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| Revlon Reports First Quarter Performance |
Turnaround On Track and Street Estimates Are Exceeded
NEW YORK, May 3 /PRNewswire/ -- Revlon, Inc. (NYSE: REV) today announced
first quarter 2001 results. President and Chief Executive Officer Jeffrey M.
Nugent said, "The Revlon turnaround is working. First quarter results met
expectations and our bottom line results beat First Call consensus estimates
by $0.22 per share. Though not yet fully implemented, Revlon's turnaround
strategy of innovative products, new and increased advertising and highly
disciplined cost structure realignment is already yielding tangible benefits.
The Company is on track to meet its turnaround plan."
Ongoing Operations(1),(2)
Comparison of Ongoing Results
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 first quarter of 2001 were $323.3 million
compared with $355.4 million in the first quarter of 2000. Operating income
was $12.8 million in the first quarter of 2001 compared with operating income
of $16.2 million in the first quarter of 2000.
EBITDA was $36.2 million in the first quarter of 2001 compared with
$43.5 million in the first quarter of 2000. Net loss in the first quarter
2001 was $24.3 million, or $0.47 per diluted share, compared with a net loss
of $23.7 million, or $0.46 per diluted share, for the first quarter of 2000.
These results beat First Call consensus estimates of a loss of $0.69 per
share.
Mr. Nugent continued, "We are pleased that our new product launches
performed well and according to our plan. We also had substantially reduced
operating costs as a result of our continuing restructuring efforts, which
decreased our departmental, general and administrative costs compared with
prior year. These planned actions allowed us to get closer to achieving one
of our stated objectives of gaining a better balance between profitability and
growth."
"As we expected, 2001 first quarter net sales were lower than in the first
quarter 2000 due to decreased promotional sales volume, the effect of lower
advertising spending, and the effect of delaying the reset of the permanent in
store wall displays in the U.S."
"Also as part of our plan, we expect to increase our advertising spending
in the second quarter vs. the prior year and expect to see higher sales of our
new products as the impact of higher advertising, more new products, and the
impact of wall resets is felt."
On an ongoing operational basis, in the U.S. and Canada, net sales were
$218.4 million for the first quarter of 2001, compared with $233.1 million in
the first quarter of 2000, a decrease of 6.3%.
International net sales were $104.9 million for the first quarter of 2001
compared with $122.3 million in the first quarter of 2000, a decrease of
14.2% on a reported basis or 6.3% on a constant U.S. dollar basis.
Departmental general and administrative expenses were $79.5 million in the
first quarter of 2001 compared with $93.7 million in the first quarter of
2000, a decrease of 15.2%.
(1) Excludes restructuring charges of $14.6 million in 2001 and
$9.5 million in 2000, and additional consolidation costs of
$8.1 million in 2001 (which includes $6.2 million of accelerated
depreciation) associated with the closing of the Phoenix facility,
which are included in cost of sales and selling, general and
administrative expenses. 2000 results have been reclassified to
reflect the change in accounting for EITF 00-14, Accounting for
Sales Incentives, and to reflect the inclusion of Canada with our
U.S. results.
(2) Excludes the net gain on the sale of the worldwide professional
products business, and the operating results of the worldwide
professional products and Plusbelle businesses, which were sold in the
first and second quarters of 2000, respectively.
Results as Reported(1)
On an as reported basis, net sales in the first quarter of 2001 were
$323.3 million, compared with net sales of $448.8 million in the 2000 first
quarter. The 2000 period includes the operating results from the worldwide
professional products and the Plusbelle businesses that were disposed of in
the first half of 2000. First quarter 2001 EBITDA was $36.2 million compared
with the first quarter 2000 EBITDA of $51.2 million. Operating income was
$12.8 million in the first quarter 2001 compared with $20.6 million in the
2000 quarter. Net loss in the first quarter 2001 was $24.3 million, or
$0.47 per diluted share, compared with a net loss of $18.4 million, or
$0.36 per diluted share, in the first quarter of 2000.
Progress in Turnaround Plan: Summary of Key Developments
"The Company is vigorously implementing its turnaround strategy on several
fronts," said Mr. Nugent. Some of the highlights include:
New Product Launches: We have successfully introduced the first new
products in our pipeline for 2001 which included Revlon Skinlights, Revlon
Vitamin C Absolutes, Revlon Illuminance Creme Shadow, Super Top Speed Nail
Color, Beauty Tools, Almay Milk Plus, Organic Fluoride Plus Healthy Nail, and
Wake-up Call Energizing Make-up, and several Revlon and Almay line extensions.
Of the top 20 new mass market cosmetics products introduced in the U.S.
this year, 8 are Revlon products representing 45% of the top 20 new product
sales. Customer response and ACNielsen market share data indicate that
Skinlights Face Illuminators is the biggest new launch in mass market U.S.
color cosmetics so far this year having outpaced the second place launch by
2 to 1.
Our customers have expressed significant interest in Almay Kinetin Skin
Care and Revlon High Dimension Hair Color that are planned to ship in May to
be on counter beginning in June.
Almay Kinetin Skincare represents a breakthrough in providing healthy
anti-aging benefits without irritation such as burning, redness or flaking, or
increased sensitivity to the sun. Revlon's High Dimension Hair Color is the
first and only permanent home hair color that works in just 10 minutes. It
features a Revlon patent-pending "Liquid Crystal" formula and provides rich
permanent hair color that stays true. The gentle formula adds depth and
dimension to hair, leaving it soft and flexible while a patented UV filter
protects hair from damaging environmental exposure.
Trade Partnerships: We believe we are well positioned with our retailers
and we are working cooperatively on profitably building our mutual businesses
and eliminating unnecessary costs in the supply chain process primarily
through return reductions. Customer support on our new item launches has been
even better than we anticipated. Our new POS (point of sale) tracking system
has allowed us to focus our efforts with retailers on consumption (sell
through). Importantly, POS information is available on a real time basis at
individual store levels allowing us to move much more quickly in identifying
both problems and opportunities.
SG&A Expense Reductions: We continue to reduce the departmental general
and administrative costs, and we are in line to get our expenses down to
targeted levels by the end of this year.
Manufacturing Capacity: The consolidation of our Phoenix facility into
our Oxford, North Carolina plant is right on track. We have moved more than
half the production lines to Oxford and we expect to complete the
consolidation during the third quarter. As previously indicated we expect
that once complete, we will generate annualized savings of $25 million to
$30 million as a result of the consolidation.
New Advertising: Innovation in advertising is a continual focus for the
Company. The new campaign for Skinlights and Absolutely Fabulous by
kirshenbaum, bond and partners for the Revlon brand are currently running.
Early press and consumer response is extremely favorable. Additional new
product advertising is under development and will run throughout the year.
Deutsch, Inc., which handles the Almay brand business, is slated for a July
release of their new Almay campaign. Both agencies are known worldwide for
their creativity and groundbreaking campaigns. We are excited about other new
campaigns that we expect to come out as other new products are launched.
"The results achieved so far in our turnaround plan are obvious and
tangible. I believe that we have formulated a winning strategy, and it will
succeed," Mr. Nugent said.
Revlon is a worldwide cosmetics, skin care, fragrance and personal care
products company. The Company's vision is to become the world's most dynamic
leader in global beauty and skin care. A web site featuring current product
and promotional information can be reached at http://www.Revlon.com. The Company's
brands include Revlon(R), Almay(R), Ultima(R), Charlie(R) and Flex(R) and they
are sold worldwide.
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. Such statements include, without
limitation, the Company's expectations and estimates about future events
including: (i) the Company's expectation that it will meet its plan results
for the year; (ii) the Company's expectation that it will increase advertising
spending in the second quarter versus the prior year; (iii) the Company's
expectation that it will have higher sales of new products as a result of
higher advertising, more new products and the impact of wall resets; (iv) the
Company's expectations regarding the timing and effect of planned new product
launches including, without limitation, Almay Kinetin Skin Care and Revlon
High Dimension Hair Coloring; (v) the Company's expectation that it will
continue to reduce departmental G&A to targeted levels by the end of the year;
and (vi) the Company's expectation regarding the timing as well as the
expected savings of the Phoenix to Oxford plant consolidations. 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 10K for 2000 and reasons including: (i) difficulties or
delays in or the inability to meet plan results for the year; (ii)
difficulties or delays in or the inability to increase advertising spending in
the second quarter; (iii) difficulties or delays in or the inability to
achieve higher sales of new products; (iv) difficulties or delays in launching
new products; (v) difficulties or delays in or the inability to reduce
departmental G&A to targeted levels by year-end; and (vi) difficulties or
delays in, or unexpected costs or less than expected savings in the Company's
plans to close the Phoenix facility.
The reference to First Call consensus estimates is for comparison purposes
only. The Company does not intend to adopt or endorse such estimates as its
own.
REVLON, INC. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(dollars in millions, except per share data)
Three Months Ended
March 31,
2001 2000
Net sales $323.3 $448.8
Cost of sales 131.4 175.2
Gross profit 191.9 273.6
Selling, general and administrative expenses 187.2 253.0
Restructuring costs 14.6 9.5
Operating (loss) income (9.9) 11.1
Other expenses (income):
Interest expense 35.2 39.4
Interest income (0.9) (0.4)
Amortization of debt issuance costs 1.8 2.5
Foreign currency gains, net (0.4) (0.5)
Gain on sale of product line, net -- (6.2)
Miscellaneous, net 0.8 0.5
Other expenses, net 36.5 35.3
Loss before income taxes (46.4) (24.2)
Provision for income taxes 0.6 3.7
Net loss $(47.0) $(27.9)
Basic and diluted loss per common share $(0.92) $(0.54)
Weighted average number of common shares outstanding:
Basic and diluted 51,365,935 51,242,837
REVLON, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
(dollars in millions)
March 31, December 31,
ASSETS 2001 2000
(Unaudited)
Current assets:
Cash and cash equivalents $30.2 $56.3
Trade receivables, net 213.1 220.3
Inventories 187.2 184.7
Prepaid expenses and other 68.2 66.1
Total current assets 498.7 527.4
Property, plant and equipment, net 206.1 221.7
Intangible and other assets, net 345.6 352.4
Total assets $1,050.4 $1,101.5
LIABILITIES AND STOCKHOLDERS' DEFICIENCY
Current liabilities:
Short-term borrowings - third parties $31.4 $30.7
Current portion of long-term
debt - third parties -- --
Accounts payable, accrued expenses and other 381.1 396.2
Total current liabilities 412.5 426.9
Long-term debt 1,582.3 1,563.1
Other long-term liabilities 219.4 217.6
Total stockholders' deficiency (1,163.8) (1,106.1)
Total liabilities and
stockholders' deficiency $1,050.4 $1,101.5
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SOURCE Revlon, Inc.
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CONTACT:
Press - Catherine Fisher, 212-527-5727, or
Investor - Laura Kiernan, 212-527-5230, both of Revlon
