Revlon Reports First Quarter 2021 Results
May 10, 2021
Company Releases First Quarter 2021 Results Reflecting Sequential Improvement in Top-Line with Continued Cost Reductions from the Company's 2020 Restructuring Program Driving Best First Quarter As Reported Operating Result in Five Years
Revlon Announces the Revlon Global Growth Accelerator that includes a Reinvestment Strategy to Strengthen Brands and Drive Long-Term Sustainable Margin and Revenue Growth
Revlon Global Growth Accelerator ("RGGA")
The major initiatives underlying the Revlon Global Growth Accelerator Program include:
- Strategic Growth: Boost organic sales growth behind our strategic pillars – brands, markets, and channels -- to deliver an approximate mid-single digit Compound Average Annual Growth Rate through 2023.
- Operating Efficiencies: Drive additional operational efficiencies and cost savings to fuel investments in revenue growth. Under RGGA, the Company expects to deliver annualized incremental cost reductions of approximately
$75 million -$95 million through 2023 to drive continued improvement in margin.
- Build Capabilities: Enhance capabilities and up-skill employees in order to evolve our culture to promote agility and deliver transformational change.
The Revlon Global Growth Accelerator will set the foundation for the Company’s long-term sustainable growth in both margin and revenue. Our focus is on our iconic brands of Revlon and
2021 First Quarter Results
The Company also released financial results for the quarter ended
- As Reported net sales were
$445.0 million in the first quarter of 2021, compared to$453.0 million during the prior-year period, a decline of$8.0 million , or 1.8%. The Company experienced double-digit net sales growth in itsElizabeth Arden and Fragrances segments. As Reported net sales include approximately$44 million of estimated negative impacts associated with the ongoing effects of the COVID-19 pandemic.
- Penetration of e-commerce net sales increased to approximately 13% of net sales versus 12% of net sales in the prior-year period. E-commerce net sales grew by approximately 5% across all regions, which includes double-digit top-line growth of its mass retail, professional, and prestige franchises in EMEA; its mass retail franchise in
Asia ; and in its professional and prestige franchises inNorth America .
- As Reported operating loss was
$12.7 million in the first quarter of 2021, compared to a loss of$186.2 million during the prior-year period. The lower operating loss was driven primarily by$124.3 million in lower impairment charges,$28.9 million in lower selling, general and administrative expenses (SG&A), driven in part by cost reductions associated with the Company's restructuring program, and$19.4 million lower restructuring charges. Despite continued COVID-19 headwinds, the Company was able to improve its gross margin by 70 basis points. Adjusted operating income in the first quarter of 2021 increased by$12.6 million to$1.8 million from a$10.8 million Adjusted operating loss in the prior-year period, which represents the highest first quarter Adjusted operating income achieved by the Company in five years.
- As Reported net loss was
$96.0 million in the first quarter of 2021, versus a$213.9 million net loss in the prior-year period. The lower net loss was driven primarily by improvements in the As Reported operating loss as described above, partially offset by a$48.4 million higher income tax provision and$10.5 million higher interest expense. Adjusted net loss was$83.3 million in the first quarter of 2021, compared to an Adjusted net loss of$64.7 million during the prior-year period.
- Adjusted EBITDA(a) in the first quarter of 2021 was
$38.2 million , versus$28.4 in the prior-year period, which represents an approximately 240 basis point improvement to Adjusted EBITDA margin over the prior-year period. The higher Adjusted EBITDA was driven primarily by the lower Adjusted operating loss.
- As of
March 31, 2021 , the Company had total liquidity of$129.6 million .
- On
May 7, 2021 , the Company closed an amendment to its 2016 asset-based revolving credit agreement withMidCap Funding IV Trust as the collateral agent and administrative agent, as successor in such capacity toCitibank, N.A . The amendment, among other things, extends the scheduled maturity of the revolving credit facility and the second-in, second-out term loan thereunder fromJune 8, 2023 toMay 7, 2024 , subject to certain springing maturities.
“I am pleased with the continued sequential improvement in our business as we continue to recover from COVID-19 while benefiting from the exhaustive restructuring strategies we first implemented in 2018. Our businesses in the prestige channel, including
"Additionally, our Revlon Global Growth Accelerator Program, which we officially announced externally today, is a holistic transformation program that is designed to set the foundation for long-term, sustainable margin and revenue growth. This will enable the Company to maximize the potential of our iconic brand portfolio with a focus on Revlon and
1 The results discussed include the following measures: |
First Quarter 2021 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).
|
|
Three Months Ended (Unaudited) |
||||||||||||||||||||
|
|
2021 |
|
2020 |
|
As Reported |
|
Adjusted (*) |
||||||||||||||
(USD millions, except per share data) |
|
As Reported |
|
Adjusted (*) |
|
As Reported |
|
Adjusted (*) |
|
% Change |
|
% Change |
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
$ |
445.0 |
|
|
$ |
445.0 |
|
|
$ |
453.0 |
|
|
$ |
457.2 |
|
|
(1.8 |
)% |
|
(2.7 |
)% |
Gross Profit |
|
253.8 |
|
|
259.1 |
|
|
255.2 |
|
|
264.5 |
|
|
(0.5 |
)% |
|
(2.0 |
)% |
||||
Gross Margin |
|
57.0 |
% |
|
58.2 |
% |
|
56.3 |
% |
|
57.9 |
% |
|
70bps |
|
30bps |
||||||
Operating Income (loss) |
|
$ |
(12.7 |
) |
|
$ |
1.8 |
|
|
$ |
(186.2 |
) |
|
$ |
(10.8 |
) |
|
93.2 |
% |
|
116.7 |
% |
Net Loss |
|
(96.0 |
) |
|
(83.3 |
) |
|
(213.9 |
) |
|
(64.7 |
) |
|
55.1 |
% |
|
(28.7 |
)% |
||||
Adjusted EBITDA |
|
|
|
38.2 |
|
|
|
|
28.4 |
|
|
|
|
34.5 |
% |
|||||||
Diluted (Loss) Income per Common Share |
|
$ |
(1.79 |
) |
|
$ |
(1.55 |
) |
|
$ |
(4.02 |
) |
|
$ |
(1.22 |
) |
|
55.5 |
% |
|
(27.0 |
)% |
(*) Refer to footnote (a) to this Earnings Release for a discussion and reconciliation of the Company's non-GAAP measures, including Adjusted |
Segment Results
The Company operates in four reporting segments: Revlon;
- 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'sElizabeth 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 itsElizabeth Arden branded retail stores and elizabetharden.com e-commerce website, in theU.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 , ElizabethArden 5th Avenue and Elizabeth Arden Green Tea inElizabeth 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; Cutex in nail care products; and Mitchum in anti-perspirant deodorants. 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 theU.S. ; and a hair color line under the Llongueras brand (licensed from a third party) that is sold in the mass retail channel, large volume retailers and other retailers, primarily inSpain .
- 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: (i) Juicy Couture (which are also sold direct-to-consumer on its juicycouturebeauty.com website),John Varvatos and AllSaints in prestige fragrances; (ii)Britney Spears ,Elizabeth Taylor ,Christina Aguilera ,Jennifer Aniston andMariah Carey in celebrity fragrances; and (iii) Curve,Giorgio Beverly Hills ,Ed Hardy , Charlie,Lucky Brand , ‹PS› (logo of former Paul Sebastian brand),Alfred Sung , Halston,Geoffrey Beene , and White Diamonds in mass fragrances.
|
|
Three Months Ended (Unaudited) |
||||||||||
|
|
|
||||||||||
|
|
As Reported |
|
As Reported |
||||||||
(USD millions) |
|
2021 |
|
2020 |
|
% Change |
|
XFX % Change |
||||
|
|
|
|
|
|
|
|
|
||||
Revlon |
|
$ |
162.0 |
|
$ |
181.8 |
|
(10.9 |
)% |
|
(13.9 |
)% |
|
|
112.2 |
|
95.2 |
|
17.9 |
% |
|
12.0 |
% |
||
Portfolio |
|
96.0 |
|
110.0 |
|
(12.7 |
)% |
|
(14.6 |
)% |
||
Fragrances |
|
74.8 |
|
66.0 |
|
13.3 |
% |
|
11.2 |
% |
||
Total |
|
$ |
445.0 |
|
$ |
453.0 |
|
(1.8 |
)% |
|
(5.0 |
)% |
|
|
|
|
|
|
|
|
|
||||
|
|
Three Months Ended (Unaudited) |
||||||||||
|
|
Segment Profit |
||||||||||
|
|
As Reported |
|
As Reported |
||||||||
(USD millions) |
|
2021 |
|
2020 |
|
% Change |
|
XFX % Change |
||||
|
|
|
|
|
|
|
|
|
||||
Revlon |
|
$ |
8.0 |
|
$ |
15.6 |
|
(48.7 |
)% |
|
(55.1 |
)% |
|
|
9.2 |
|
4.2 |
|
119.0 |
% |
|
85.7 |
% |
||
Portfolio |
|
13.1 |
|
7.2 |
|
81.9 |
% |
|
75.0 |
% |
||
Fragrances |
|
7.9 |
|
1.4 |
|
N.M. |
|
N.M. |
||||
Total |
|
$ |
38.2 |
|
$ |
28.4 |
|
34.5 |
% |
|
23.6 |
% |
|
|
|
|
|
|
|
|
|
Revlon Segment
Revlon segment net sales in the first quarter of 2021 were
Revlon segment profit in the first quarter of 2021 was
Elizabeth Arden Segment
Portfolio Segment
Portfolio segment net sales in the first quarter of 2021 were
Portfolio segment profit in the first quarter of 2021 was
Fragrances Segment
Fragrances segment net sales in the first quarter of 2021 were
Fragrances segment profit in the first quarter of 2021 was
Geographic
The following tables provide a comparative summary of the Company's
|
|
Three Months Ended (Unaudited) |
|
|
||||||||||||
(USD millions) |
|
2021 As Reported |
|
2020 As Reported |
|
As Reported % Change |
|
As Reported XFX % Change |
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
||||||
Revlon |
|
|
|
|
|
|
|
|
|
|
||||||
|
|
$ |
83.0 |
|
|
$ |
99.1 |
|
|
(16.2 |
)% |
|
(16.4 |
)% |
|
|
International |
|
79.0 |
|
|
82.7 |
|
|
(4.5 |
)% |
|
(10.8 |
)% |
|
|
||
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
$ |
28.4 |
|
|
$ |
21.4 |
|
|
32.7 |
% |
|
29.0 |
% |
|
|
International |
|
83.8 |
|
|
73.8 |
|
|
13.6 |
% |
|
7.0 |
% |
|
|
||
Portfolio |
|
|
|
|
|
|
|
|
|
|
||||||
|
|
$ |
63.5 |
|
|
$ |
70.8 |
|
|
(10.3 |
)% |
|
(11.0 |
)% |
|
|
International |
|
32.5 |
|
|
39.2 |
|
|
(17.1 |
)% |
|
(21.2 |
)% |
|
|
||
Fragrances |
|
|
|
|
|
|
|
|
|
|
||||||
|
|
$ |
51.3 |
|
|
$ |
42.2 |
|
|
21.6 |
% |
|
20.9 |
% |
|
|
International |
|
23.5 |
|
|
23.8 |
|
|
(1.3 |
)% |
|
(5.9 |
)% |
|
|
||
Total |
|
$ |
445.0 |
|
|
$ |
453.0 |
|
|
(1.8 |
)% |
|
(5.0 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
||||||
Total Net Sales Summary |
|
|
|
|
|
|
|
|
||||||||
|
|
$ |
226.2 |
|
|
$ |
233.5 |
|
|
(3.1 |
)% |
|
(3.9 |
)% |
|
|
International |
|
218.8 |
|
|
219.5 |
|
|
(0.3 |
)% |
|
(6.1 |
)% |
|
|
||
|
|
|
Revlon Segment
In
In International, Revlon segment net sales of
Elizabeth Arden Segment
In
In International,
Portfolio Segment
In
In International, Portfolio segment net sales of
Fragrances Segment
In
In International, Fragrances segment net sales of
Cash Flow
Net cash used in operating activities in 2021 was
Liquidity Update
As of
First Quarter 2021
Results Conference Call
The Company will host a conference call with members of the investment community today,
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-based 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 2021 |
Q1 2020 |
|||||
Net Loss Adjustments to EBITDA |
|||||||
|
(Unaudited) |
||||||
Non-Operating Items: |
|
||||||
Non-cash stock-based compensation expense |
$ |
3.1 |
|
$ |
2.4 |
|
|
Restructuring and related charges |
7.3 |
|
34.4 |
|
|||
Acquisition, integration and divestiture costs |
0.6 |
|
2.1 |
|
|||
Gain on divested assets |
— |
|
0.8 |
|
|||
Financial control remediation and sustainability actions and related charges |
0.2 |
|
2.1 |
|
|||
Excessive coupon redemption |
— |
|
4.2 |
|
|||
COVID-19 charges |
6.2 |
|
7.5 |
|
|||
Capital structure and related charges |
0.2 |
|
— |
|
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
(b) Segment profit is defined as income from continuing operations for each of the Company's Revlon,
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
|
|||||||
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS |
|||||||
(dollars in millions, except share and per share amounts) |
|||||||
|
|
|
|
||||
|
Three Months Ended |
||||||
|
2021 |
|
2020 |
||||
|
(Unaudited) |
||||||
|
|
|
|
||||
Net sales |
$ |
445.0 |
|
|
$ |
453.0 |
|
Cost of sales |
191.2 |
|
|
197.8 |
|
||
Gross profit |
253.8 |
|
|
255.2 |
|
||
Selling, general and administrative expenses |
260.5 |
|
|
289.4 |
|
||
Acquisition, integration and divestiture costs |
0.6 |
|
|
2.1 |
|
||
Restructuring charges and other, net |
5.4 |
|
|
24.8 |
|
||
Impairment charges |
— |
|
|
124.3 |
|
||
Loss on divested assets |
— |
|
|
0.8 |
|
||
Operating loss |
(12.7 |
) |
|
(186.2 |
) |
||
|
|
|
|
||||
Other expenses: |
|
|
|
||||
Interest expense, net |
58.9 |
|
|
48.4 |
|
||
Amortization of debt issuance costs |
8.7 |
|
|
4.0 |
|
||
Foreign currency losses, net |
3.3 |
|
|
16.6 |
|
||
Miscellaneous, net |
1.2 |
|
|
(4.1 |
) |
||
Other expenses |
72.1 |
|
|
64.9 |
|
||
|
|
|
|
||||
Loss from operations before income taxes |
(84.8 |
) |
|
(251.1 |
) |
||
Benefit from income taxes |
11.2 |
|
|
(37.2 |
) |
||
Net loss |
$ |
(96.0 |
) |
|
$ |
(213.9 |
) |
|
|
|
|
||||
Other comprehensive income (loss): |
|
|
|
||||
Foreign currency translation adjustments |
(13.2 |
) |
|
(5.2 |
) |
||
Amortization of pension related costs, net of tax |
3.5 |
|
|
2.5 |
|
||
Pension re-measurement, net of tax |
8.3 |
|
|
— |
|
||
Other comprehensive loss, net |
(1.4 |
) |
|
(2.7 |
) |
||
Total comprehensive loss |
$ |
(97.4 |
) |
|
$ |
(216.6 |
) |
|
|
|
|
||||
Basic and Diluted (loss) earnings per common share: |
$ |
(1.79 |
) |
|
$ |
(4.02 |
) |
|
|
|
|
||||
Weighted average number of common shares outstanding: |
|
|
|
||||
Basic |
53,653,449 |
|
|
53,167,453 |
|
||
Diluted |
53,653,449 |
|
|
53,167,453 |
|
|
|||||||
CONSOLIDATED CONDENSED BALANCE SHEETS |
|||||||
(dollars in millions) |
|||||||
|
|
|
|
||||
|
|
|
|
||||
|
2021 |
|
2020 |
||||
ASSETS |
|
|
|
||||
Current assets: |
|
|
|
||||
Cash and cash equivalents |
$ |
85.6 |
|
|
$ |
97.1 |
|
Trade receivables, net |
315.6 |
|
|
352.3 |
|
||
Inventories, net |
441.2 |
|
|
462.6 |
|
||
Prepaid expenses and other current assets |
141.7 |
|
|
134.4 |
|
||
Total current assets |
984.1 |
|
|
1,046.4 |
|
||
Property, plant and equipment, net |
335.6 |
|
|
352.0 |
|
||
Deferred income taxes |
23.6 |
|
|
25.7 |
|
||
|
563.2 |
|
|
563.7 |
|
||
Intangible assets, net |
419.5 |
|
|
430.8 |
|
||
Other assets |
104.9 |
|
|
109.1 |
|
||
Total assets |
$ |
2,430.9 |
|
|
$ |
2,527.7 |
|
|
|
|
|
||||
LIABILITIES AND STOCKHOLDERS' DEFICIENCY |
|
|
|
||||
Current liabilities: |
|
|
|
||||
Short-term borrowings |
$ |
0.3 |
|
|
$ |
2.5 |
|
Current portion of long-term debt |
107.2 |
|
|
217.5 |
|
||
Accounts payable |
195.6 |
|
|
203.3 |
|
||
Accrued expenses and other current liabilities |
402.7 |
|
|
420.9 |
|
||
Total current liabilities |
705.8 |
|
|
844.2 |
|
||
Long-term debt |
3,266.8 |
|
|
3,105.0 |
|
||
Long-term pension and other post-retirement plan liabilities |
196.7 |
|
|
212.4 |
|
||
Other long-term liabilities |
220.3 |
|
|
228.1 |
|
||
Total stockholders' deficiency |
(1,958.7 |
) |
|
(1,862.0 |
) |
||
Total liabilities and stockholders' deficiency |
$ |
2,430.9 |
|
|
$ |
2,527.7 |
|
|
|||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS |
|||||||
(dollars in millions) |
|||||||
|
Three Months Ended |
||||||
|
|
||||||
|
2021 |
|
2020 |
||||
CASH FLOWS FROM OPERATING ACTIVITIES: |
|
||||||
Net loss |
$ |
(96.0 |
) |
|
$ |
(213.9 |
) |
Adjustments to reconcile net loss to net cash used in operating activities: |
|
|
|
||||
Depreciation and amortization |
33.3 |
|
|
36.8 |
|
||
Foreign currency (gains) losses from re-measurement |
3.3 |
|
|
16.6 |
|
||
Amortization of debt discount |
0.4 |
|
|
0.4 |
|
||
Stock-based compensation amortization |
3.1 |
|
|
2.4 |
|
||
Impairment charges |
— |
|
|
124.3 |
|
||
Benefit from deferred income taxes |
1.7 |
|
|
(37.2 |
) |
||
Amortization of debt issuance costs |
8.7 |
|
|
4.0 |
|
||
Loss on divested assets |
— |
|
|
0.8 |
|
||
Pension and other post-retirement cost |
1.3 |
|
|
1.2 |
|
||
Paid-in-kind interest expense on the 2020 BrandCo Facilities |
4.6 |
|
|
— |
|
||
Change in assets and liabilities: |
|
|
|
||||
Decrease in trade receivables |
33.7 |
|
|
84.6 |
|
||
Decrease (increase) in inventories |
18.7 |
|
|
(42.5 |
) |
||
Increase in prepaid expenses and other current assets |
(8.4 |
) |
|
(23.3 |
) |
||
Increase in accounts payable |
2.8 |
|
|
14.9 |
|
||
Decrease in accrued expenses and other current liabilities |
(22.5 |
) |
|
(34.8 |
) |
||
Decrease in deferred revenue |
(1.3 |
) |
|
— |
|
||
Pension and other post-retirement plan contributions |
(13.7 |
) |
|
(3.6 |
) |
||
Purchases of permanent displays |
(5.8 |
) |
|
(7.0 |
) |
||
Other, net |
7.7 |
|
|
(1.3 |
) |
||
Net cash used in operating activities |
(28.4 |
) |
|
(77.6 |
) |
||
|
|
|
|
||||
CASH FLOWS FROM INVESTING ACTIVITIES: |
|
|
|
||||
Capital expenditures |
(0.7 |
) |
|
(1.8 |
) |
||
Net cash used in investing activities |
(0.7 |
) |
|
(1.8 |
) |
||
|
|
|
|
||||
CASH FLOWS FROM FINANCING ACTIVITIES: |
|
|
|
||||
Net decrease in short-term borrowings and overdraft |
(10.6 |
) |
|
(6.4 |
) |
||
Borrowings under the SISO Term Loan Facility |
100.0 |
|
|
— |
|
||
Net (repayments) borrowings under the Amended 2016 Revolving Credit Facility |
(59.3 |
) |
|
69.1 |
|
||
Borrowings under the 2021 Foreign Asset-Based Term Loan Facility |
75.0 |
|
|
— |
|
||
Repayments of the 2018 Foreign Asset-Based Term Facility |
(58.9 |
) |
|
— |
|
||
Repayments under the 2016 Term Loan Facility |
(2.3 |
) |
|
(4.5 |
) |
||
Payment of financing costs |
(11.8 |
) |
|
(0.3 |
) |
||
Tax withholdings related to net share settlements of restricted stock and RSUs |
(2.4 |
) |
|
(0.4 |
) |
||
Other financing activities |
(0.1 |
) |
|
(0.1 |
) |
||
Net cash provided by financing activities |
29.6 |
|
|
57.4 |
|
||
Effect of exchange rate changes on cash, cash equivalents and restricted cash |
(1.3 |
) |
|
(3.3 |
) |
||
Net decrease in cash, cash equivalents and restricted cash |
(0.8 |
) |
|
(25.3 |
) |
||
Cash, cash equivalents and restricted cash at beginning of period |
102.5 |
|
|
104.5 |
|
||
Cash, cash equivalents and restricted cash at end of period |
$ |
101.7 |
|
|
$ |
79.2 |
|
|
|
|
|
||||
Supplemental schedule of cash flow information: |
|
|
|
||||
Cash paid during the period for: |
|
|
|
||||
Interest |
$ |
64.6 |
|
|
$ |
62.9 |
|
Income taxes, net of refunds |
(1.0 |
) |
|
1.0 |
|
||
Supplemental schedule of non-cash investing and financing activities: |
|
|
|
||||
Paid-in-kind interest capitalized to the 2020 BrandCo Facilities |
4.6 |
|
|
— |
|
|
|||||||
EBITDA AND ADJUSTED EBITDA RECONCILIATION |
|||||||
(dollars in millions) |
|||||||
|
|
|
|
||||
|
Three Months Ended |
||||||
|
2021 |
|
2020 |
||||
|
(Unaudited) |
||||||
Reconciliation to net (loss) income: |
|
|
|
||||
Net (loss) income |
$ |
(96.0 |
) |
|
$ |
(213.9 |
) |
Interest expense, net |
58.9 |
|
|
48.4 |
|
||
Amortization of debt issuance costs |
8.7 |
|
|
4.0 |
|
||
Foreign currency losses, net |
3.3 |
|
|
16.6 |
|
||
Benefit from income taxes |
11.2 |
|
|
(37.2 |
) |
||
Depreciation and amortization |
33.3 |
|
|
36.8 |
|
||
Miscellaneous, net |
1.2 |
|
|
(4.1 |
) |
||
EBITDA |
$ |
20.6 |
|
|
$ |
(149.4 |
) |
Non-operating items: |
|
|
|
||||
Non-cash stock-based compensation expense |
3.1 |
|
|
2.4 |
|
||
Restructuring and related charges |
7.3 |
|
|
34.4 |
|
||
Acquisition, integration and divestiture costs |
0.6 |
|
|
2.1 |
|
||
Loss on divested assets |
— |
|
|
0.8 |
|
||
Financial control remediation and sustainability actions and related charges |
0.2 |
|
|
2.1 |
|
||
Impairment charges |
— |
|
|
124.3 |
|
||
Excessive coupon redemption |
— |
|
|
4.2 |
|
||
COVID-19 charges |
6.2 |
|
|
7.5 |
|
||
Capital structure and related charges |
0.2 |
|
|
— |
|
||
Adjusted EBITDA |
$ |
38.2 |
|
|
$ |
28.4 |
|
|
|||||||
SEGMENT PROFIT, ADJUSTED EBITDA AND ADJUSTED OPERATING LOSS RECONCILIATION |
|||||||
(dollars in millions) |
|||||||
|
|
|
|
||||
|
Three Months Ended |
||||||
|
2021 |
|
2020 |
||||
|
(Unaudited) |
||||||
Segment Profit: |
|
|
|
||||
Revlon |
$ |
8.0 |
|
|
$ |
15.6 |
|
|
9.2 |
|
|
4.2 |
|
||
Portfolio |
13.1 |
|
|
7.2 |
|
||
Fragrances |
7.9 |
|
|
1.4 |
|
||
Total Segment Profit/Adjusted EBITDA |
$ |
38.2 |
|
|
$ |
28.4 |
|
|
|
|
|
||||
Reconciliation to (loss) income from continuing operations before income taxes: |
|
|
|
||||
(Loss) income from continuing operations before income taxes |
$ |
(84.8 |
) |
|
$ |
(251.1 |
) |
Interest expense, net |
58.9 |
|
|
48.4 |
|
||
Amortization of debt issuance costs |
8.7 |
|
|
4.0 |
|
||
Foreign currency losses, net |
3.3 |
|
|
16.6 |
|
||
Miscellaneous, net |
1.2 |
|
|
(4.1 |
) |
||
Operating income (loss) |
(12.7 |
) |
|
(186.2 |
) |
||
|
|
|
|
||||
Non-operating items: |
|
|
|
||||
Restructuring and related charges |
7.3 |
|
|
34.4 |
|
||
Acquisition, integration and divestiture costs |
0.6 |
|
|
2.1 |
|
||
Loss on divested assets |
— |
|
|
0.8 |
|
||
Financial control remediation and sustainability actions and related charges |
0.2 |
|
|
2.1 |
|
||
Impairment charges |
— |
|
|
124.3 |
|
||
Excessive coupon redemption |
— |
|
|
4.2 |
|
||
COVID-19 charges |
6.2 |
|
|
7.5 |
|
||
Capital structure and related charges |
0.2 |
|
|
— |
|
||
Adjusted Operating income (loss) |
1.8 |
|
|
(10.8 |
) |
||
Non-cash stock-based compensation expense |
3.1 |
|
|
2.4 |
|
||
Depreciation and amortization |
33.3 |
|
|
36.8 |
|
||
|
|
|
|
||||
Adjusted EBITDA |
$ |
38.2 |
|
|
$ |
28.4 |
|
|
|||||||
ADJUSTED NET SALES RECONCILIATION |
|||||||
(dollars in millions) |
|||||||
|
|
|
|
||||
|
Three Months Ended |
||||||
|
2021 |
|
2020 |
||||
|
(Unaudited) |
||||||
Segment |
|
|
|
||||
Revlon |
$ |
162.0 |
|
|
$ |
181.8 |
|
|
112.2 |
|
|
95.2 |
|
||
Portfolio |
96.0 |
|
|
110.0 |
|
||
Fragrances |
74.8 |
|
|
66.0 |
|
||
Total Segment |
$ |
445.0 |
|
|
$ |
453.0 |
|
|
|
|
|
||||
Non-operating items: |
|
|
|
||||
Excessive coupon redemption |
— |
|
|
4.2 |
|
||
Total Adjusted |
$ |
445.0 |
|
|
$ |
457.2 |
|
|
|||||||
ADJUSTED GROSS PROFIT RECONCILIATION |
|||||||
(dollars in millions) |
|||||||
|
|
|
|
||||
|
Three Months Ended |
||||||
|
2021 |
|
2020 |
||||
|
(Unaudited) |
||||||
Gross Profit |
$ |
253.8 |
|
|
$ |
255.2 |
|
Non-operating items: |
|
|
|
||||
COVID-19 charges |
5.3 |
|
|
5.1 |
|
||
Excessive coupon redemption |
— |
|
|
4.2 |
|
||
Adjusted Gross Profit |
$ |
259.1 |
|
|
$ |
264.5 |
|
|
|
|
|
||||
|
|
|
|
|
|||||||
ADJUSTED NET INCOME (LOSS) AND ADJUSTED DILUTED INCOME (LOSS) PER SHARE RECONCILIATION |
|||||||
(dollars in millions, except share and per share amounts) |
|||||||
|
|
|
|
||||
|
Three Months Ended |
||||||
|
2021 |
|
2020 |
||||
|
(Unaudited) |
||||||
Reconciliation to net loss and diluted loss per share: |
|
|
|
||||
Net (loss) income |
$ |
(96.0 |
) |
|
$ |
(213.9 |
) |
|
|
|
|
||||
Non-operating items (after-tax): |
|
|
|
||||
Restructuring and related charges |
6.8 |
|
|
26.2 |
|
||
Acquisition, integration and divestiture costs |
0.6 |
|
|
1.6 |
|
||
Loss on divested assets |
— |
|
|
— |
|
||
Financial control remediation and sustainability actions and related charges |
0.2 |
|
|
1.6 |
|
||
Impairment charges |
— |
|
|
110.9 |
|
||
Excessive coupon redemption |
— |
|
|
3.2 |
|
||
COVID-19 charges |
4.9 |
|
|
5.7 |
|
||
Capital structure and related charges |
0.2 |
|
|
— |
|
||
Valuation allowance on net federal deferred tax assets |
— |
|
|
— |
|
||
Adjusted net loss |
$ |
(83.3 |
) |
|
$ |
(64.7 |
) |
|
|
|
|
||||
Net (loss) income: |
|
|
|
||||
Diluted (loss) income per common share |
(1.79 |
) |
|
(4.02 |
) |
||
Adjustment to diluted (loss) income per common share |
0.24 |
|
|
2.80 |
|
||
Adjusted diluted (loss) income per common share |
$ |
(1.55 |
) |
|
$ |
(1.22 |
) |
|
|
|
|
||||
|
|
|
|
||||
Diluted |
53,653,449 |
|
|
53,167,453 |
|
|
|||||||
FREE CASH FLOW RECONCILIATION |
|||||||
(dollars in millions) |
|||||||
|
|
|
|
||||
|
Three Months Ended |
||||||
|
2021 |
|
2020 |
||||
|
(Unaudited) |
||||||
Reconciliation to net cash used in operating activities: |
|
|
|
||||
Net cash used in operating activities |
$ |
(28.4 |
) |
|
$ |
(77.6 |
) |
Less capital expenditures |
(0.7 |
) |
|
(1.8 |
) |
||
|
|
|
|
||||
Free cash flow |
$ |
(29.1 |
) |
|
$ |
(79.4 |
) |
View source version on businesswire.com: https://www.businesswire.com/news/home/20210510005241/en/
Investor Relations:
212-527-4040 or investor.relations@revlon.com
Source: Revlon