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
Date of Report: March 13, 2007
(Date of earliest event reported): (March 13, 2007)
Revlon, Inc.
(Exact Name of Registrant as Specified in its Charter)
Delaware 1-11178 13-3662955
- --------------------------------------------------------------------------------
(State or Other Jurisdiction of (Commission (I.R.S. Employer
Incorporation) File Number) Identification No.)
237 Park Avenue
New York, New York 10017
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(Address of Principal Executive Offices) (Zip Code)
(212) 527-4000
--------------
(Registrant's telephone number, including area code)
None
----
(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 March 13, 2007, Revlon, Inc. issued a press release announcing its
earnings for the fourth quarter and full fiscal year ended December 31, 2006. A
copy of the press release is attached hereto as Exhibit 99.1 and is incorporated
by reference herein. In accordance with General Instruction B.2 to the Form 8-K,
the information under this Item 2.02 and the press release attached hereto as
Exhibit 99.1 shall be deemed to be "furnished" to the SEC and not be deemed to
be "filed" with the SEC for purposes of Section 18 of the Exchange Act or
otherwise subject to the liabilities of that section.
Item 9.01. Financial Statements and Exhibits.
(c) Exhibits
Exhibit No. Description
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99.1 Press release dated March 13, 2007.
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
----------------------
Robert K. Kretzman
Executive Vice President, Human Resources,
Chief Legal Officer, General
Counsel and Secretary
Date: March 13, 2007
3
EXHIBIT INDEX
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Exhibit No. Description
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99.1 Press release dated March 13, 2007.
4
FOR IMMEDIATE RELEASE
Revlon Reports Fourth Quarter and Full Year 2006 Results
Full Year Results Consistent with Previous Guidance
Company Reiterates its Outlook for 2007
NEW YORK, March 13, 2007 - Revlon, Inc. (NYSE: REV) today announced results for
the fourth quarter and full year ended December 31, 2006. Net loss for the
fourth quarter was $5.5 million versus net income of $64.3 million in the fourth
quarter of 2005. Adjusted EBITDA(1) for the fourth quarter was $108.2 million
versus Adjusted EBITDA of $126.8 million in the fourth quarter of 2005. Net loss
for the full year was $251.3 million versus a net loss of $83.7 million in 2005.
Adjusted EBITDA for the full year was $78.2 million versus Adjusted EBITDA of
$166.6 million in 2005.
During the quarter, the Company continued to successfully implement its
previously disclosed organizational streamlining, as well as its previously
disclosed discontinuance of Vital Radiance, which did not maintain an
economically feasible retail platform for future growth. Revlon reiterated its
belief that the restructuring actions taken during 2006 and the discontinuance
of Vital Radiance will accelerate the Company's path to becoming net income and
cash flow positive. The total impact of restructuring charges, Vital Radiance
and executive severance negatively impacted full year 2006 operating
profitability by approximately $145 million and Adjusted EBITDA by approximately
$123 million.
Commenting on the Company's performance, Revlon President and Chief Executive
Officer David Kennedy stated, "Our results for the year reflect the important
and costly decisions we have made to position Revlon for future success. We are
fortunate to have such a strong portfolio of brands, particularly the Revlon
brand, which we intend to fully leverage going forward. As we move into 2007, we
will continue to concentrate on bringing innovation and excitement to the market
in a way that is intensely focused on improving our profitability and cash flow.
We remain confident in our ability to achieve Adjusted EBITDA of approximately
$210 million in 2007."
Adjusted EBITDA is a non-GAAP measure that is defined in the footnotes of this
release and which is reconciled to net income/(loss), the most directly
comparable GAAP measure, in the accompanying financial tables.
Page 1
The Company will host a conference call with members of the investment community
on March 13, 2007 at 9:30 AM EDT to discuss the results of the fourth quarter
and full year 2006. Access to the call is available to the public at
www.revloninc.com, in the Investor Relations section, under Events Calendar. A
copy of the press release and related information will be available in the
Investor Relations section of the Company's website.
Fourth Quarter Results
----------------------
Net sales in the fourth quarter of 2006 declined 13.5% to $378.9 million,
compared with net sales of $437.8 million in the fourth quarter of 2005. This
decline was primarily driven by lower shipments, partially offset by lower
returns, allowances and discounts. Excluding the favorable impact of foreign
currency, net sales in the fourth quarter of 2006 declined 13.8% versus
year-ago. The fourth quarter of 2005 benefited significantly from the sell-in
associated with the complete re-stage of the Almay brand and the launch of the
Vital Radiance brand.
In the United States(2), net sales for the quarter declined 20.7% to $227.1
million, versus $286.3 million in the fourth quarter of 2005. This performance
was driven by lower shipments in color cosmetics, partially offset by lower
returns, allowances and discounts, and higher shipments in the beauty care
businesses. As noted above, the fourth quarter of 2005 benefited significantly
from the sell-in associated with the Almay re-stage and the launch of Vital
Radiance.
In International, net sales for the quarter were essentially even at $151.8
million, versus $151.5 million in the fourth quarter of 2005. Double-digit
growth in Latin America was offset by low-single-digit declines in Asia Pacific
and Europe. Excluding the impact of foreign currency translation, International
net sales in the quarter declined by approximately one percentage point versus
year-ago.
Operating income in the fourth quarter was $70.1 million, versus operating
income of $99.6 million in the fourth quarter of 2005. Adjusted EBITDA in the
fourth quarter of 2006 was $108.2 million, compared with Adjusted EBITDA of
$126.8 million in the same period last year. Operating income and Adjusted
EBITDA in the fourth quarter of 2006 were negatively impacted by $20.8 million
and $9.7 million, respectively, as a result of the previously announced February
2006 and September 2006 restructuring programs and the discontinuance of the
Vital Radiance brand.
Page 2
Net loss in the fourth quarter of 2006 was $5.5 million, or $0.01 per diluted
share, compared with net income of $64.3 million, or $0.17 per diluted share, in
the fourth quarter of 2005.
Net cash used for operating activities in the fourth quarter of 2006 was $13.9
million, compared with net cash used for operating activities of $23.8 million
in the fourth quarter of 2005. This performance reflected the higher net loss in
the fourth quarter of 2006, offset by an overall improvement in the levels of
working capital.
Full-Year Results
-----------------
Net sales for the full year 2006 were essentially even at $1,331.4 million,
compared with net sales of $1,332.3 million in 2005. Higher shipments and lower
returns were offset by higher allowances. Foreign currency fluctuations had a
negligible impact on net sales for the full year.
In the United States, net sales for the year declined by 3% to $764.9 million,
versus $788.3 million in 2005. This decline was due to the discontinuance, in
September 2006, of Vital Radiance, which launched in 2005, partially offset by
higher net sales of Revlon and Almay color cosmetics products and beauty care
products.
In International, net sales for the year increased by 4.1% to $566.5 million,
versus $544.0 million in 2005. The increase in net sales was driven primarily by
higher shipments in the Europe and Latin America regions. Excluding the impact
of foreign currency fluctuations, international net sales increased in all three
regions in the aggregate by $19.8 million, or 3.6%, in 2006, as compared with
2005.
Operating loss for the full year of 2006 was $50.2 million, versus operating
income of $64.9 million in 2005. Adjusted EBITDA for 2006 was $78.2 million,
versus Adjusted EBITDA of $166.6 million in 2005. Restructuring actions taken
during 2006, the total impact of Vital Radiance and executive severance
negatively impacted full year operating profitability by approximately $145
million and Adjusted EBITDA by approximately $123 million.
Net loss in 2006 was $251.3 million, or $0.62 loss per diluted share, compared
with net loss of $83.7 million, or $0.22 loss per diluted share, in 2005.
Page 3
Net cash used for operating activities in 2006 was $138.7 million, compared with
net cash used for operating activities of $139.7 million in 2005. This
performance reflected the higher net loss in 2006, offset by a significant
improvement in the level of working capital.
U. S. Market Share Results(3)
-----------------------------
For the fourth quarter of 2006, according to ACNielsen, the U.S. color cosmetics
category increased approximately 2.7% versus year-ago. U.S. mass-market share
for the Revlon, Almay and Vital Radiance (which was discontinued in September
2006) brands color cosmetics and for hair color, anti-perspirants and deodorants
and beauty tools for the fourth quarter of 2006 are summarized in the table
below:
$ Share %
-------------------------------------------------
Point
Q4, 2006 Q4, 2005 Change
---------------- ---------------- ----------
Total Company Color Cosmetics 20.3 % 20.5 % (0.2)
Revlon Brand 13.0 14.7 (1.7)
Almay Brand 5.9 5.7 0.2
Vital Radiance Brand 1.4 - 1.4
Total Company Women's Hair Color 9.6 8.8 0.8
Total Company Anti-perspirants / deodorants 6.1 6.1 -
Revlon Beauty Tools 25.1 24.4 0.7
For the full year 2006, according to ACNielsen, the U.S. color cosmetics
category increased approximately 4.2% versus 2005. U.S. mass-market share for
the Revlon, Almay and Vital Radiance (which was discontinued in September 2006)
brands color cosmetics and for hair color, anti-perspirants and deodorants and
beauty tools for the full year 2006 are summarized in the table below:
$ Share %
-------------------------------------------------
Point
2006 2005 Change
---------------- ---------------- ----------
Total Company Color Cosmetics 21.5 % 21.6 % (0.1)
Revlon Brand 14.1 15.4 (1.2)
Almay Brand 6.2 6.2 -
Vital Radiance Brand 1.2 - 1.2
Total Company Women's Hair Color 9.2 8.5 0.7
Total Company Anti-perspirants / deodorants 6.2 6.2 -
Revlon Beauty Tools 26.3 25.0 1.3
Page 4
Recent Financing Activities
---------------------------
In December 2006, the Company successfully refinanced its 2004 credit agreement,
which is expected to result in significant annual interest savings due to lower
interest margins, and to provide the Company with greater financial and other
covenant flexibility, as well as extending the maturity of the credit agreement
to January 2012. In refinancing the credit agreement, the Company entered into a
new $840 million term loan facility with a maturity of January 2012 and an
amended and restated revolving credit agreement, extending the maturity of the
existing $160 million multi-currency revolving credit facility through January
2012. The interest rate on the new term loan facility, which was fully drawn at
February 28, 2007, was reduced by 200 basis points. The interest rate on the
revolving credit facility, which was undrawn at February 28, 2007, was reduced
by 50 basis points.
In January 2007, the Company completed a significantly over-subscribed $100
million rights offering, which it launched in December 2006. The proceeds from
the offering were used to redeem $50.0 million in aggregate principal amount of
its 8 5/8% Senior Subordinated Notes, reducing the outstanding balance of these
notes to $167.4 million, and to repay all of the approximately $43.3 million of
indebtedness then outstanding in January 2007 under the revolving credit
facility, with the balance of approximately $5.0 million, after fees and
expenses, being available for general corporate purposes. Also, effective upon
the consummation of the $100 million rights offering, $50 million of the line of
credit from MacAndrews & Forbes will remain available through January 31, 2008.
Outlook - 2007 and Beyond
-------------------------
"As we move into 2007", said Kennedy, "we are going to focus on the following
key strategic imperatives:
o Build and leverage our strong brands. We intend to build and leverage our
brands, particularly the Revlon brand, across the categories in which we
compete. In addition to Revlon and Almay brand color cosmetics, we plan to
drive growth in other beauty care categories, including women's hair color,
beauty tools, fragrance and antiperspirants and deodorants. We intend to
implement this strategy by: 1) reinvigorating new product development,
fully utilizing our creative, marketing and research and development
capabilities, 2) reinforcing clear, consistent brand positioning through
effective, innovative advertising and promotion, and 3) working with our
retail customers to continue to increase the effectiveness of our in-store
marketing, promotion and display walls across categories and brands.
Page 5
o Improve execution of our strategies and plans, and provide for continued
improvement in organizational capability through enabling and developing
our employees. We intend to continue to build organizational capability
primarily through a focus on recruitment and retention of skilled people,
providing opportunities for professional development and expanded
responsibilities and roles and rewarding our employees for success.
o Continue to strengthen our international business. We plan to leverage
worldwide our U.S. - based marketing, research and development and new
product development. In addition, in our international business, we plan to
focus on our well-established, strong national and multi-national brands,
investing at appropriate competitive levels, controlling spending and
working capital and optimizing the supply chain and cost structure.
o Improve operating profit margins and cash flow. We plan to capitalize on
what we believe are significant opportunities to improve operating margins
and cash flow over time. The key areas of our focus will continue to be
reducing sales returns, costs of goods sold, general and administrative
expenses and improving working capital management.
o Continue to improve capital structure. We plan to continue to take
advantage of opportunities to reduce and refinance our debt, including
refinancing the remaining balance of our 8 5/8% Senior Subordinated Notes
due on February 1, 2008."
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, www.almay.com, and www.mitchumman.com. Corporate and investor
relations information can be accessed at www.revloninc.com. The Company's brands
include Revlon(R), Almay(R), Ultima(R), Charlie(R), Flex(R), and Mitchum(R).
Contact: Calandra Matthews - (212) 527-6463
Page 6
Footnotes to Press Release
--------------------------
(1)Adjusted EBITDA is a non-GAAP financial measure that is reconciled to net
income/(loss), its most directly comparable GAAP measure, in the accompanying
financial tables. 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. In calculating Adjusted
EBITDA, the Company excludes the effects of gains/losses on foreign currency
transactions, gains/losses on the sale of assets, gains/losses on the early
extinguishment of debt and miscellaneous expenses 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 these
items do not facilitate an understanding of the Company's operating performance.
The Company's management utilizes Adjusted EBITDA as an operating performance
measure in conjunction with GAAP measures, such as net income and gross margin
calculated in accordance with GAAP.
The Company's management uses Adjusted EBITDA as an integral part of its
reporting and planning processes and as one of the primary measures to, among
other things --
(i) monitor and evaluate the performance of the Company's business
operations;
(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 as a measure in evaluating employee compensation and bonuses;
(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.
The Company's management believes that Adjusted EBITDA is useful to investors to
provide them with disclosures of the Company's operating results on the same
basis as that used by the Company's management. Additionally, the Company's
management believes that Adjusted EBITDA provides useful information to
investors about the performance of the Company's overall business because such
measure eliminates the effects of unusual or other infrequent charges that are
not directly attributable to the Company's underlying operating performance.
Additionally, the Company's management believes that because it has historically
provided Adjusted EBITDA in previous press releases, that including such
non-GAAP measure in its earnings releases provides consistency in its financial
reporting and continuity to investors for comparability purposes. Accordingly,
the Company believes that the presentation of Adjusted EBITDA, when used in
conjunction with GAAP financial measures, is a useful financial analysis tool,
used by the Company's management as described above, that can assist investors
in assessing the Company's financial condition, operating performance and
underlying strength. Adjusted EBITDA should not be considered in isolation or as
a substitute for net income/(loss) prepared in accordance with GAAP. Other
companies may define EBITDA differently. Also, while EBITDA is defined
differently than Adjusted EBITDA for the Company's credit agreement, certain
financial covenants in its borrowing arrangements are tied to similar measures.
Adjusted EBITDA, as well as the other information in this press release, should
be read in conjunction with the Company's financial statements and footnotes
contained in the documents that the Company files with the U.S. Securities and
Exchange Commission.
(2) During the second quarter of 2006, management responsibility for its
business in Canada was transferred from the North America operations to the
European region of its International operations. Accordingly, all prior period
amounts have been reclassified to reflect Canada's financial information in the
Company's International operations.
(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 two-thirds of the Company's U.S. mass-market dollar volume. Such
data represent ACNielsen's estimates based upon data gathered by ACNielsen from
market samples and are therefore subject to some degree of variance and may
contain slight rounding differences.
Page 7
Forward-Looking Statements
--------------------------
Statements made 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. In particular, the Company does not
generally publish its strategic plans or make external projections of its
anticipated financial position or results of operations or the type of
forward-looking information regarding its strategic plans included in this press
release, including projections or estimates of growth opportunities, such as
Adjusted EBITDA. Accordingly, except for the Company's ongoing obligations under
the U.S. federal securities laws, the Company does not intend to update or
otherwise revise its forward-looking information to reflect actual results of
operations, changes in financial condition, changes in estimates, expectations
or assumptions or other circumstances arising and/or existing since the
preparation of this press release or to reflect the occurrence of any
unanticipated events. Further, the Company does not intend to update or revise
its forward-looking information to reflect changes in general economic, industry
or cosmetics category conditions.
Such forward-looking statements include, without limitation, the Company's
expectations, plans and/or beliefs: (i) concerning its future growth,
profitability, cash flow and financial performance, including that the Company's
restructuring actions taken during 2006 and the discontinuance of Vital Radiance
will accelerate the Company's path to becoming net income and cash flow
positive; the Company's plans to fully leverage its strong portfolio of brands,
particularly Revlon; its plans to improve profitability and cash flow by
bringing innovation and excitement to the market; and that the Company has the
ability to achieve Adjusted EBITDA of approximately $210 million in 2007; (ii)
that the new credit agreements will result in significant annual interest
savings due to lower interest margins and provide the Company with greater
financial and other covenant flexibility; and (iii) regarding its business
strategy, including (a) its plans to build and leverage its brands, particularly
the Revlon brand, across the categories in which it competes, including, in
addition to Revlon and Almay brand color cosmetics, driving growth in other
beauty care categories, including women's hair color, beauty tools, fragrance
and antiperspirants and deodorants, including by: 1) reinvigorating new product
development, fully utilizing the Company's creative, marketing and research and
development capabilities, 2) reinforcing clear, consistent brand positioning
through effective, innovative advertising and promotion, and 3) working with the
Company's retail customers to continue to increase the effectiveness of its
in-store marketing, promotion and display walls across categories and brands;
(b) its plans to continue to build organizational capability primarily through a
focus on recruitment and retention of skilled people, providing opportunities
for professional development and expanded responsibilities and roles and
rewarding employees for success; (c) its plans to leverage worldwide its
U.S.-based marketing, research and development and new product development and
that in its international business, it will focus on its well-established,
strong national and multi-national brands, investing at appropriate competitive
levels, controlling spending and working capital and optimizing the supply chain
and cost structure; (d) its plans to capitalize on what the Company believes are
significant opportunities to improve its operating margins and cash flow over
time, with key areas of focus continuing to be reducing sales returns, costs of
goods sold, general and administrative expenses and improving working capital
management; and (e) its plans to continue to take advantage of opportunities to
reduce and refinance its debt, including, without limitation, refinancing the
remaining balance of its 8 5/8% Senior Subordinated Notes.
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 the Company's Annual Report on Form 10-K for the year ended
December 31, 2005, as well as the Annual Report on Form 10-K for the year ended
December 31, 2006 which Revlon, Inc. plans to file with the SEC on or before
March 16, 2007, and the Company's Quarterly Reports on Form 10-Q and Current
Reports on Form 8-K that it filed with the SEC during 2006 and will file with
the SEC during 2007 (which may be viewed on the SEC's website at
http://www.sec.gov or on the Company's website at http://www.revloninc.com), as
well as reasons including difficulties, delays or the inability of the Company
to: (i) achieve its future growth, profitability, cash flow and financial
performance objectives, including less than anticipated growth, or a decrease
in, Adjusted EBITDA, including, without limitation, 2007 Adjusted EBITDA being
less than approximately $210 million, such as due to less than anticipated
results from the Company's brands, lower than anticipated revenues or more than
anticipated returns, less than anticipated shipments, higher than expected
expenses, less than anticipated retail customer or consumer acceptance of the
Company's existing or new products, including under the Revlon brand, less than
expected acceptance of the Company's advertising, promotion and/or marketing
plans by the Company's consumers and/or retail customers, decreased sales of the
Company's existing products as a result of new products, actions by the
Company's retail customers impacting the Company's financial performance,
including in response to decreased consumer spending in response to weak
economic conditions or weakness in the category or retailer inventory
management, changes in consumer preferences, such as reduced consumer demand for
Page 8
the Company's color cosmetics and other current products, changes in consumer
purchasing habits, including with respect to shopping channels, changes in the
competitive environment and actions by the Company's competitors, including
business combinations, technological breakthroughs, new products offerings,
promotional spending and marketing and promotional successes; (ii) lower than
anticipated interest savings, such as due to higher than anticipated increases
in LIBOR or higher than anticipated overall debt outstanding; and/or (iii)
difficulties, delays or unanticipated costs in executing the Company's business
strategy, which could affect the Company's ability to achieve its objectives,
such as (a) less than effective product development, less than expected growth
of the Revlon or Almay brands and/or in women's hair color, beauty tools,
fragrance and/or antiperspirants and deodorants, such as due to less than
expected acceptance of the Company's new products under these brands and lines
by consumers and/or retail customers, less than expected acceptance of the
Company's advertising, promotion and/or marketing plans by the Company's
consumers and/or retail customers, disruptions, delays or difficulties in
executing the Company's business strategy or less than expected investment in
brand support or greater than expected competitive investment; (b) difficulties,
delays or the inability to build organizational capability, recruit and retain
skilled people, provide employees with opportunities to develop professionally,
provide employees with expanded responsibilities or roles and/or reward
employees for success; (c) difficulties, delays or unanticipated costs in
connection with the Company's plans to strengthen its international operations,
such as due to higher than anticipated levels of investment required to support
and build the Company's brands globally or less than anticipated results from
the Company's national and multi-national brands; (d) difficulties, delays or
unanticipated costs in connection with the Company's plans to improve its
operating margins and cash flows over time, such as difficulties, delays or the
inability to take actions intended to improve results in sales returns, cost of
goods sold, general and administrative expenses and/or in working capital
management; and/or (e) difficulties, delays or unanticipated costs in, or the
Company's inability to consummate, transactions to reduce and refinance its
debt, including difficulties, delays or the inability to refinance the remaining
balance of the 8 5/8% Senior Subordinated Notes in whole or in part. Factors
other than those listed above could also cause the Company'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,
the Company's websites or other websites referenced herein shall not be
incorporated by reference into this release.
Page 9
REVLON, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(dollars in millions, except per share data)
Three Months Ended Year Ended
December 31, December 31,
-------------------------- --------------------------
2006 2005 2006 2005
------------ ------------ ------------ ------------
(Unaudited)
Net sales..................................................... $ 378.9 $ 437.8 $ 1,331.4 $ 1,332.3
Cost of sales................................................. 141.3 158.0 545.5 508.1
------------ ------------ ------------ ------------
Gross profit................................................ 237.6 279.8 785.9 824.2
Selling, general and administrative expenses.................. 163.4 180.2 808.7 757.8
Restructuring costs and other, net............................ 4.1 - 27.4 1.5
------------ ------------ ------------ ------------
Operating income (loss)..................................... 70.1 99.6 (50.2) 64.9
------------ ------------ ------------ ------------
Other expenses (income):
Interest expense............................................. 39.4 35.3 148.8 130.0
Interest income.............................................. (0.1) (1.0) (1.1) (5.8)
Amortization of debt issuance costs.......................... 1.9 1.8 7.5 6.9
Foreign currency (gains) losses, net......................... (0.1) 1.9 (1.5) 0.5
Loss on early extinguishment of debt......................... 23.1 - 23.5 9.0
Miscellaneous, net........................................... 3.3 (2.0) 3.8 (0.5)
------------ ------------ ------------ ------------
Other expenses, net....................................... 67.5 36.0 181.0 140.1
------------ ------------ ------------ ------------
Income (loss) before income taxes............................. 2.6 63.6 (231.2) (75.2)
Provision for income taxes.................................... 8.1 (0.7) 20.1 8.5
------------ ------------ ------------ ------------
Net income (loss)............................................. $ (5.5) $ 64.3 $ (251.3) $ (83.7)
============ ============ ============ ============
Basic net income (loss) per common share.................... $ (0.01) $ 0.17 $ (0.62) $ (0.22)
============ ============ ============ ============
Diluted net income (loss) per common share.................. $ (0.01) $ 0.17 $ (0.62) $ (0.22)
============ ============ ============ ============
Weighted average number of common shares outstanding:.........
Basic....................................................... 414,100,845 374,609,360 404,542,722 374,060,951
============ ============ ============ ============
Diluted..................................................... 414,100,845 376,521,874 404,542,722 374,060,951
============ ============ ============ ============
REVLON, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
(dollars in millions)
December 31, December 31,
ASSETS 2006 2005
----------- ------------
Current assets:
Cash and cash equivalents....................................................................$ 35.4 $ 32.5
Trade receivables, net....................................................................... 207.8 282.2
Inventories.................................................................................. 186.5 220.6
Prepaid expenses and other................................................................... 58.3 56.7
----------- ------------
Total current assets........................................................................ 488.0 592.0
Property, plant and equipment, net............................................................ 115.3 119.7
Other assets.................................................................................. 142.4 146.0
Goodwill, net................................................................................. 186.2 186.0
----------- ------------
Total assets................................................................................$ 931.9 $ 1,043.7
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LIABILITIES AND STOCKHOLDERS' DEFICIENCY
Current liabilities:
Short-term borrowings........................................................................$ 9.6 $ 9.0
Accounts payable............................................................................. 95.1 133.1
Accrued expenses and other................................................................... 272.5 328.4
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Total current liabilities................................................................... 377.2 470.5
Long-term debt................................................................................ 1,501.8 1,413.4
Long-term pension and other post-retirement plan liabilities.................................. 175.7 162.4
Other long-term liabilities................................................................... 107.0 93.3
Total stockholders' deficiency................................................................ (1,229.8) (1,095.9)
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Total liabilities and stockholders' deficiency..............................................$ 931.9 $ 1,043.7
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REVLON, INC. AND SUBSIDIARIES
UNAUDITED ADJUSTED EBITDA RECONCILIATION
(dollars in millions)
Three Months Ended Year Ended
December 31, December 31,
------------------- --------------------
2006 2005 2006 2005
-------- -------- -------- ---------
(Unaudited) (Unaudited)
Reconciliation to net income (loss):
- ------------------------------------------------------------------------------
Net income (loss)..............................................................$ (5.5) $ 64.3 $ (251.3) $ (83.7)
Interest expense, net........................................................... 39.3 34.3 147.7 124.2
Amortization of debt issuance costs............................................. 1.9 1.8 7.5 6.9
Foreign currency gains, net..................................................... (0.1) 1.9 (1.5) 0.5
(Gain) loss on early extinguishment of debt..................................... 23.1 - 23.5 9.0
Miscellaneous, net.............................................................. 3.3 (2.0) 3.8 (0.5)
Provision for income taxes...................................................... 8.1 (0.7) 20.1 8.5
Depreciation and amortization................................................... 38.1 27.2 128.4 101.7
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Adjusted EBITDA................................................................$ 108.2 $ 126.8 $ 78.2 $ 166.6
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