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| Revlon Reports Record Second Quarter Results and Widens Its Lead As #1 Manufacturer In U.S. Mass Market Cosmetics |
NEW YORK, July 29 /PRNewswire/ -- Revlon, Inc. (NYSE: REV) today announced record performance for the second quarter of 1998 and marked the nineteenth consecutive quarter of growth in net sales, operating income and EBITDA compared with the corresponding quarter of the prior year. Net sales were $575.3 million, an increase of 7.0% over the second quarter of 1997 on an as reported basis or 9.8% on a constant U.S. dollar basis. Operating income was $51.5 million, an increase of 6.2% over the 1997 second quarter. EBITDA grew to $78.1 million, up 8.5% compared to last year's second quarter. Income from continuing operations for the second quarter of 1998 increased 39% to $11.7 million compared to $8.4 million in the second quarter of 1997. Basic income per share from continuing operations for the 1998 second quarter rose 44% to $.23, and diluted income per share from continuing operations increased 37.5% to $.22. In connection with Revlon's previously announced exit from retail operations, such operations are reported as discontinued. "This was an exciting quarter, with strong consumer response to new products and increased global distribution," said George Fellows, President and Chief Executive Officer. Revlon continued as the #1 manufacturer and widened its lead in dollar market share in the United States mass market color cosmetics category. Almay's U.S. retail sales increased 50% while Revlon brand U.S. retail sales were up 18%, each for the quarter compared to last year's second quarter according to AC Nielsen, significantly outpacing the total U.S. mass cosmetics market which was up approximately 13.1% for second quarter compared to the same period last year. Almay continued to be the fastest growing major cosmetics brand at retail in dollar market share while the Revlon brand widened its lead as the # 1 brand. Fellows noted, "Momentum continues for the Revlon and Almay franchises with strong consumer sales driving the growth in the color cosmetics category. Looking ahead, the Ultima II distribution expansion into select drug stores is underway with a new marketing program that targets the cosmetics and skin care needs of the 40+ woman. In the third quarter, we plan to expand the popular New Complexion line of face makeup with four major new products, including Even Out Makeup, with proprietary technology that provides a natural look while evening out skin tone." U.S. Operation In the U.S., net sales grew by 9.7% to $339.1 million for the second quarter compared with $309.2 million in the same period last year. Launches of innovative new products pairing technology with identified consumer needs, as well as continued demand for the Company's color cosmetics, contributed to the sales increase. New products include Revlon MoistureStay Lipcolor, Top Speed nail enamel, Almay Stay Smooth Anti-Chap Lipcolor and Almay One-Coat Collection. As previously reported, while consumer sell-through for the Revlon and Almay brands was strong in the first half of 1998, the Company's sales to its retail customers have been and may continue to be impacted by inventory balancing and reductions. International Operation International operations net sales were $236.2 million for the second quarter, compared to $228.5 million in the second quarter of 1997, an increase of 3.4% on an as reported basis or 10.0% on a constant U.S. dollar basis. Growth was attributable to successful new product introductions, including Top Speed nail enamel, and distribution expansion. This increase was partially offset by, on an as reported basis, the unfavorable effect of a stronger U.S. dollar against most foreign currencies and less favorable economic conditions and competitive activities in certain markets, including the Far East. Operating Income Operating income was $51.5 million, an increase of 6.2%, compared to $48.5 million for the same period last year. Advertising and consumer-directed promotion was $102.6 million in the second quarter of 1998 compared to $91.2 million in the second quarter of 1997. Selling, general and administrative expenses (other than advertising and consumer-directed promotion expenses) as a percentage of sales improved to 39.5% in the second quarter of 1998 from 40.3% in the second quarter of 1997. Income from Continuing Operations Up Income from continuing operations increased 39% for the quarter to $11.7 million compared to income from continuing operations of $8.4 million for the second quarter of 1997. Basic income per share from continuing operations for the 1998 second quarter increased to $.23 and diluted income per share from continuing operations increased to $.22 both compared to $.16 (on a basic and diluted basis) in the second quarter of 1997. In connection with the Company's previously announced exit from retail operations, a charge of $15.0 million, or $.30 and $.28 per basic and diluted share, respectively was recorded in the 1998 second quarter. Loss from discontinued operations was $11.9 million or $.23 (on a basic and diluted basis) in the 1998 second quarter compared to income from discontinued operations of $1.0 million, or $.02 per share (on a basic and diluted basis) in the 1997 second quarter. Included in the loss from discontinued operations is the Company's share of a one time charge recorded by the retail operation in connection with the implementation of its new strategic plan. Extraordinary charges related to the early extinguishments of debt were $13.5 million and $14.9 million in the 1998 and 1997 second quarters, respectively. Extraordinary loss per share was $.26 (on a basic and diluted basis) for the 1998 second quarter compared to $.29 (on a basic and diluted basis) for the 1997 second quarter. First Half Results Net sales for the first half increased 5.4% to $1.073 billion, operating income rose 17.6% to $80.2 million (after a non-recurring charge of $5.4 million related to business consolidation costs and other, net in the 1997 period) and EBITDA increased 16.5% to $132.3 million (after the non- recurring charge in the 1997 period). Loss from continuing operations for the first half of 1998 was $3.6 million, or $.07 per share, compared to a loss from continuing operations of $14.2 million, or $.28 per share for the first half of 1997. Loss from discontinued operations was $31.5 million or $.62 per share in the first half of 1998 compared to a loss from discontinued operations of $1.8 million, or $.03 per share in the first half of 1997. Extraordinary charges for early extinguishments of debt in connection with the refinancing of indebtedness at lower interest rates were $51.7 million and $14.9 million for the first half of 1998 and 1997, respectively. The per share amounts for the first half of 1998 and 1997 are the same on a basic and a diluted basis. 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 website 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, Almay(R), Ultima II(R), Charlie(R), Flex(R) and Creme of Nature(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 intent to dispose of the retail operations and expected charges associated with the exit from retail operations, plans to expand the New Complexion line, plans to continue the Ultima II expansion into select drug stores and the possible impact resulting from retail inventory balancing and reductions. In addition to the factors that are described in the Company's SEC filings, including its quarterly reports on Form 10-Q and annual reports on Form 10-K, the following factors could cause actual results to differ materially from those expressed in the forward-looking statements: (i) difficulties or delays in, or greater than expected charges associated with, the exit from retail operations; (ii) difficulties or delays or unanticipated expenses in the expansion of the New Complexion line and the continued expansion of the Ultima II line into select drug stores; (iii) greater than expected impact from retail inventory balancing and reductions; and (iv) 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 Six Months Ended June 30, June 30, 1998 1997 1998 1997 Net sales $ 575.3 $ 537.7 $1,073.1 $1,017.7 Cost of sales 194.0 181.2 357.3 341.6 Gross profit 381.3 356.5 715.8 676.1 Selling, general and administrative expenses 329.8 308.0 635.6 602.5 Business consolidation costs and other, net -- -- -- 5.4 Operating income 51.5 48.5 80.2 68.2 Other expenses (income): Interest expense 33.6 32.9 70.3 66.2 Interest and net investment income (1.1) (1.1) (2.4) (2.1) Amortization of debt issuance costs 1.2 1.8 2.8 3.8 Foreign currency losses, net 1.3 1.0 2.8 2.8 Miscellaneous, net 1.4 2.0 3.2 2.7 Other expenses, net 36.4 36.6 76.7 73.4 Income (loss) from continuing operations before income taxes 15.1 11.9 3.5 (5.2) Provision for income taxes 3.4 3.5 7.1 9.0 Income (loss) from continuing operations 11.7 8.4 (3.6) (14.2) Discontinued operations (26.9) 1.0 (31.5) (1.8) Extraordinary items -- early extinguishments of debt (13.5) (14.9) (51.7) (14.9) Net loss $(28.7) $(5.5) $(86.8) $(30.9) Basic income (loss) per common share: Income (loss) from continuing operations $0.23 $0.16 $(0.07) $(0.28) (Loss) income from discontinued operations (0.53) 0.02 (0.62) (0.03) Extraordinary items (0.26) (0.29) (1.01) (0.29) Net loss per common share $(0.56) $(0.11) $(1.70) $(0.60) Diluted income (loss) per common share: Income (loss) from continuing operations $0.22 $0.16 $(0.07) $(0.28) (Loss) income from discontinued operations (0.51) 0.02 (0.62) (0.03) Extraordinary items (0.26) (0.29) (1.01) (0.29) Net loss per common share $(0.55) $(0.11) $(1.70) $(0.60) Weighted average common shares outstanding: Basic 51,218,076 51,129,778 51,199,226 51,127,731 Dilutive 52,596,798 51,522,938 51,199,226 51,127,731 REVLON, INC. AND SUBSIDIARIES CONSOLIDATED CONDENSED BALANCE SHEETS (dollars in millions) June 30, December 31, ASSETS 1998 1997 (Unaudited) Current assets: Cash and cash equivalents $35.8 $37.4 Trade receivables, net 458.6 492.5 Inventories 290.0 260.7 Prepaid expenses and other 80.5 94.4 Total current assets 864.9 885.0 Property, plant and equipment, net 360.4 364.0 Intangible and other assets, net 559.3 507.0 Total assets $1,784.6 $1,756.0 LIABILITIES AND STOCKHOLDERS' DEFICIENCY Current liabilities: Short-term borrowings -- third parties $45.3 $42.7 Current portion of long-term debt -- third parties 205.1 5.5 Accounts payable, accrued expenses and other 458.7 534.8 Total current liabilities 709.1 583.0 Long-term debt 1,420.0 1,419.7 Other long-term liabilities 209.5 211.8 Total stockholders' deficiency (554.0) (458.5) Total liabilities and stockholders' deficiency $1,784.6 $1,756.0SOURCE Revlon, Inc.
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CONTACT:
Press: Nancy Risdon, 212-527-5791, or
Investors: Deena S. Fishman, 212-527-5230, both of Revlon
