.S. dollar
basis declined 4.5%, primarily due to unfavorable economic conditions in
certain markets outside of the U.S., which restrained consumer and trade
demand, and lower than expected sales in certain markets in Europe.
Selling, general and administrative expenses other than advertising and
consumer-directed expenses were $205.2 million in the first quarter compared
to $217.9 million in the first quarter of 1998. The decrease in the first
quarter of this year reflects, in part, the benefits of our previously
announced restructuring program.
Net loss was $34.2 million, or $.67 per diluted share in the first quarter
of 1999, including $8.2 million, or $.16 per diluted share, in connection with
the Company's previously announced restructuring program. Net loss was
$58.1 million, or $1.14 per diluted share in the first quarter of 1998, which
included loss from discontinued operations of $4.6 million, or $.09 per
diluted share, and $38.2 million, or $.75 per diluted share, of extraordinary
charges in connection with refinancings.
Revlon is a worldwide leader in cosmetics, skin care, fragrance, personal
care and professional products. The Company's vision is to provide glamour,
excitement and innovation through quality products at affordable prices. A
web site featuring current product and promotional information can be reached
at http://www.revlon.com. Revlon's brands include Revlon(R), ColorStay(R),
Revlon Age Defying, StreetWear(R), Almay(R), Ultima II(R), Super Lustrous(R),
African Pride(R), Creme of Nature(R), Charlie(R) and Flex(R) and are sold in
approximately 175 countries and territories.
FORWARD-LOOKING STATEMENTS
Information in this press release includes forward-looking statements made
pursuant to the safe harbor provisions of the Private Securities Litigation
Reform Act of 1995. Such statements include, without limitation, the
Company's estimate of restructuring activities and resulting benefits,
including the Company's intention to increase it efficiencies and enhance its
competitive position, the Company's expectations regarding new product
launches including the Company's intent to continue as the industry leader
with innovative products and the Company's expectations that its fundamental
strength will continue to fuel growth. In addition to the factors that are
described in the Company's SEC filings, including its annual and quarterly
reports, the following factors could cause actual results to differ materially
from those expressed in the forward-looking statements: (i) difficulties or
delays in or unexpected costs or lower than expected savings and benefits from
the restructuring; (ii) difficulties or delays in new product introductions in
1999; (iii) difficulties or delays in developing and introducing technology-
based innovative products or in continuing as the industry-leader with
innovative products; (iv) difficulties or delays in realizing future growth
from the Company's fundamental strengths; and (v) actions by competitors
including business combinations, technological breakthroughs, new product
offerings and marketing and promotional success. The Company assumes no
responsibility to update forward-looking information contained herein.
REVLON, INC. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(dollars in millions, except per share data)
Three Months Ended
March 31,
1999 1998
Net sales $441.1 $497.8
Cost of sales 155.7 163.3
Gross profit 285.4 334.5
Selling, general and
administrative expenses 272.9 305.8
Business consolidation
costs and other, net 8.2 --
Operating income 4.3 28.7
Other expenses (income):
Interest expense 35.9 36.7
Interest income (1.1) (1.3)
Amortization of debt issuance costs 1.3 1.6
Foreign currency losses, net -- 1.5
Miscellaneous, net 0.5 1.8
Other expenses, net 36.6 40.3
Loss from continuing operations
before income taxes (32.3) (11.6)
Provision for income taxes 1.9 3.7
Loss from continuing operations (34.2) (15.3)
Loss from discontinued operations -- (4.6)
Extraordinary items - early
extinguishments of debt -- (38.2)
Net loss $(34.2) $(58.1)
Basic loss per common share:
Loss from continuing operations $(0.67) $(0.30)
Loss from discontinued operations -- (0.09)
Extraordinary items -- (0.75)
Net loss per common share $(0.67) $(1.14)
Diluted loss per common share:
Loss from continuing operations $(0.67) $(0.30)
Loss from discontinued operations -- (0.09)
Extraordinary items -- (0.75)
Net loss per common share $(0.67) $(1.14)
Weighted average number of
common shares outstanding:
Basic 51,236,771 51,179,923
Dilutive 51,236,771 51,179,923
REVLON, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
(dollars in millions)
March 31, December 31,
ASSETS 1999 1998
(Unaudited)
Current assets:
Cash and cash equivalents $35.8 $34.7
Trade receivables, net 395.7 536.0
Inventories 274.2 264.1
Prepaid expenses and other 70.3 69.9
Total current assets 776.0 904.7
Property, plant and equipment, net 361.0 378.9
Intangible and other assets, net 540.9 546.4
Total assets $1,677.9 $1,830.0
LIABILITIES AND STOCKHOLDERS' DEFICIENCY
Current liabilities:
Short-term borrowings
- third parties $34.2 $27.9
Current portion of long-term
debt - third parties 5.7 6.0
Accounts payable, accrued
expenses and other 441.2 524.5
Total current liabilities 481.1 558.4
Long-term debt 1,636.7 1,654.0
Other long-term liabilities 268.2 265.6
Total stockholders' deficiency (708.1) (648.0)
Total liabilities and
stockholders' deficiency $1,677.9 $1,830.0
SOURCE Revlon, Inc.
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CONTACT:
Press - Walter Montgomery, 212-527-5791, or
Investor Relations - Deena S. Fishman, 212-527-5230, both of
Revlon
NOTE TO EDITORS: Revlon press releases are available at the
Revlon website at http://www.revlon.com.
