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| Revlon Reports Second Quarter Performance |
Strategic Plan on Track
Non-Core Asset Sales Completed
Street Estimates Exceeded
NEW YORK, Aug. 2 /PRNewswire/ -- Revlon, Inc. (NYSE: REV) today announced
second quarter 2001 results. President and Chief Executive Officer Jeffrey M.
Nugent said, "Our financial results for the second quarter demonstrate
progress in every aspect of the Company's strategic plan: general and
administrative costs have been significantly reduced; manufacturing
consolidation has been substantially completed; non-core assets have been sold
providing resources for debt reduction and other key corporate purposes; new
advertising programs have been introduced and appear to be working; and in
cooperation with our trade partners, we have launched under the Revlon brand
the most successful array of new cosmetic products in the U.S. mass market."
Comparison of Ongoing Operations - Second Quarter(1),(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 second quarter of 2001 were $330.4 million
compared with $325.1 million in the second quarter of 2000. Operating income
was $18.9 million in the second quarter of 2001 compared with operating income
of $22.3 million in the second quarter of 2000.
EBITDA was $45.8 million in the second quarter of 2001 compared with
$49.2 million in the second quarter of 2000. Net loss in the second quarter
2001 was $18.6 million, or $0.36 per diluted share, beating the First Call
analyst consensus estimate of $0.38 per share, compared with a net loss of
$16.1 million, or $0.31 per diluted share, for the second quarter of 2000.
In North America, which includes the U.S. and Canada, net sales were
$227.3 million for the second quarter of 2001, compared with $213.2 million in
the second quarter of 2000, an increase of 6.6%.
International net sales were $103.1 million for the second quarter of 2001
compared with $111.9 million in the second quarter of 2000, a decrease of 7.9%
on a reported basis or 1.6% on a constant U.S. dollar basis.
Comparison of Ongoing Operations - Six Months(1),(3)
Net sales for the first six months of 2001 were $643.9 million, compared
with $668.2 million in the first six months of 2000, a decrease of 3.6%. In
North America, net sales were $445.7 million in 2001, compared with
$446.3 million in 2000. International net sales were $198.2 million in 2001,
compared with $221.9 million in 2000, a decrease of 10.7% on a reported basis
or 3.7% on a constant U.S. dollar basis.
Operating income and EBITDA in the first six months of 2001 were
$31.0 million and $80.8 million, respectively, compared with operating income
of $38.6 million and EBITDA of $92.2 million in the first six months of 2000.
Net loss was $43.7 million, or $0.85 per diluted share in the first six
months of 2001, compared with a net loss of $38.7 million, or $0.75 per
diluted share in the first six months of 2000.
Results as Reported (excluding Restructuring and Additional
Consolidation Costs) - Second Quarter(2)
Net sales in the second quarter of 2001 were $336.7 million, compared with
net sales of $339.3 million in the 2000 second quarter.
Second quarter 2001 EBITDA was $48.5 million compared with the second
quarter 2000 EBITDA of $49.9 million. Operating income was $18.4 million in
the second quarter 2001 compared with $22.3 million in the 2000 quarter. Net
loss in the second quarter 2001 was $26.2 million, or $0.51 per diluted share,
compared with a net loss of $19.5 million, or $0.38 per diluted share, in the
second quarter of 2000.
The 2000 second quarter includes operating results from the Plusbelle
business that was disposed of in May of 2000.
Results as Reported (excluding Restructuring and Additional
Consolidation Costs) - Six Months(3)
For the first six months of 2001, net sales were $660.0 million, and for
the comparable period in 2000, net sales were $788.1 million, which included
sales from the worldwide professional products and Plusbelle businesses that
were disposed of in the first half of 2000.
Also in the first six months of 2001, operating income and EBITDA were
$31.2 million and $82.0 million, respectively. In the first six months of
2000, operating income and EBITDA were $42.9 million and $101.1 million,
respectively.
EBITDA, as defined in the Company's bank credit agreement exceeded
covenant requirements.
In the first six months of 2001, net loss was $50.5 million, or $0.98 per
diluted share. For the first six months of 2000, net loss was $37.9 million,
or $0.74 per diluted share.
Additional Non-Core Asset Sales Completed
On July 16, 2001, Revlon completed the planned sale of its non-core
Colorama brand and manufacturing facility in Brazil to L'Oreal. Additionally,
on July 31, 2001, Revlon completed the sale of the subsidiary that owns and
operates its manufacturing facility in Maesteg, Wales, UK, to CW Cosmetics
Ltd., which will operate the facility and manufacture for Revlon as well as
other third parties.
As part of Revlon's Strategic Plan, through July 2001 including the above
transactions, Revlon has raised $82.0 million, net of expenses and
liabilities, from non-core asset sales ($60.0 million of which is available
for general corporate purposes and $22.0 million of which was used to
permanently pay down bank debt in July).
Progress in Strategic Plan: Summary of Key Achievements
"We are proceeding with the implementation of our strategic plan," said
Mr. Nugent, "and tangible results so far include:"
New Product Launches: According to ACNielsen, an independent research
entity, the Revlon brand leads the category in new product consumption
year-to-date by 26%. Revlon and Almay had 6 of the top 20 new products year-
to-date representing 29% of new product sales in the U.S. mass color cosmetic
market. Revlon's Skinlights still ranks as the number one new product in U.S.
mass color cosmetics. The Revlon brand leads the competition in both number
of new products -- with four of the top twenty color cosmetics launches this
year -- and in consumption dollars for new products at $26.4 million June
year-to-date. Revlon's seasonal color collections, featuring full priced
seasonal color, new and base business products, performed well.
Almay Kinetin Skin Care began shipping in May and is on counter in
approximately 25,500 doors. Though advertising only began for Almay Kinetin
in July, initial results of the launch are positive. Revlon High Dimension
Hair Color began shipping in May and distribution is building across all
targeted outlets. Advertising and retailer support for High Dimension Hair
Color begins in mid-August and initial results indicate favorable response by
consumers and retailers.
Trade Partnerships: The new trade terms are having the desired effect of
driving inefficiencies out of the system by reducing returns; we expect this
trend to continue. Revlon has streamlined its sales operation by eliminating
a level of sales management and redeploying those resources by nearly doubling
the number of merchandisers directly servicing accounts. The process of
changing the plan-o-grams was completed in the second quarter, and the largest
SKU reduction in Revlon history has been completed. Retail ordering has
stabilized since the introduction of new trade terms and we believe our
retailer relationships are healthy.
SG&A Expense Reductions: Revlon continues to decrease departmental general
and administrative expense. In the second quarter, departmental general and
administrative expenses for continuing businesses decreased by approximately
17% or $14.5 million vs. prior year.
Manufacturing Capacity: Revlon has substantially completed its global
manufacturing rationalization and consolidation plan. In the last nine
months, we have substantially completed the closing or sale of 55% of our
manufacturing and distribution facilities (representing 1,750,000 sq. feet)
including:
* Phoenix, Arizona (706,000 sq. feet) (Expected to be closed by
September 30, 2001)
* Mississauga, Canada (245,000 sq. feet) Closed
* Auckland, New Zealand (48,000 sq. feet) Closed
* Maesteg, South Wales (316,000 sq. feet) Sold
* Sao Paolo, Brazil (435,000 sq. feet) Sold
As of July 31, 2001, we have transferred to Oxford, North Carolina over
90% of the manufacturing lines formerly operated at Phoenix. We expect
Phoenix manufacturing to be fully integrated into Oxford by
September 30, 2001.
Revlon plans to maintain existing facilities representing approximately
1,435,000 square feet, of which Oxford comprises 1,012,000 square feet, and we
expect to see significantly improved capacity utilization starting in 2002.
As previously stated, we expect to achieve significant efficiencies beginning
in the third quarter resulting in annualized savings in excess of
$25.0 million beginning in the fourth quarter of 2001 related to these
consolidations.
New Advertising: Revlon is creating excitement and driving new product
sales with fresher advertising and stronger brand positioning. Revlon's new
"It's Fabulous Being a Woman" advertising campaign is being fully deployed in
television, print and on Revlon's website beginning in August. Revlon's new
High Dimension Haircolor television spot airs mid-August, and a series of new
print ads for Revlon color cosmetics will be running in the second half of
2001. The new Almay Kinetin television advertising launched in July, which
will be followed by a comprehensive print campaign in August. The Company
also has redesigned its Almay website, http://www.Almay.com and the Revlon
website re-launch is slated for later this month.
Mr. Nugent continued, "Our strategic plan is on track. We are pleased
that our new advertising and promotional efforts have been successful in
generating excitement around our new products, and that our new product
introductions have been well received by both retailers and consumers.
Additionally, consumption, as reported by ACNielsen, has remained stable for
the last four quarters, even as we implement major changes to our business.
We believe that the strong consumer purchases of Revlon products during a
period of significant competitive activity shows the continuing fundamental
strength of the Revlon brands."
"As we proceed, we expect that Revlon's margins and profitability will be
significantly enhanced. I look forward to continued positive results," said
Mr. Nugent.
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. A web site featuring current product
and promotional information can be reached at 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.
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 expectations regarding reduction of returns from
its new trade terms; (ii) the Company's expectations regarding the timing,
expected savings in the third quarter 2001 and on an annualized basis, and
increased manufacturing capacity utilization and efficiency resulting from the
Phoenix to Oxford plant consolidation and other plant consolidations; (iii)
the Company's plans with respect to advertising for the second half of 2001
including website initiatives; and (iv) the Company's expectations regarding
the enhancement of its margins and profitability and continued positive
results.
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, delays in or the inability of the Company to reduce returns;
(ii) difficulties or delays in the Phoenix to Oxford plant consolidation, less
than expected capacity utilization and efficiency or unexpected costs or less
than expected savings in the third quarter or on an annualized basis resulting
from the Phoenix to Oxford consolidation and other plant consolidations;
(iii) difficulties or delays in or the inability to introduce planned new
advertising in the second half of 2001, including the Company's website
re-launch; and (iv) difficulties or delays in or the inability of the Company
to enhance its margins and profitability and continue its positive results.
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.
(1) 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. The Corporate Investor
Relations portion of our website, http://www.revlon.com, contains
financial information for Ongoing Operations.
(2) Excludes restructuring costs of $7.9 million in 2001 and $5.1 million
in 2000, and additional consolidation costs of $22.4 million in 2001
associated with the closing of the Phoenix and Canada facilities.
(3) Excludes restructuring costs of $22.5 million in 2001 and
$14.6 million in 2000, and additional consolidation costs of
$30.5 million in 2001 associated with the closing of the Phoenix and
Canada facilities.
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,
2001 2000 2001 2000
Net sales $336.7 $339.3 $660.0 $788.1
Cost of sales 142.7 129.5 274.1 304.7
Gross profit 194.0 209.8 385.9 483.4
Selling, general and
administrative expenses 198.0 187.5 385.2 440.5
Restructuring costs 7.9 5.1 22.5 14.6
Operating (loss)income (11.9) 17.2 (21.8) 28.3
Other expenses (income):
Interest expense 35.5 33.9 70.7 73.3
Interest income (0.6) (0.4) (1.5) (0.8)
Amortization of debt
issuance costs 1.2 1.0 3.0 3.5
Foreign currency
losses (gains), net 0.2 2.6 (0.2) 2.1
Loss (gain) on sale of
product line and brand, net 7.1 3.2 7.1 (3.0)
Miscellaneous, net -- 0.4 0.8 0.9
Other expenses, net 43.4 40.7 79.9 76.0
Loss before income taxes (55.3) (23.5) (101.7) (47.7)
Provision for income taxes 1.2 1.1 1.8 4.8
Net loss $(56.5) $(24.6) $(103.5) $(52.5)
Basic and diluted loss
per common share $(1.10) $(0.48) $(2.01) $(1.02)
Weighted average number
of common shares outstanding:
Basic and diluted 51,365,935 51,359,171 51,365,935 51,301,004
REVLON, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
(dollars in millions)
June 30, December 31,
ASSETS 2001 2000
(Unaudited)
Current assets:
Cash and cash equivalents $34.4 $56.3
Trade receivables, net 205.7 220.3
Inventories 188.3 184.7
Prepaid expenses and other 40.5 66.1
Total current assets 468.9 527.4
Property, plant and equipment, net 190.5 221.7
Intangible and other assets, net 359.0 352.4
Total assets $1,018.4 $1,101.5
LIABILITIES AND STOCKHOLDERS' DEFICIENCY
Current liabilities:
Short-term borrowings - third parties $30.0 $30.7
Current portion of long-term
debt - third parties 403.1 --
Accounts payable, accrued expenses and other 398.2 396.2
Total current liabilities 831.3 426.9
Long-term debt 1,173.5 1,563.1
Other long-term liabilities 216.2 217.6
Total stockholders' deficiency (1,202.6) (1,106.1)
Total liabilities and
stockholders' deficiency $1,018.4 $1,101.5
SOURCE Revlon, Inc.
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CONTACT:
Media - Catherine Fisher, +1-212-527-5727, or
Investor Relations - Laura Kiernan, +1-212-527-5230, both of
Revlon, Inc.
