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| Revlon Reports Record Third Quarter Results Market Share Momentum Continues |
NEW YORK, Oct. 29 /PRNewswire/ -- Revlon, Inc. (NYSE: REV) today announced
record performance for the third quarter of 1997 marking the sixteenth
consecutive quarter of growth in net sales, operating income and EBITDA
compared with the corresponding quarter of the prior year.
Net sales were $623.5 million, an increase of 9.1% over the third quarter
of 1996 on a reported basis or 11.5% on a constant U.S. dollar basis.
Operating income was $71.2 million, an increase of 9.7%, after a (non-
recurring) gain of $1.0 million related to business consolidation. EBITDA
grew to $96.3 million, up 13.4% compared to last year's third quarter. Net
income increased 57.6% for the quarter to $33.1 million, or $.65 per share
compared to $21.0 million, or $.41 per share in the third quarter of 1996.
"We are pleased to report record earnings per share for the quarter," said
George Fellows, President and Chief Executive Officer. "Growth in the color
cosmetics category, increases in market share and expanded distribution in
self-select doors overseas contributed to this achievement. Both the Revlon
and Almay brands are maintaining their momentum. Revlon continues to increase
its market share as the number one U.S. mass color cosmetics brand," Fellows
stated. Strong consumer response to new innovative products has driven market
share for the Revlon brand to a record 22.3% of the total U.S. mass cosmetics
market for the quarter compared to 21.6% in the same period last year and
generated double digit retail sales growth for both the Revlon and Almay
brands compared to last year's third quarter according to A.C. Nielsen.
Fellows also noted the successful introduction of ColorStay Haircolor, which
adds a new category to Revlon's top-selling ColorStay cosmetics franchise and
brings proprietary long-wear technology to the growing at-home hair color
market. Retail sales of Revlon's hair coloring business in the U.S. have also
grown at double digit rates since the introduction of ColorStay Haircolor
compared to last year's third quarter according to A.C. Nielsen.
Downward trends in the mass fragrance industry prompted the Company to de-
emphasize new fragrance products and to continue its strategy of growing its
core cosmetics business. Accordingly, the Company realized lower than
expected sales and profits from its fragrance portfolio which will continue in
the fourth quarter. Even though consumer sell-through for the Revlon and
Almay brands has increased by double-digit growth rates, the Company's sales
to its customers have been and may continue to be impacted by retail inventory
balancing and reductions resulting from the consolidation in the chain
drugstore industry. As a result, the Ultima II distribution expansion into
select drug stores also has been slower than expected and is delayed into the
second half of 1998. However, results have been successful in those drug
store doors which have begun offering the Ultima II franchise. "Nevertheless,
our role as industry innovator will continue with exciting new product
launches in the upcoming quarters," Fellows said. Major introductions based
on breakthrough technologies are planned for two new lip products as well as
additions to the ColorStay and Almay One-Coat franchises.
U.S. Operation
In the U.S., net sales grew by 12.7% to $389.0 million for the third
quarter, compared with $345.3 million in the same period last year. Excluding
the impact of the merger of Revlon's Prestige Fragrance and Cosmetics
subsidiary with The Cosmetic Center, Inc. (Nasdaq: COSC), net sales increased
5.3% for the period. The successes of technologically-advanced products
introduced in the quarter, such as Top Speed Nail Enamel, with a proprietary
fast-drying formula, and ColorStay Haircolor, drove sales up. Stone Edge,
Revlon's fall shade promotion, Line and Shine, a lip gloss and liner in one,
the StreetWear franchise, and Almay's Amazing and One-Coat franchises also
contributed to sales gains for the quarter. Net sales comparisons were
impacted by the launch in the third quarter of 1996 of a professional product
line which was not repeated this year and by lower sales at Cosmetic Center
due to merger-related disruptions and the UPS strike in August 1997.
International Operation
The International operation's net sales increased to $234.5 million for
the third quarter, compared to $226.4 million in the third quarter of 1996, an
increase of 3.6% on a reported basis. Net sales on a constant U.S. dollar
basis and adjusted for the impact of exiting the demonstrator-assisted
distribution channel in Japan increased 11.2%. Net sales improved principally
as a result of continued progress in the Company's globalization strategy
despite less favorable than expected economic conditions overseas which
resulted in lower than expected sales. Sales of seasonal makeup shade
statements, the continued success of the ColorStay Collection and the opening
of new doors in markets throughout the world had a positive impact on
international business. New products such as ColorStay Haircolor and
StreetWear were introduced in select international markets during the quarter.
Operating Income Up, S,G&A Reduced
Operating income was $71.2 million, an increase of 9.7% over the third
quarter of 1996. Selling, general and administrative expenses (other than
advertising and consumer promotion expense which increased 8.1% for the
quarter) as a percentage of sales decreased from 37.9% in the third quarter of
1996 to 37.2% in the third quarter of 1997.
Net Income
Net income for the quarter was $33.1 million, or $.65 per share. Income
taxes were reduced, reflecting favorable 1997 (non-recurring) international
tax benefits and lower than expected foreign income. In the third quarter of
1996, net income was $21.0 million, or $.41 per share. Per share amounts are
based upon the weighted average common shares outstanding for the period.
Nine Months Results
Net sales for the nine months increased 8.6% to $1.689 billion or 10.8% on
a constant U.S. dollar basis. Operating income rose 13.5% to $140.6 million
before a (non-recurring) charge of $8.4 million related to business
consolidation costs and other, net. EBITDA increased 15.6% to $212.8 million
before the (non-recurring) charge. Net income for the nine months of 1997 was
$17.1 million, or $.33 per share, before an extraordinary charge for early
extinguishment of debt of $14.9 million, or $.29 per share. A gain of $6.0
million was recognized in the second quarter of 1997 as a result of the
Cosmetic Center merger. The net loss for the nine months of 1996 was $6.5
million, or $.13 per share, before an extraordinary charge for early
extinguishment of debt of $6.6 million, or $.14 per share.
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), Age
Defying, Almay(R), Ultima II(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 plans for the launch of new products and the planned expanded
distribution of Ultima II. In addition to the factors that are described in
the Company's SEC filings including its quarterly reports on Form 10-Q, the
following factors could cause actual results to differ materially from those
expressed in the forward looking statements: difficulties or delays in
introducing new products and in expanding Ultima II into drug stores. 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 Nine Months Ended
September 30, September 30,
1997 1996 1997 1996
Net Sales $623.5 $571.7 $1,688.8 $1,554.8
Cost of sales 217.1 193.3 585.3 517.2
Gross profit 406.4 378.4 1,103.5 1,037.6
Selling, general and
administrative
expenses 336.2 313.5 962.9 913.7
Business consolidation
costs and other, net (1.0) -- 8.4 --
Operating income 71.2 64.9 132.2 123.9
Other expenses (income):
Interest expense 33.8 34.0 100.7 100.0
Interest and net
investment income (0.7) (0.3) (2.2) (2.3)
Gain on sale of
subsidiary stock -- -- (6.0) --
Amortization of debt
issuance costs 1.5 2.0 5.3 6.5
Foreign currency losses,
net 2.4 1.9 5.2 5.7
Miscellaneous, net 0.9 0.5 2.9 1.8
Other expenses, net 37.9 38.1 105.9 111.7
Income before income
taxes 33.3 26.8 26.3 12.2
Provision for income
taxes 0.2 5.8 9.2 18.7
Income (loss) before
extraordinary item 33.1 21.0 17.1 (6.5)
Extraordinary item -
early extinguishment
of debt -- -- (14.9) (6.6)
Net income (loss) $33.1 $21.0 $2.2 $(13.1)
Income (loss) per common share:
Income (loss) before
extraordinary item $0.65 $0.41 $0.33 $(0.13)
Extraordinary item -- -- (0.29) (0.14)
Net income (loss) $0.65 $0.41 $0.04 $(0.27)
Weighted average
common shares
outstanding 51,133,791 51,125,000 51,129,792 49,208,333
* The results of The Cosmetic Center, Inc. for the three months ended
September 30, 1997 and 1996 are as follows: Net sales of $42.5 and
$20.0, cost of sales of $26.6 and $9.7, S,G&A of $16.8 and $9.4 and
operating (loss) income of ($0.9) and $0.9. The results of The
Cosmetic Center, Inc. for the nine months ended September 30, 1997 and
1996 are as follows: Net sales of $89.0 and $49.0, cost of sales of
$53.6 and $24.4, S,G&A of $41.0 and $27.3 and operating losses of $9.6
and $2.7, the 1997 period includes business consolidation costs of
$4.0.
REVLON, INC. AND SUBSIDIARIES
Consolidated Condensed Balance Sheets
(dollars in millions)
September 30, December 31,
ASSETS 1997 1996
(Unaudited)
Current assets:
Cash and cash equivalents $39.7 $38.6
Trade receivables, net 469.4 426.8
Inventories 379.1 281.1
Prepaid expenses and other 76.0 74.5
Total current assets 964.2 821.0
Property, plant and
equipment, net 384.9 381.1
Intangible and other
assets, net 481.4 419.8
Total assets $1,830.5 $1,621.9
LIABILITIES AND STOCKHOLDERS' DEFICIENCY
Current liabilities:
Short-term borrowings -
third parties $28.3 $27.1
Current portion of
long-term debt -
third parties 5.8 8.8
Accounts payable, accrued
expenses and other 509.5 528.1
Total current liabilities 543.6 564.0
Long-term debt 1,568.8 1,352.2
Other long-term liabilities 224.9 202.8
Total stockholders' deficiency (506.8) (497.1)
Total liabilities and
stockholders' deficiency $1,830.5 $1,621.9
SOURCE Revlon, Inc.
back to topCONTACT:
Nancy Risdon, press, 212-527-5791, or Deena
S. Fishman, investor relations, 212-527-5230, both of Revlon
