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| Revlon Reports Third Quarter Performance |
Street Estimates Exceeded
Strategic Plan Continues on Track
Results from Ongoing Operations Continue to Improve
NEW YORK, Nov. 1 /PRNewswire/ -- Revlon, Inc. (NYSE: REV) today announced
third quarter 2001 results. President and Chief Executive Officer Jeffrey M.
Nugent said, "Our financial results for the third quarter continue to
demonstrate progress in the Company's strategic plan: we have successfully
completed our cost reduction initiatives and manufacturing consolidation,
non-core assets have been sold providing resources for key corporate purposes,
and our new products are performing well. We have realigned much of Revlon's
infrastructure creating a solid platform from which to grow. Clearly, Revlon
is a much stronger company today than it was a year ago."
Comparison of Ongoing Operations - Third 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 third quarter of 2001 were $326.9 million
compared with $333.7 million in the third quarter of 2000. Operating income
was $37.3 million in the third quarter of 2001 compared with operating income
of $23.3 million in the third quarter of 2000.
EBITDA was $61.0 million in the third quarter of 2001 compared with
$49.6 million in the third quarter of 2000. Net loss in the third quarter
2001 was $2.2 million, or $0.04 per diluted share, beating the First Call
analyst consensus estimate of a loss of $0.16 per diluted share, compared with
a net loss of $13.1 million, or $0.25 per diluted share, for the third quarter
of 2000.
In North America, which includes the U.S. and Canada, net sales were
$232.7 million for the third quarter of 2001, compared with $224.0 million in
the third quarter of 2000, an increase of 3.9%.
International net sales were $94.2 million for the third quarter of 2001
compared with $109.7 million in the third quarter of 2000, a decrease of 14.1%
on a reported basis or 8.2% on a constant U.S. dollar basis, primarily due to
difficult conditions in Latin America.
Comparison of Ongoing Operations - Nine Months (3, 4)
Net sales for the first nine months of 2001 were $972.6 million, compared
with $1,003.3 million in the first nine months of 2000, a decrease of 3.1%.
In North America, net sales were $680.2 million in 2001, compared with
$671.7 million in 2000, an increase of 1.3%. International net sales were
$292.4 million in 2001, compared with $331.6 million in 2000, a decrease of
11.8% slightly over half of which was due to currency fluctuations. The
remaining decrease in international is primarily due to competitive pressures
worldwide and difficult conditions in Latin America.
Operating income and EBITDA in the first nine months of 2001 were
$69.3 million and $142.8 million, respectively, compared with operating income
of $62.1 million and EBITDA of $142.0 million in the first nine months of
2000.
Net loss was $44.9 million, or $0.86 per diluted share in the first nine
months of 2001, compared with a net loss of $51.6 million, or $0.99 per
diluted share in the first nine months of 2000.
Results as Reported (excluding Restructuring and Additional Consolidation
Costs) - Third Quarter (2)
Net sales in the third quarter of 2001 were $327.2 million, compared with
net sales of $344.8 million in the 2000 third quarter.
Third quarter 2001 EBITDA was $58.2 million compared with the third
quarter 2000 EBITDA of $50.7 million. Operating income was $34.5 million in
the third quarter 2001 compared with $23.8 million in the 2000 quarter. The
third quarter 2001 includes an operating loss of $2.6 million from the
Colorama business that was disposed of in July of 2001, compared with
break-even results in the third quarter 2000. Net loss in the third quarter
2001 was $12.9 million, or $0.25 per diluted share, compared with a net loss
of $12.4 million, or $0.24 per diluted share, in the third quarter of 2000.
Results as Reported (excluding Restructuring and Additional Consolidation
Costs) - Nine Months (4)
For the first nine months of 2001, net sales were $989.0 million, and for
the comparable period in 2000, net sales were $1,134.2 million, which included
sales from the worldwide professional products and Plusbelle businesses that
were disposed of in the first half of 2000, and the Colorama business which
was disposed of in July 2001.
Also in the first nine months of 2001, operating income and EBITDA were
$66.7 million and $141.2 million, respectively. In the first nine months of
2000, operating income and EBITDA were $66.9 million and $152.0 million,
respectively.
EBITDA, as defined in the company's bank credit agreement, exceeded
covenant requirements.
In the first nine months of 2001, net loss was $62.4 million, or $1.20 per
diluted share. For the first nine months of 2000, net loss was $50.1 million,
or $0.96 per diluted share.
Progress in Strategic Plan: Summary of Key Achievements
Revlon reported progress against the key elements of its strategic plan as
follows:
New Product Launches(5): According to ACNielsen, the Revlon brand leads
the category in Top 20 new product consumption year-to-date by approximately
30%.
Revlon Skinlights Face Illuminators continues to be the Company's leading
new product in 2001 with over $20 million in U.S. consumption through
September in part by bringing women who did not previously use foundation into
the category.
According to ACNielsen, in the third quarter 2001, consumption of Almay
Kinetin Skincare ranked among the top 3 new facial skincare products
introduced in 2001 for all outlets. Based on early positive sales momentum, we
plan to increase advertising and promotional support behind Kinetin Skincare
for the fourth quarter.
Revlon High Dimension Hair Color, with its break-through 10-minute
technology, was a leading new hair color launch in doors where sold.
According to a leading retailer's consumer study, High Dimension Hair Color
has the highest level of repeat purchase of any of the four new hair color
brands launched this quarter. Due to the strong consumer response, we plan to
increase fourth quarter advertising spending on High Dimension, and the
Company intends to aggressively expand distribution in early 2002.
The 2002 new product lineup is robust and includes a new collection of
Revlon Skinlights products among several other new items, which, for
competitive reasons will be announced at a later date.
Trade Partnerships: The new trade terms are having the desired effect of
driving inefficiencies out of the system by reducing returns and we expect
this trend to continue. We are focusing our trade relations on continually
improving in-store merchandising and generating consumption at the point of
sale.
SG&A Expense Reductions: Revlon has completed the realignment of its
departmental general and administrative expense. In the third quarter,
departmental general and administrative expenses for ongoing operations
decreased by approximately 18.4% or $15.5 million vs. prior year. The Company
remains focused on maintaining a cost-efficient general and administrative
base.
Manufacturing Plant Utilization: Revlon completed its global manufacturing
rationalization and consolidation plan in the third quarter 2001. In the last
twelve months, Revlon has closed or sold 55% of its manufacturing and
distribution facilities (representing 1,750,000 sq. feet). Phoenix
manufacturing has been fully integrated into our primary manufacturing
facility in Oxford, NC. Plant utilization at Oxford has increased from
approximately 47% prior to the consolidation to approximately 81%.
Beginning in the fourth quarter of 2001, the Company expects to achieve
efficiencies resulting in annualized savings in excess of $25.0 million
related to these consolidations.
New Advertising: During the third quarter, the Revlon brand launched new
TV and print advertising for Revlon High Dimension Haircolor under Revlon's
new "It's Fabulous Being a Woman" campaign. Also in the third quarter, the
Almay brand launched new TV and print campaigns for Almay Kinetin Skin Care,
and Almay One Coat Mascara.
Revlon is using advanced econometric modeling to optimize marketing spend,
and we expect that this will significantly improve the effectiveness of our
future advertising and marketing activities.
Results From Ongoing Operations Continue to Improve (2,3,4)
Revlon's four quarter rolling EBITDA has improved from a negative
$70.6 million at the end of 1999 to a positive $185.2 million at the end of
the third quarter 2001, an improvement of $255.8 million. Additionally,
Revlon's four quarter rolling EPS has improved from a loss of $6.07 per share
at the end of 1999 to a loss of $1.41 per share at the end of the third
quarter 2001, an improvement of $4.66 per share.
Mr. Nugent continued, "As I look at the achievements of the past several
months, I am proud that we have come so far in the execution of our strategic
plan. Although it is difficult to make predictions in such an uncertain
economic environment, I believe that with our continued focus, Revlon will be
a much stronger and healthier company this time next year."
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.
(1) Excludes operating results and loss on sale of Colorama, and the loss
on the sale of the Company's Maesteg, Wales operations, both of which were
sold in July 2001. Includes the operating results for the Charles of the Ritz
brand for all periods presented, which was acquired from an affiliate in
September 2001. The Corporate Investor Relations portion of our website,
http://www.revlon.com, contains financial information for Ongoing Operations.
(2) Excludes restructuring costs of $3.0 million in the third quarter 2001
and $13.7 million in the third quarter 2000, and additional consolidation
costs of $7.0 million in the third quarter 2001 primarily associated with the
closing of the Phoenix facility.
(3) 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, and the loss on the sale of the Company's Maesteg, Wales
operations, which were sold in July 2001. Includes the operating results for
the Charles of the Ritz brand for all periods presented, which was acquired
from an affiliate in September 2001. The Corporate Investor Relations portion
of our website, http://www.revlon.com, contains financial information for
Ongoing Operations.
(4) Excludes restructuring costs of $25.5 million for the first nine
months of 2001 and $28.3 million for the same period in 2000, and additional
consolidation costs of $37.5 million in the first nine months of 2001
associated with the closing of the Phoenix and Canada facilities.
(5) ACNielsen (an independent research entity) data for September quarter
to date and year to date excludes Wal-Mart as Wal-Mart no longer provides its
data to ACNielsen or its competitors. ACNielsen October share data is
scheduled to be released in mid-November and will include the share results
for Wal-Mart using data from its statistical household panel.
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 the Company's expectations regarding: (i) the Company's future
growth and continued positive results; (ii) the success of new products in
2002, including expanded distribution of Revlon High Dimension Hair Color and
the launch of new Revlon Skinlights products; (iii) the continued reduction of
returns from the Company's new trade terms; (iv) generating growth in
consumption at the point of sale from improved in-store merchandising; (v) the
Company's ability to maintain a cost-effective general and administrative
base; (vi) the timing and expected savings from plant consolidations; (vii)
the Company's ability to use econometric modeling to improve the effectiveness
of advertising and marketing expenditures; and (viii) advertising plans for
2002.
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
difficulties, delays in or the inability of the Company to: (i) achieve future
growth and continued positive results; (ii) introduce new products in 2002;
(iii) reduce returns; (iv) introduce improved in-store merchandising and
achieve consumption growth; (v) reduce general and administrative expenses;
(vi) achieve cost savings from plant consolidations; (vii) use econometric
modeling to improve the effectiveness of advertising and marketing
expenditures; and (viii) introduce planned new advertising in 2002.
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 Nine Months Ended
September 30, September 30,
2001 2000 2001 2000
Net sales $327.2 $344.8 $989.0 $1,134.2
Cost of sales 129.8 128.0 404.4 433.2
Gross profit 197.4 216.8 584.6 701.0
Selling, general and
administrative expenses 169.9 193.0 555.4 634.1
Restructuring costs 3.0 13.7 25.5 28.3
Operating income 24.5 10.1 3.7 38.6
Other expenses (income):
Interest expense 34.1 35.6 104.8 108.9
Interest income (0.5) (0.6) (2.0) (1.4)
Amortization of debt
issuance costs 1.6 1.0 4.6 4.5
Foreign currency
losses (gains), net 2.7 (1.1) 2.5 1.0
Loss (gain) on sale of
product line and
brand, net 7.9 -- 15.0 (3.0)
Miscellaneous, net 0.1 (0.9) 0.9 --
Other expenses, net 45.9 34.0 125.8 110.0
Loss before income taxes (21.4) (23.9) (122.1) (71.4)
Provision for income
taxes 1.5 2.2 3.3 7.0
Net loss $(22.9) $(26.1) $(125.4) $(78.4)
Basic and diluted loss
per common share $(0.44) $(0.50) $(2.40) $(1.50)
Weighted average number
of common shares
outstanding:
Basic and diluted 52,199,355 52,199,235 52,199,275 52,156,106
REVLON, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
(dollars in millions)
September 30, December 31,
ASSETS 2001 2000
(Unaudited)
Current assets:
Cash and cash equivalents $37.2 $56.3
Trade receivables, net 203.5 220.5
Inventories 186.3 184.8
Prepaid expenses and other 41.5 66.1
Total current assets 468.5 527.7
Property, plant and equipment, net 151.2 221.7
Intangible and other assets, net 345.8 352.4
Total assets $965.5 $1,101.8
LIABILITIES AND STOCKHOLDERS'
DEFICIENCY
Current liabilities:
Short-term borrowings - third
parties $30.3 $30.7
Current portion of long-term
debt - third parties 373.4 --
Accounts payable, accrued
expenses and other 377.4 397.0
Total current liabilities 781.1 427.7
Long-term debt 1,173.6 1,563.1
Other long-term liabilities 216.7 217.7
Total stockholders' deficiency (1,205.9) (1,106.7)
Total liabilities and
stockholders' deficiency $965.5 $1,101.8
SOURCE Revlon, Inc.
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CONTACT:
Investor Relations - Laura Kiernan,
+1-212-527-5230, or Media - Catherine Fisher, +1-212-527-5727,
both for Revlon
