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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
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May 6, 2005 (May 6, 2005)
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Date of Report (Date of earliest event reported)
Revlon, Inc.
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(Exact Name of Registrant as Specified in its Charter)
Delaware 1-11178 13-3662955
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(State or Other (Commission File No.) (I.R.S. Employer
Jurisdiction of Identification
Incorporation) No.)
237 Park Avenue
New York, New York 10017
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(Address of Principal (Zip Code)
Executive Offices)
(212) 527-4000
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(Registrant's telephone number, including area code)
None
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(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):
|_| Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
|_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12)
|_| Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
|_| Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
Item 2.02. Results of Operations and Financial Condition.
On May 6, 2005, Revlon, Inc. issued a press release announcing its earnings
for the fiscal quarter ended March 31, 2005. A copy of the press release is
attached to this report as Exhibit 99.1.
Item 9.01. Financial Statements and Exhibits.
(c) Exhibits
Exhibit No. Description
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99.1 Press Release, dated May 6, 2005
2
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
REVLON, INC.
By: /s/ Robert K. Kretzman
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Robert K. Kretzman
Executive Vice President, Chief Legal
Officer, General Counsel and Secretary
Date: May 6, 2005
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EXHIBIT INDEX
Exhibit No. Description
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99.1 Press Release, dated May 6, 2005
4
Exhibit 99.1
Revlon Reports First Quarter 2005 Results
NEW YORK--(BUSINESS WIRE)--May 6, 2005--Revlon, Inc. (NYSE:REV)
today announced results for the first quarter ended March 31, 2005.
The Company generated Adjusted EBITDA(1) in the quarter of
approximately $22 million, with advertising behind the Company's key
new product launches up significantly, as planned. Net loss in the
quarter was approximately $47 million, or $0.13 per diluted share,
compared with a net loss of approximately $58 million, or $0.63 per
diluted share, in the first quarter of 2004.
During the quarter, the Company made further progress to
strengthen its balance sheet, with the successful consummation of a
$310 million senior notes offering and the subsequent, related
redemption of the Company's 8 1/8% and 9% senior notes. These
transactions extended the maturities on the Company's debt that would
have otherwise matured in 2006 and also reduced the Company's exposure
to floating rate debt.
Commenting on the quarter, Revlon President and Chief Executive
Officer Jack Stahl stated, "Our results in the first quarter, as
expected, are beginning to reflect the actions we took in 2003 and
2004 to ratchet up our capability in the area of new products, while
simultaneously increasing our investment spending behind several of
our well-established franchises. At the same time, we continue to
manage our cost base, in order to create the necessary resources to
invest in our brands to drive growth, and we expect these actions to
benefit us as we move forward. We believe our strategy to strengthen
our brands and their connection to consumers, coupled with our focus
on building best-in-class retail partnerships and the capabilities of
the Revlon organization, will enable us to achieve our objective of
long-term, profitable growth and value creation."
The Company will host a conference call with members of the
investment community on May 6, 2005 at 9:30 AM EDT to discuss the
results of the first quarter. Access to the call is available to the
public at www.revloninc.com.
First Quarter Results
Net sales in the first quarter of 2005 were down approximately 2%
to $301 million, compared with net sales of $308 million in the first
quarter of 2004. This performance was primarily driven by lower
shipments in North America(2) and reduced licensing revenues, as the
2004 first quarter included an approximate $5 million prepayment of a
licensing renewal fee by a licensee. Partially offsetting these
factors was favorable foreign currency translation, which benefited
the sales comparison by approximately two percentage points in the
quarter.
In North America, net sales in the first quarter of 2005 declined
approximately 6% to $194 million, versus $206 million in the first
quarter of 2004. This performance primarily reflected lower shipments
and the impact of the aforementioned lower licensing revenues,
partially offset by lower returns and allowances, including a decrease
in the sales allowances component of brand support. North America
shipments largely reflected strong performance of new products, which
was more than offset by a decrease in shipments of base products.
Internationally, net sales in the first quarter of 2005 advanced
approximately 4% to $107 million, compared with $103 million in the
first quarter of 2004. This growth primarily reflected shipment
strength, particularly in the Far East region, and favorable foreign
currency translation, partially offset by an increase in the sales
allowances component of brand support.
The Company generated an operating loss of approximately $2.1
million in the first quarter of 2005, versus operating income of $20.1
million in the first quarter of 2004. As anticipated, this performance
primarily reflected the Company's planned investment in higher brand
support, as well as the impacts of lower licensing revenues, higher
restructuring costs, and the benefit in the year-ago period of
approximately $3 million associated with a modification to
International benefits. Similarly, Adjusted EBITDA in the first
quarter of 2005 was approximately $21.6 million, compared with
Adjusted EBITDA of approximately $44.5 million in the first quarter of
2004. Substantially the same factors driving the comparison for
operating income also drove the comparison for Adjusted EBITDA.
Adjusted EBITDA is a non-GAAP measure that is defined in the
footnotes to this release and which is reconciled to net
income/(loss), the most directly comparable GAAP measure, in the
accompanying financial tables.
Net loss in the first quarter of 2005 was $46.8 million, or $0.13
per diluted share, compared with a net loss of $58.2 million, or $0.63
per diluted share, in the first quarter of 2004. Net loss in the 2005
first quarter benefited from a significant reduction in interest
expense and lower costs associated with the early extinguishment of
debt. In addition, the diluted per share comparison benefited from the
Company's debt-for-equity exchange offers, consummated in March 2004,
which significantly increased common shares outstanding in the 2005
period.
Cash flow used for operating activities in the first quarter of
2005 was $7.6 million, compared with cash flow used for operating
activities of $35.6 million in the first quarter of 2004.
Market Share Results(3):
In terms of U.S. marketplace performance, according to ACNielsen,
the color cosmetics category grew 1.4% versus year-ago in the first
quarter. The Company registered a share of 21.9% for the quarter, down
0.2 share points versus the same period last year. The Revlon brand
registered a share of 15.6% for the quarter, compared with 16.4% in
the year-ago period, while the Almay brand advanced to 6.3% for the
quarter, up 0.5 points versus year-ago.
In other key categories, the Company gained share in hair color,
while market share declined in beauty tools and was essentially even
for anti-perspirants/deodorants.
About Revlon
Revlon is a worldwide cosmetics, skin care, fragrance and personal
care products company. The Company's vision is to deliver the promise
of beauty through creating and developing the most consumer preferred
brands. Websites featuring current product and promotional information
can be reached at www.revlon.com and www.almay.com. Corporate investor
relations information can be accessed at www.revloninc.com. The
Company's brands, which are sold worldwide, include Revlon(R),
Almay(R), Ultima(R), Charlie(R), Flex(R) and Mitchum(R).
Footnotes to Press Release
(1) Adjusted EBITDA is defined as net earnings before interest, taxes,
depreciation, amortization, gains/losses on foreign currency
transactions, gains/losses on the sale of assets, gains/losses on the
early extinguishment of debt, and miscellaneous expenses. Adjusted
EBITDA is a non-GAAP financial measure. The Company believes that
Adjusted EBITDA is a financial metric that can assist the Company and
investors in assessing its financial operating performance.
Historically, the Company viewed Adjusted EBITDA as both a performance
measure and a liquidity measure and reconciled the metric to both net
income/(loss), for its use as a performance measure, and cash flow
from/(used for) operating activities, for its use as a liquidity
measure. For 2005 and beyond, the Company views Adjusted EBITDA solely
as a performance measure. The Company believes that, as a performance
measure, Adjusted EBITDA is useful in understanding the financial
operating performance and underlying strength of its business,
excluding the effects of certain factors, including gains/losses on
foreign currency transactions, gains/losses on the sale of assets and
miscellaneous expenses. Finally, EBITDA is defined differently for our
credit agreement.
In the accompanying tables, Adjusted EBITDA is reconciled to net
income/(loss), its most directly comparable GAAP measure.
(2) North America includes the United States and Canada.
(3) All market share and consumption data is U.S. mass-market dollar
volume according to ACNielsen (an independent research entity).
ACNielsen data is an aggregate of the drug channel, Kmart, Target and
Food and Combo stores, and excludes Wal-Mart and regional mass volume
retailers. This data represents approximately 70% of the Company's
U.S. mass market dollar volume.
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.
Forward-looking statements speak only as of the date they are made,
and, except for the Company's ongoing obligations under the U.S.
federal securities laws, the Company undertakes no obligation to
publicly update any forward-looking statement, whether as a result of
new information, future events or otherwise. Such forward-looking
statements include, without limitation, the Company's expectations and
estimates about future events; the Company's plans to ratchet up its
capability in the area of new products, increasing its investment
spending behind several of its well-established franchises, continuing
to manage its cost base in order to create the necessary resources to
invest in the Company's brands to drive growth, and the expectation
that these actions would benefit the Company as it moves forward; the
Company's belief that its strategy to strengthen its brands and their
connection to consumers, coupled with its focus on building
best-in-class retail partnerships and the capabilities of the Revlon
organization, will enable the Company to achieve its objective of
long-term, profitable growth and value creation. 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
Securities and Exchange Commission, including the Company's Annual
Report on Form 10-K/A for the year ended December 31, 2004, and the
Company's Quarterly Reports on Form 10-Q and Current Reports on Form
8-K that it files with the SEC during 2005 (which may be viewed on the
SEC's website at http://sec.gov or on the Company's website at
http://www.revloninc.com), as well as reasons including difficulties,
delays, unexpected costs or the inability of the Company to ratchet up
its capability in the area of new products or continue to manage its
cost base; difficulties, delays, unexpected costs or the inability of
the Company to strengthen its brands and their connection to
consumers; difficulties, delays or the inability of the Company to
build best-in-class retail partnerships and the capabilities of the
Revlon organization; and difficulties, delays, unexpected costs or the
inability of the Company to achieve its objective of long-term,
profitable growth and value creation, such as by less than anticipated
acceptance of the Company's new products by retailers or consumers,
less than expected benefits from the Company's new product development
process; the Company's inability to achieve its operating margin
improvements; softness in the U.S. mass market color cosmetics
category; the Company's inability to generate sufficient funds from
improved efficiencies and profit margins to increase its investment in
its brands and products to the extent planned or other difficulties,
delays or inabilities to increase such level of investment; and the
Company's advertising, marketing, promotions and media being less
effective than planned or the Company's inability to optimize the
effectiveness of its advertising, marketing, promotions and media.
Factors other than those listed above could also cause the Company's
results to differ materially from expected results.
REVLON, INC. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(dollars in millions, except per share data)
Three Months Ended
March 31,
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2005 2004
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Net sales $ 300.9 $ 308.4
Cost of sales 114.2 117.1
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Gross profit 186.7 191.3
Selling, general and administrative expenses 187.1 171.9
Restructuring (benefit) costs and other, net 1.7 (0.7)
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Operating income (loss) (2.1) 20.1
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Other expenses (income):
Interest expense 29.7 44.6
Interest income (1.6) (1.0)
Amortization of debt issuance costs 1.6 2.6
Foreign currency (gains) losses, net 2.5 (1.4)
Loss on early extinguishment of debt 7.5 32.6
Miscellaneous, net 1.4 0.1
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Other expenses, net 41.1 77.5
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Loss before income taxes (43.2) (57.4)
Provision for income taxes 3.6 0.8
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Net loss $ (46.8) $ (58.2)
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Basic and diluted net loss per common
share $ (0.13) $ (0.63)
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Weighted average number of common shares
outstanding:
Basic and diluted 370,126,944 92,933,027
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REVLON, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
(dollars in millions)
March 31, December 31,
ASSETS 2005 2004
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(Unaudited)
Current assets:
Cash and cash equivalents $ 104.1 $ 120.8
Trade receivables, net 152.3 200.6
Inventories 169.6 154.7
Prepaid expenses and other 72.4 69.7
Investment in debt defeasance trust 197.9 -
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Total current assets 696.3 545.8
Property, plant and equipment, net 115.3 118.7
Other assets 157.4 149.9
Goodwill, net 186.1 186.1
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Total assets $ 1,155.1 $ 1,000.5
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LIABILITIES AND STOCKHOLDERS' DEFICIENCY
Current liabilities:
Short-term borrowings - third parties $ 33.9 $ 36.6
Current portion of long-term debt
- third parties 191.7 10.5
Accounts payable 100.9 95.2
Accrued expenses and other 270.4 283.2
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Total current liabilities 596.9 425.5
Long-term debt - third parties 1,337.0 1,308.2
Other long-term liabilities 286.6 286.7
Total stockholders' deficiency (1,065.4) (1,019.9)
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Total liabilities and stockholders'
deficiency $ 1,155.1 $ 1,000.5
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REVLON, INC. AND SUBSIDIARIES
UNAUDITED ADJUSTED EBITDA RECONCILIATION
(dollars in millions)
Three Months Ended
March 31,
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2005 2004
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(Unaudited)
Reconciliation to net loss:
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Net loss $ (46.8) $ (58.2)
Interest expense, net 28.1 43.6
Amortization of debt issuance costs 1.6 2.6
Foreign currency (gains) losses, net 2.5 (1.4)
Loss on early extinguishment of debt 7.5 32.6
Miscellaneous, net 1.4 0.1
Provision for income taxes 3.6 0.8
Depreciation and amortization 23.7 24.4
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Adjusted EBITDA $ 21.6 $ 44.5
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CONTACT: Revlon, Inc.
Investor Relations:
Maria A. Sceppaguercio, 212-527-5230
or
Media:
Scott Behles, 212-527-4718