Strong Net Sales Growth in Revlon and
Elizabeth Arden Segments
Revlon, Inc. (NYSE:REV) today announced its results for the
quarter ended March 31, 2019.
Quarter ended March 31, 2019 summary developments:1
- As Reported net sales were $553.2
million in the first quarter of 2019, compared to $560.7 million
during the prior-year period, a decrease of 1.3% versus the
prior-year period. On a constant currency basis, net sales
increased $13.0 million or 2.3% versus the prior-year period, with
both Revlon and Elizabeth Arden segments delivering strong net
sales growth versus the prior-year period, partially offset by
declines in the Portfolio and Fragrances segments.
- As Reported operating loss was $23.3
million in the first quarter of 2019, compared to a $61.7 million
loss during the prior-year period, or a 62.2% improvement. The
improvement in operating loss was driven by lower selling, general
and administrative expenses, mainly attributed to lower overhead
costs and planned lower brand support in the quarter to align
marketing initiatives with in-store customer resets and new product
launches, as well as lower acquisition and integration costs.
- As Reported net loss was $75.1 million
in the first quarter of 2019 versus a $90.3 million net loss in the
prior year-period, or a 16.8% improvement. The improvement in net
loss was driven by the lower operating loss described above,
partially offset by higher interest expense.
- Adjusted EBITDA(a) was $38.8 million in
the first quarter of 2019, compared to $4.2 million during the
prior year period or an improvement of $34.6 million, primarily
driven by the factors described above.
"We are very pleased with the continued momentum in our business
during the first quarter of 2019 driven by strong growth in Revlon
and Elizabeth Arden. We also remain encouraged by the positive
consumer response to our first half 2019 new product introductions.
Our strategic focus areas of e-commerce, Elizabeth Arden skincare,
China and Travel Retail continued to perform exceedingly well, and
as a result of improved operational performance, we achieved our
third consecutive quarter of year-over-year Adjusted EBITDA
growth," said Debra Perelman, President and CEO of Revlon.
1 The results discussed include the following measures: U.S.
GAAP (“As Reported”); and non-GAAP (“Adjusted”), which excludes
certain Non-Operating Items and EBITDA Exclusions (as defined in
Footnote (a)) from As Reported results. See footnote (a) for
further discussion of the Company’s Adjusted measures.
Reconciliations of As Reported results to Adjusted results are
provided as an attachment to this release. In addition, where
indicated, the Company analyzes and presents its results excluding
the impact of foreign currency translation (“XFX”). Unless
otherwise noted, the discussion is presented on an As Reported
basis.
First Quarter 2019
Results
Total Company Results
In calculating Adjusted results, adjustments were made for the
Non-Operating Items, and the EBITDA Exclusions in the case of
Adjusted EBITDA, in each case as described in footnote (a).
(USD millions, except per share data) Three
Months Ended March 31, 2019 2018
AsReported
Adjusted(*)
AsReported
Adjusted(*)
AsReported
Adjusted(*)
% Change % Change Net Sales $ 553.2 $ 553.2 $ 560.7 $ 560.7
(1.3
)%
(1.3 )% Gross Profit 315.4 315.4 318.1 329.2 (0.8 )% (4.2 )% Gross
Margin 57.0 % 57.0 % 56.7 % 58.7 % 30bps -170bps Operating Loss $
(23.3 ) $ (8.6 ) $ (61.7 ) $ (42.2 ) 62.2 % 79.6 % Net Loss (75.1 )
(63.6 ) (90.3 ) (75.3 ) 16.8 % 15.5 % Adjusted EBITDA 38.8 4.2 N.M.
Diluted Loss per Common Share $ (1.42 )
$ (1.20 ) $ (1.71 ) $ (1.43 ) 17.0 %
16.1 %
(*)
Refer to footnote (a) to this Earnings
Release for a discussion and reconciliation of our non-GAAP
measures, including Adjusted Net Sales, Adjusted Gross Profit,
Adjusted Gross Profit Margin, Adjusted Operating Income, Adjusted
EBITDA, Adjusted Net Income (Loss) and Adjusted Diluted Loss per
Common Share.
Segment
Results
The Company operates in four reporting segments: Revlon;
Elizabeth Arden; Portfolio; and Fragrances:
Revlon - The Revlon segment is
comprised of the Company's flagship Revlon brands. Revlon segment
products are primarily marketed, distributed and sold in the mass
retail channel, large volume retailers, chain drug and food stores,
chemist shops, hypermarkets, general merchandise stores, e-commerce
sites, television shopping, department stores, professional hair
and nail salons, one-stop shopping beauty retailers and specialty
cosmetic stores in the U.S. and internationally under brands such
as Revlon in color cosmetics; Revlon ColorSilk and
Revlon Professional in hair color; and Revlon in
beauty tools.
Elizabeth Arden - The Elizabeth Arden
segment is comprised of the Company's Elizabeth Arden branded
products. The Elizabeth Arden segment markets, distributes and
sells fragrances, skin care and color cosmetics primarily to
prestige retailers, department and specialty stores, perfumeries,
boutiques, e-commerce sites, the mass retail channel, travel
retailers and distributors, as well as direct sales to consumers
via its Elizabeth Arden branded retail stores and
elizabetharden.com e-commerce websites, in the U.S. and
internationally, under brands such as Elizabeth Arden Ceramide,
Prevage, Eight Hour, SUPERSTART, Visible Difference and Skin
Illuminating in the Elizabeth Arden skin care brands; and
Elizabeth Arden White Tea, Elizabeth Arden Red Door, Elizabeth
Arden 5th Avenue and Elizabeth Arden Green Tea in
Elizabeth Arden fragrances.
Portfolio - The Company’s Portfolio
segment markets, distributes and sells a comprehensive line of
premium, specialty and mass products primarily to the mass retail
channel, hair and nail salons and professional salon distributors
in the U.S. and internationally and large volume retailers,
specialty and department stores under brands such as Almay
and SinfulColors in color cosmetics; American Crew in
men’s grooming products (which are also sold direct-to-consumer on
its americancrew.com website); CND in nail polishes, gel
nail color and nail enhancements; Mitchum in anti-perspirant
deodorants; Cutex nail care products; and Pure Ice in
nail polishes. The Portfolio segment also includes a multi-cultural
hair care line consisting of Creme of Nature hair care
products, which are sold in both professional salons and in large
volume retailers and other retailers, primarily in the U.S.; and a
body care line under the Natural Honey brand and a hair
color line under the Llongueras brand (licensed from a third
party) that are both sold in the mass retail channel, large volume
retailers and other retailers, primarily in Spain.
Fragrances - The Fragrances segment
includes the development, marketing and distribution of certain
owned and licensed fragrances, as well as the distribution of
prestige fragrance brands owned by third parties. These products
are typically sold to retailers in the U.S. and internationally,
including prestige retailers, specialty stores, e-commerce sites,
the mass retail channel, travel retailers and other international
retailers. The owned and licensed fragrances include brands such as
Juicy Couture (which are also sold direct-to-consumer on its
juicycouturebeauty.com website), Britney Spears, Elizabeth
Taylor, Curve, John Varvatos, Christina Aguilera, Giorgio
Beverly Hills, Ed Hardy, Charlie, Lucky Brand,
Paul Sebastian, Alfred Sung, Jennifer Aniston,
Mariah Carey, Halston, Geoffrey Beene, La
Perla, White Shoulders, AllSaints and Wildfox.
(USD millions) Three Months
Ended March 31, Net Sales As Reported As Reported 2019
2018 % Change
XFX% Change
Revlon $ 247.3 $ 229.1 7.9 % 11.7 % Elizabeth Arden 111.4
105.7 5.4 % 9.5 % Portfolio 117.2 134.5
(12.9)
%
(8.9)
%
Fragrances 77.3 91.4
(15.4)
%
(13.0)
%
Total $ 553.2 $ 560.7
(1.3)
%
2.3 % Three Months Ended March 31, Segment Profit As
Reported As Reported 2019 2018 % Change XFX% Change Revlon $
25.6 $ 2.3 N.M. N.M. Elizabeth Arden 1.9 1.5 26.7 % 66.7 %
Portfolio 4.5 (2.8 ) N.M. N.M. Fragrances 6.8 3.2
112.5 % 115.6 % Total $ 38.8 $
4.2 N.M. N.M.
Revlon Segment
Revlon segment net sales in the first quarter of 2019 were
$247.3 million, a 7.9% (or 11.7% XFX) increase compared to the
prior-year period, driven by higher net sales of Revlon color
cosmetics and higher net sales of Revlon-branded professional and
hair care product lines.
Revlon segment profit in the first quarter of 2019 was $25.6
million, compared to $2.3 million in the prior-year period,
primarily driven by the segment's net sales growth and lower brand
support expenses.
Elizabeth Arden Segment
Elizabeth Arden segment net sales in the first quarter of 2019
were $111.4 million, a 5.4% (or 9.5% XFX) increase compared to the
prior-year period, driven by higher net sales of Elizabeth Arden
skin care products, including Ceramide and Prevage, as well as
Elizabeth Arden-branded fragrances.
Elizabeth Arden segment profit in the first quarter of 2019 was
$1.9 million, compared to $1.5 million in the prior-year period,
primarily due to the segment's higher net sales, partially offset
by the segment's lower gross profit margin and increased
distribution expenses.
Portfolio Segment
Portfolio segment net sales of $117.2 million in the first
quarter of 2019 decreased by 12.9% (or 8.9% XFX) compared to the
prior-year period, primarily driven by the segment's lower net
sales of CND nail products, local and regional brands, as well as
SinfulColors color cosmetics, partially offset by higher net sales
of American Crew men's grooming products and Mitchum
anti-perspirant deodorants.
Portfolio segment profit in the first quarter of 2019 was $4.5
million, compared to a segment loss of $2.8 million in the
prior-year period, primarily as a result of lower brand support and
distribution expenses, partially offset by the segment's lower net
sales.
Fragrances Segment
Fragrances segment net sales of $77.3 million in the first
quarter of 2019 decreased by 15.4% (or 13.0% XFX) compared to the
prior-year period, driven primarily by the segment's lower net
sales in the mass retail channel and due in part to retail store
closures, partially offset by new product launches.
Fragrances segment profit in the first quarter of 2019 was $6.8
million, a $3.6 million increase compared to prior-year period,
primarily as a result of lower overhead expenses, brand support and
distribution costs, partially offset by the segment's lower net
sales.
Geographic Net Sales
Overall, As Reported net sales decreased by 1.3%, as detailed
below by segment for the Company's North America and International
Regions.
(USD millions) Three Months Ended March 31,
2019As Reported
2018As Reported
As Reported% Change
As ReportedXFX% Change
Net Sales: Revlon North America $ 133.2 $ 116.2 14.6 % 15.0 %
International 114.1 112.9 1.1 % 8.4 % Elizabeth Arden North America
$ 28.2 $ 28.9
(2.4)
%
(1.4)
%
International 83.2 76.8 8.3 % 13.5 % Portfolio North America $ 70.1
$ 81.9
(14.4)
%
(14.0)
%
International 47.1 52.6
(10.5)
%
(1.0)
Fragrances North America $ 47.2 $ 56.4
(16.3)
%
(16.1)
%
International 30.1 35.0
(14.0)
%
(8.0)
%
Total Net Sales $ 553.2 $ 560.7
(1.3)
%
2.3 %
Total Net Sales Summary
North America $ 278.7 $ 283.4
(1.7)
%
(1.4)
%
International 274.5 277.3
(1.0)
%
6.0 %
Revlon Segment
In North America, Revlon segment net sales of $133.2 million in
the first quarter of 2019 increased by 14.6% (or 15.0% XFX)
compared to the prior-year period, largely driven by higher net
sales of Revlon color cosmetics and higher net sales of
Revlon-branded hair care products and Revlon ColorSilk hair color
products.
In International, Revlon segment net sales of $114.1 million in
the first quarter of 2019 increased by 1.1% (or 8.4% XFX) compared
to the prior-year period, driven primarily by the segment's higher
net sales of Revlon color cosmetics and Revlon-branded professional
hair care products following new product launches in Europe.
Elizabeth Arden Segment
In North America, Elizabeth Arden segment net sales were $28.2
million in the first quarter of 2019, a decrease of 2.4% (or 1.4%
XFX) compared to the prior-year period, primarily due to decreased
net sales resulting from certain retail store closures, partially
offset by higher net sales of skin care products.
In International, Elizabeth Arden segment net sales of $83.2
million in the first quarter of 2019 increased by 8.3% (or 13.5%
XFX) compared to the prior-year period, primarily driven by higher
net sales of skin care products within the Company's Travel Retail
business and the Asia region, particularly in China.
Portfolio Segment
In North America, Portfolio segment net sales of $70.1 million
in the first quarter of 2019 decreased by 14.4% (or 14.0% XFX)
compared to the prior-year period, primarily driven by lower net
sales of CND and SinfulColors nail products, partially offset by
higher net sales of American Crew men's grooming products.
In International, Portfolio segment net sales of $47.1 million
in the first quarter of 2019 decreased by 10.5% (or 1.0% XFX)
compared to the prior-year period, primarily driven by lower net
sales of local and regional brands, partially offset by higher net
sales of Mitchum anti-perspirant deodorants and Cutex nail care
products.
Fragrances Segment
In North America, Fragrances segment net sales of $47.2 million
in the first quarter of 2019 decreased by 16.3% (or 16.1% XFX)
compared to the prior-year period, primarily driven by weakness in
the overall mass fragrance category in the U.S., as well as lower
net sales due to certain retail store closures in the prestige
channel.
In International, Fragrances segment net sales of $30.1 million
in the first quarter of 2019 decreased by 14.0% (or 8.0% XFX)
compared to the prior-year period, primarily driven by the
segment's lower net sales in the mass retail channel.
Cash Flow
Net cash used in operating activities in the first quarter of
2019 was $28.4 million, compared to $97.3 million in the prior-year
period driven by a lower net loss and favorable working capital
changes. Free cash flow(a) used in the first quarter of 2019 was
$34.2 million, compared to $111.0 million used in the prior-year
period, driven by higher operating cash flow and lower capital
expenditures as compared to the prior-year period.
Liquidity Update
As of March 31, 2019, the Company had approximately $103.5
million of available liquidity, consisting of $68.3 million of
unrestricted cash and cash equivalents, as well as $41.8 million in
available borrowing capacity under the Amended 2016 Revolving
Credit Facility (which had $375.7 million drawn as of such date),
less float of $6.6 million.
First Quarter 2019
Results Conference Call
The Company will host a conference call with members of the
investment community today, May 9, 2019, at 8:30 A.M. EDT to
discuss its first quarter 2019 financial results. Access to the
call is available to the public at www.revloninc.com.
Footnotes to Press
Release
(a) Non-GAAP Financial
Measures: EBITDA; Adjusted EBITDA; Adjusted net sales;
Adjusted operating loss/income; Adjusted net income/loss; Adjusted
gross profit; Adjusted gross profit margin; Adjusted diluted loss
per common share and free cash flow (together, the “Non-GAAP
Measures”) are non-GAAP financial measures. See the reconciliations
of such Non-GAAP Measures to their most directly comparable GAAP
measures in the accompanying financial tables, to the extent not
otherwise directly reconciled in the Company’s financial
results.
The Company defines EBITDA as income from continuing operations
before interest, taxes, depreciation, amortization, gains/losses on
foreign currency fluctuations, gains/losses on the early
extinguishment of debt and miscellaneous expenses (the foregoing
being the “EBITDA Exclusions”). The Company presents Adjusted
EBITDA to exclude the EBITDA Exclusions, as well as the impact of
non-cash stock compensation expense and certain other non-operating
items that are not directly attributable to the Company's
underlying operating performance (the “Non-Operating Items”). The
following table identifies the Non-Operating Items excluded in the
presentation of Adjusted EBITDA for all periods:
(USD millions)
Q1 2019 Q1 2018 Income
Adjustments to EBITDA
Non-Operating Items: Non-cash stock compensation expense $ 0.4 $
7.7 Restructuring and related charges 12.1 5.5 Acquisition and
integration costs 0.6 4.0 Oxford ERP system disruption-related
charges — 10.0 Financial control remediation actions and related
charges 2.0 —
Adjusted net loss and adjusted diluted loss per common share
exclude the after-tax impact of the Non-Operating Items from As
Reported net loss.
The Company excludes the EBITDA Exclusions and Non-Operating
Items, as applicable, in calculating the Non-GAAP Measures because
the Company's management believes that some of these items may not
occur in certain periods, the amounts recognized can vary
significantly from period to period and/or these items do not
facilitate an understanding of the Company's underlying operating
performance.
Free cash flow is defined as net cash provided by / used in
operating activities, less capital expenditures for property, plant
and equipment. Free cash flow excludes proceeds on sale of
discontinued operations. Free cash flow does not represent the
residual cash flow available for discretionary expenditures, as it
excludes certain expenditures such as mandatory debt service
requirements, which for the Company are significant.
The Company's management uses the Non-GAAP Measures as operating
performance measures, and in the case of free cash flow, as a
liquidity measure (in conjunction with GAAP financial measures), as
an integral part of its reporting and planning processes and to,
among other things: (i) monitor and evaluate the performance of the
Company's business operations, financial performance and overall
liquidity; (ii) facilitate management's internal comparisons of the
Company's historical operating performance of its business
operations; (iii) facilitate management's external comparisons of
the results of its overall business to the historical operating
performance of other companies that may have different capital
structures and debt levels; (iv) review and assess the operating
performance of the Company's management team and, together with
other operational objectives, as a measure in evaluating employee
compensation, including bonuses and other incentive compensation;
(v) analyze and evaluate financial and strategic planning decisions
regarding future operating investments; and (vi) plan for and
prepare future annual operating budgets and determine appropriate
levels of operating investments.
Management believes that the Non-GAAP Measures are useful to
investors to provide them with disclosures of the Company's
operating results on the same basis as that used by management.
Management believes that the Non-GAAP Measures provide useful
information to investors about the performance of the Company's
overall business because such measures eliminate the effects of
certain charges that are not directly attributable to the Company's
underlying operating performance. Additionally, management believes
that providing the Non-GAAP Measures enhances the comparability for
investors in assessing the Company’s financial reporting.
Management believes that free cash flow is useful for investors
because it provides them with an important perspective on the cash
available for debt service and other strategic measures, after
making necessary capital investments in property and equipment to
support the Company's ongoing business operations, and provides
them with the same measures that management uses as the basis for
making resource allocation decisions.
Accordingly, the Company believes that the presentation of the
Non-GAAP Measures, when used in conjunction with GAAP financial
measures, are useful financial analytical measures that are used by
management, as described above, and therefore can assist investors
in assessing the Company's financial condition, operating
performance and underlying strength. The Non-GAAP Measures should
not be considered in isolation or as a substitute for their
respective most directly comparable As Reported financial measures
prepared in accordance with GAAP, such as net income/loss,
operating income/loss, diluted earnings/loss per share or net cash
provided by (used in) operating activities. Other companies may
define such non-GAAP measures differently. Also, while EBITDA and
Adjusted EBITDA, as used in this release, are defined differently
than Adjusted EBITDA for the Company's credit agreements and
indentures, certain financial covenants in its borrowing
arrangements are tied to similar financial measures. These non-GAAP
financial measures should be read in conjunction with the Company's
financial statements and related footnotes filed with the SEC.
(b) Segment profit is defined as income from continuing
operations for each of the Company's Revlon, Elizabeth Arden,
Portfolio and Fragrances segments, excluding the EBITDA Exclusions.
Segment profit also excludes the impact of certain items that are
not directly attributable to the segments' underlying operating
performance, including the impact of the Non-Operating Items noted
above in footnote (a). The Company does not have any material
inter-segment sales.
FORWARD-LOOKING
STATEMENTS
Statements made in this press release, which are not historical
facts, are forward-looking and are provided pursuant to the safe
harbor provisions of the Private Securities Litigation Reform Act
of 1995. Forward-looking statements speak only as of the date they
are made and the Company undertakes no obligation to publicly
update any forward-looking statement, whether to reflect actual
results of operations; changes in financial condition; changes in
general U.S. or international economic or industry conditions
and/or conditions in the Company’s reportable segments; changes in
estimates, expectations or assumptions; or other circumstances,
conditions, developments and/or events arising after the issuance
of this press release, except for the Company's ongoing obligations
under the U.S. federal securities laws. Forward-looking statements
are subject to known and unknown risks and uncertainties and are
based on preliminary or potentially inaccurate estimates and
assumptions that could cause actual results to differ materially
from those expected or implied by the estimated financial
information. Such forward-looking statements include, among other
things, the Company remaining encouraged by the positive consumer
response to its first half 2019 new product introductions. Actual
results may differ materially from the Company's forward-looking
statements for a number of reasons, including as a result of the
risks and other items described in Revlon’s filings with the SEC,
including, without limitation, in Revlon’s Annual Report on Form
10-K, Quarterly Reports on Form 10-Q and Current Reports on Form
8-K and amendments thereto, if any, filed with the SEC during 2018
and 2019 (which may be viewed on the SEC’s website at
http://www.sec.gov or on Revlon, Inc.’s website at
http://www.revloninc.com). Additional important factors that could
cause actual results to differ materially from those indicated by
the Company’s forward-looking statements include risks,
unanticipated circumstances and/or uncertainties relating to less
than effective new product innovation and development and/or
greater than expected investments or unanticipated costs to achieve
such initiatives; changes in consumer preferences, such as reduced
consumer demand for the Company's color cosmetics and other current
products, including new product launches; changes in consumer
purchasing habits, including with respect to retailer preferences
and/or among sales channels, such as due to the continuing
consumption declines in core beauty categories in the mass retail
channel in North America; lower than expected customer acceptance
or consumer acceptance of, or less than anticipated results from,
the Company’s new products and/or the Company’s advertising,
marketing or promotional plans and activities; higher than expected
retail store closures in the brick-and-mortar channels where the
Company sells its products, as consumers continue to shift
purchases to online and e-commerce channels; actions by the
Company’s customers, such as greater than expected inventory
management and/or de-stocking, and greater than anticipated space
reconfigurations or reductions in display space and/or product
discontinuances or a greater than expected impact from pricing,
marketing, advertising and/or promotional strategies by the
Company's customers; and/or decreased sales of the Company's
products as a result of changes in the competitive environment and
increased competitive activities by the Company's competitors,
including, among other things, business combinations, technological
breakthroughs, implementation of new pricing strategies, new
product offerings and/or increased advertising, promotional and
marketing spending by competitors. Factors other than those
referred to above could also cause Revlon’s results to differ
materially from expected results. Additionally, the business and
financial materials and any other statement or disclosure on, or
made available through, Revlon’s website or other websites
referenced herein shall not be incorporated by reference into this
press release.
REVLON, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF
OPERATIONS AND COMPREHENSIVE LOSS (dollars in millions,
except share and per share amounts)
Three Months EndedMarch
31,
2019 2018 (Unaudited) Net sales $ 553.2
$ 560.7 Cost of sales 237.8 242.6 Gross profit 315.4
318.1 Selling, general and administrative expenses 332.6 371.7
Acquisition and integration costs 0.6 4.0 Restructuring charges and
other, net 5.5 4.1 Operating loss (23.3 ) (61.7 )
Other expenses: Interest expense 47.7 39.9 Amortization of
debt issuance costs 3.2 2.3 Foreign currency losses (gains), net
0.2 (10.6 ) Miscellaneous, net 1.3 — Other expenses
52.4 31.6 Loss from continuing operations
before income taxes (75.7 ) (93.3 ) Provision (benefit) from income
taxes 0.1 (1.6 ) Loss from continuing operations, net of
taxes (75.8 ) (91.7 ) Income from discontinued operations, net of
taxes 0.7 1.4 Net loss $ (75.1 ) $ (90.3 )
Other comprehensive (loss) income: Foreign currency translation
adjustments (1.3 ) (2.5 ) Amortization of pension related costs,
net of tax 2.2 2.1 Reclassification into earnings of accumulated
losses from the de-designated 2013 Interest Rate Swap, net of tax —
0.6 Other comprehensive income, net 0.9 0.2
Total comprehensive loss $ (74.2 ) $ (90.1 ) Basic
(loss) earnings per common share: Continuing operations $ (1.43 ) $
(1.74 ) Discontinued operations 0.01 0.03 Net loss $
(1.42 ) $ (1.71 ) Diluted (loss) earnings per common share:
Continuing operations $ (1.43 ) $ (1.74 ) Discontinued operations
0.01 0.03 Net loss $ (1.42 ) $ (1.71 )
Weighted average number of common shares outstanding: Basic
52,913,388 52,673,672 Diluted 52,913,388
52,673,672
REVLON, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS (dollars in
millions) March 31,
December 31,
2019 2018 (Unaudited) ASSETS
Current assets: Cash and cash equivalents $ 68.3 $ 87.3 Trade
receivables, net 378.5 431.3 Inventories 546.7 523.2 Prepaid
expenses and other current assets 147.7 152.0 Total
current assets 1,141.2 1,193.8 Property, plant and equipment, net
444.7 354.5 Deferred income taxes 138.3 131.8 Goodwill 673.7 673.9
Intangible assets, net 515.8 532.0 Other assets 128.0 130.8
Total assets $ 3,041.7 $ 3,016.8
LIABILITIES AND STOCKHOLDERS' DEFICIENCY Current
liabilities: Short-term borrowings $ 8.6 $ 9.3 Current portion of
long-term debt 389.7 348.1 Accounts payable 355.7 332.1 Accrued
expenses and other current liabilities 377.9 430.9
Total current liabilities 1,131.9 1,120.4 Long-term debt 2,723.9
2,727.7 Long-term pension and other post-retirement plan
liabilities 167.3 169.0 Other long-term liabilities 150.8 56.5
Total stockholders' deficiency (1,132.2 ) (1,056.8 ) Total
liabilities and stockholders' deficiency $ 3,041.7 $ 3,016.8
REVLON, INC. AND SUBSIDIARIES CONSOLIDATED
STATEMENTS OF CASH FLOWS (dollars in millions)
Three Months Ended March 31,
2019 2018 (Unaudited) CASH
FLOWS FROM OPERATING ACTIVITIES: Net loss $ (75.1 ) $ (90.3 )
Adjustments to reconcile net loss to net cash used in operating
activities: Depreciation and amortization 47.0 38.7 Foreign
currency losses (gains) from re-measurement 0.2 (10.5 )
Amortization of debt discount 0.4 0.3 Stock-based compensation
amortization 0.4 7.7 Benefit from deferred income taxes (5.6 )
(18.5 ) Amortization of debt issuance costs 3.2 2.3 Loss on sale of
certain assets — 0.1 Pension and other post-retirement cost 2.0 0.6
Change in assets and liabilities: Decrease in trade receivables
52.4 67.6 Increase in inventories (24.0 ) (14.6 ) Decrease
(increase) in prepaid expenses and other current assets 1.5 (46.3 )
Increase in accounts payable 41.1 2.3 Decrease in accrued expenses
and other current liabilities (66.7 ) (24.1 ) Pension and other
post-retirement plan contributions (1.8 ) (1.8 ) Purchases of
permanent displays (9.7 ) (14.2 ) Other, net 6.3 3.4
Net cash used in operating activities (28.4 ) (97.3 )
CASH FLOWS FROM INVESTING ACTIVITIES: Capital expenditures
(5.8 ) (13.7 ) Net cash used in investing activities (5.8 ) (13.7 )
CASH FLOWS FROM FINANCING ACTIVITIES: Net (decrease)
increase in short-term borrowings and overdraft (17.2 ) 1.0 Net
borrowings under the Amended 2016 Revolving Credit Facility 40.6
83.8 Repayments under the 2016 Term Loan Facility (4.5 ) (4.5 )
Payment of financing costs (0.9 ) — Tax withholdings related to net
share settlements of restricted stock units and awards (1.6 ) (2.9
) Other financing activities (0.2 ) (0.2 ) Net cash provided by
financing activities 16.2 77.2 Effect of exchange
rate changes on cash, cash equivalents and restricted cash 0.3
2.9 Net decrease in cash, cash equivalents and
restricted cash (17.7 ) (30.9 ) Cash, cash equivalents and
restricted cash at beginning of period 87.5 87.4
Cash, cash equivalents and restricted cash at end of period $ 69.8
$ 56.5 Supplemental schedule of cash flow
information: Cash paid during the period for: Interest $ 61.3 $
53.6 Income taxes, net of refunds 0.4 2.6
REVLON, INC.
AND SUBSIDIARIES EBITDA AND ADJUSTED EBITDA
RECONCILIATION (dollars in millions)
Three Months EndedMarch
31,
2019 2018 (Unaudited) Reconciliation
to net loss: Net loss $ (75.1 ) $ (90.3 ) Income from
discontinued operations, net of taxes 0.7 1.4 Loss
from continuing operations, net of taxes (75.8 ) (91.7 )
Interest expense 47.7 39.9 Amortization of debt issuance costs 3.2
2.3 Foreign currency losses (gains), net 0.2 (10.6 ) Provision
(benefit) from income taxes 0.1 (1.6 ) Depreciation and
amortization 47.0 38.7 Miscellaneous, net 1.3 —
EBITDA $ 23.7 $ (23.0 ) Non-operating items: Non-cash
stock compensation expense 0.4 7.7 Restructuring and related
charges 12.1 5.5 Acquisition and integration costs 0.6 4.0 Oxford
ERP system disruption-related charges — 10.0 Financial control
remediation actions and related charges 2.0 —
Adjusted EBITDA $ 38.8 $ 4.2
REVLON, INC.
AND SUBSIDIARIES SEGMENT PROFIT, ADJUSTED EBITDA AND
ADJUSTED OPERATING LOSS RECONCILIATION (dollars in
millions)
Three Months EndedMarch
31,
2019 2018 (Unaudited) Segment Net
Sales: Revlon $ 247.3 $ 229.1 Elizabeth Arden 111.4 105.7
Portfolio 117.2 134.5 Fragrances 77.3 91.4
Total
Segment Net Sales $ 553.2 $
560.7 Segment Profit: Revlon $ 25.6 $
2.3 Elizabeth Arden 1.9 1.5 Portfolio 4.5 (2.8 ) Fragrances 6.8
3.2
Total Segment Profit/Adjusted
EBITDA $ 38.8 $ 4.2
Reconciliation to loss from continuing operations before
income taxes: Loss from continuing operations before income
taxes $ (75.7 ) $ (93.3 ) Interest expense 47.7 39.9
Amortization of debt issuance costs 3.2 2.3 Foreign currency losses
(gains), net 0.2 (10.6 ) Miscellaneous, net 1.3 —
Operating loss (23.3 ) (61.7 ) Non-operating items:
Restructuring and related charges 12.1 5.5 Acquisition and
integration costs 0.6 4.0 Oxford ERP system disruption-related
charges — 10.0 Financial control remediation actions and related
charges 2.0 — Adjusted Operating income (8.6 ) (42.2
) Non-cash stock compensation expense 0.4 7.7 Depreciation
and amortization 47.0 38.7 Adjusted EBITDA $ 38.8
$ 4.2
REVLON, INC. AND SUBSIDIARIES
ADJUSTED GROSS PROFIT RECONCILIATION (dollars in
millions)
Three Months EndedMarch
31,
2019 2018 (Unaudited) Gross Profit $
315.4 $ 318.1 Non-operating items: Restructuring and related
charges — 1.1 Oxford ERP system disruption-related charges — 10.0
Adjusted Gross Profit $ 315.4 $ 329.2
REVLON, INC. AND SUBSIDIARIES ADJUSTED NET LOSS AND
ADJUSTED DILUTED LOSS PER SHARE RECONCILIATION (dollars in
millions, except share and per share amounts)
Three Months EndedMarch
31,
2019 2018 (Unaudited) Reconciliation
to net loss and diluted loss per share: Net loss $ (75.1 ) $
(90.3 ) Non-operating items (after-tax): Restructuring and
related charges 9.5 4.3 Acquisition and integration costs 0.5 3.1
Oxford ERP system disruption-related charges — 7.6 Financial
control remediation actions and related charges 1.5 —
Adjusted net income (loss) $ (63.6 ) $ (75.3 ) Net
income (loss): Diluted loss per common share (1.42 ) (1.71 )
Adjustment to diluted loss per common share 0.22 0.28
Adjusted diluted earnings (loss) per common share $ (1.20 )
$ (1.43 ) U.S. GAAP weighted average number of common shares
outstanding: Diluted 52,913,388 52,673,672
REVLON, INC. AND SUBSIDIARIES FREE CASH FLOW
RECONCILIATION (dollars in millions)
Three Months EndedMarch
31,
2019 2018 (Unaudited) Reconciliation
to net cash used in operating activities: Net cash used
in operating activities $ (28.4 ) $ (97.3 ) Less capital
expenditures (5.8 ) (13.7 ) Free cash flow $ (34.2 )
$ (111.0 )
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version on businesswire.com: https://www.businesswire.com/news/home/20190509005243/en/
Investor Relations:212-527-5230 or
Eric.warren@revlon.com
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