UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported):
June 2, 2006 (June 1, 2006)
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 Jurisdiction (Commission (I.R.S. Employer
of 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
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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 1.01. ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT.
On June 1, 2006, Revlon, Inc. ("Revlon") entered into a fifth amendment to
its Investment Agreement, dated as of February 20, 2004 (the "Fifth Amendment to
Investment Agreement"), with MacAndrews & Forbes Holdings Inc. (together with
its affiliates, "M&F") to facilitate Revlon's plans to issue $75 million of
equity by March 31, 2007, rather than by June 30, 2006, as was
previously-announced.
Pursuant to Revlon's intention to conduct the $75 million equity issuance
on or before March 31, 2007, the Fifth Amendment to Investment Agreement extends
M&F's back-stop of the $75 million equity issuance from June 30, 2006 until
March 31, 2007.
A copy of the Fifth Amendment to Investment Agreement is attached hereto as
Exhibit 10.1 and its terms are incorporated by reference herein.
ITEM 7.01. REGULATION FD DISCLOSURE.
On June 2, 2006, Revlon issued a press release (the "Press Release")
regarding, among other things, the Company's current expectation as to its
outlook for 2006 and beyond, the status of its Vital Radiance and Almay brand
initiatives, as well as its intent to defer its $75 million equity offering to
later in 2006 or in early 2007 and to defer consideration of the
previously-announced proposed refinancing of its current credit facility.
A copy of the Press Release is attached hereto as Exhibit 99.1 and is
incorporated by reference herein.
ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS.
(c) Exhibits
Exhibit No. Description
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10.1 Fifth Amendment to Investment Agreement, dated
June 1, 2006.
99.1 Press Release, dated June 2, 2006.
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 and Chief Legal Officer
Date: June 2, 2006
EXHIBIT INDEX
Exhibit No. Description
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10.1 Fifth Amendment to Investment Agreement, dated June
1, 2006.
99.1 Press Release, dated June 2, 2006.
Exhibit 10.1
FIFTH AMENDMENT TO INVESTMENT AGREEMENT
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THIS FIFTH AMENDMENT TO INVESTMENT AGREEMENT (this
"Amendment") is made this 1st day of June 2006 by and between Revlon, Inc.,
a Delaware corporation (the "COMPANY"), and MacAndrews & Forbes Holdings Inc.
(formerly known as Mafco Holdings Inc.), a Delaware corporation (the
"INVESTOR").
W I T N E S S E T H:
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WHEREAS, the parties have entered into an Investment Agreement
dated February 20, 2004 (as amended, the "Investment Agreement"); and
WHEREAS, the parties have determined to further amend the
Investment Agreement pursuant to Section 9.6 thereof, as provided herein.
NOW, THEREFORE, in consideration of the premises and the
mutual covenants and agreements contained in this Amendment, the parties hereto
hereby agree as follows:
Section 1. Definitions. Capitalized terms used herein and not
defined herein shall have the meaning ascribed to such terms in the Investment
Agreement.
Section 2. Amendments.
2.1 Extension of Back-stop of Additional Offerings. Section
5A.1 of the Investment Agreement is amended by deleting the phrase "June 30,
2006" and substituting the phrase "March 31, 2007" in lieu thereof.
Section 3. Miscellaneous.
3.1 Ratification of Investment Agreement. As modified hereby,
the Investment Agreement and its terms and provisions are hereby ratified and
confirmed for all purposes and in all respects.
3.2 Counterparts. This Amendment may be executed in two or more
counterparts, which may be by facsimile, each of which will be deemed an
original but all of which together will constitute one and the same instrument.
All such counterparts will be deemed an original, will be construed together and
will constitute one and the same instrument.
3.3 Headings. The headings in this Amendment are for reference
purposes only and will not in any way affect the meaning or interpretation of
this Amendment.
3.4 Governing Law. This Amendment will be governed by and
construed in accordance with the laws of the State of New York without regard to
any choice of law or conflict of law provision or rule that would cause the
application of the laws of any jurisdiction other than the State of New York.
Any legal or equitable action or proceeding arising out of or in connection with
this Amendment will be brought only in the courts of the State of New York, in
the County and City of New York or of the United States District Court for the
Southern District of New York, and by execution and delivery of this Amendment,
each of the parties hereby irrevocably accepts for itself and in respect of its
property, generally and unconditionally, the exclusive jurisdiction of the
aforesaid courts. Each of the parties hereby irrevocably waives any objection
which it may now or hereafter have to laying of jurisdiction or venue of any
actions or proceedings arising out of or in connection with this Amendment or in
any certificate, report or other instrument delivered under or pursuant to any
term of this Amendment brought in the courts referred to above and hereby
further irrevocably waive and agree not to plead or claim in any such court that
any such action or proceeding has been brought in an inconvenient forum. Each of
the parties further agrees that the mailing by certified or registered mail,
return receipt requested, of any process required by any such court will
constitute valid and lawful service of process against it, without necessity for
service by any other means provided by statute or rule of court. Each of the
parties hereto hereby irrevocably waives any and all right to trial by jury in
any legal proceeding arising out of or related to this Amendment or the
transactions contemplated hereby.
[Execution Page Follows]
IN WITNESS WHEREOF, the parties have duly executed this Amendment
as of the date first above written.
REVLON, INC.
By: /s/ Robert K. Kretzman
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Name: Robert K. Kretzman
Title: Executive Vice President,
Chief Legal Officer
MACANDREWS & FORBES HOLDINGS
INC. (f/k/a Mafco Holdings Inc.)
By: /s/ Paul G. Savas
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Name: Paul G. Savas
Title: Executive Vice President - Finance
Exhibit 99.1
FOR IMMEDIATE RELEASE
Revlon Updates Outlook For 2006 And Beyond
Provides Status of Vital Radiance and Almay Brand Initiatives
and Capital Structure Plans
New York, June 2, 2006 - Revlon, Inc. (NYSE:REV) today announced updates to its
outlook for 2006 and beyond and provided an update on its Vital Radiance and
Almay initiatives as well as its capital structure plans. In making the
announcements, the Company indicated that it expects strong revenue growth in
2006, although this growth is now expected to be lower than previously planned.
The Company indicated that its revised revenue outlook, while still strong,
reflects less robust growth from Vital Radiance and Almay due to stepped up
competitive activity, as well as less effectiveness from certain of the
Company's revenue driving actions. The Company indicated that it is continuing
to take important and appropriate steps intended to create long-term value and
build its brands, including continuing to invest in its brand initiatives, while
continuing to take appropriate and aggressive actions to reduce costs. The
Company noted that it believes Vital Radiance is a compelling consumer
proposition and will work with its retail partners to optimize the new brand's
productivity and retail presentation, which could result in the reconfiguration
or reduction of the Vital Radiance retail display space in certain retailers.
Revlon indicated that, given its revised revenue outlook, it now expects
Adjusted EBITDA(1) will be at or below 2005 levels, with a significant impact on
the second quarter of this year. Adjusted EBITDA is a non-GAAP measure, which is
defined in the footnote to this press release.
The Company also announced that it intends to defer its $75 million equity
offering to later in 2006 or early 2007 and will defer consideration of the
previously-announced proposed refinancing of its current credit facility. The
Company's existing revolving credit facility and term loan expire in July 2009
and July 2010, respectively. To ensure the Company raises the planned $75
million in equity, MacAndrews & Forbes, Revlon's principal shareholder, has
agreed to extend its backstop until the consummation of such offering. In
addition, as previously announced, the $87 million MacAndrews & Forbes line of
credit will remain available to the Company through the completion of the $75
million equity issuance. MacAndrews & Forbes, Revlon's principal shareholder,
stated, "We continue to believe in the long-term value of the Revlon business
and its brands and, as a result, we have extended our backstop support."
In terms of the Company's longer-term outlook, Revlon indicated that it will
continue to invest to support and build its brands, while continuing to focus
over the long-term on improving its margin structure through the Company's
ongoing productivity initiatives. These include: (i) reducing cost of goods sold
through, among other things, ongoing value analysis, strategic sourcing and
package rationalization activities; (ii) reducing returns though product
lifecycle management and promotional redesign initiatives, among other actions;
and (iii) reducing costs in other areas via strategic sourcing and aggressive
management of discretionary spending. The Company indicated that it continues to
target a significant improvement in its operating profit margin over time, but
that it no longer expects a 12% operating margin by the end of 2008, despite
good progress being made in cost of goods and administrative expenses.
Commenting on the announcements, Revlon President and CEO Jack Stahl stated,
"Our initiatives are delivering significant incremental revenue growth in 2006,
although they are requiring significant levels of investment to build consumer
awareness and trial--particularly of Vital Radiance--due in part to the
heightened competitive environment. We believe that these investments, along
with our other actions to build the value of our brands, strengthen our retail
relationships and reduce costs, will benefit the value of our Company over
time."
The Company will host a conference call with members of the investment community
on June 2, 2006 at 12:00 p.m. EDT to discuss this release. Access to the call is
available to the public at www.revloninc.com.
About Revlon
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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. Web sites
featuring current product and promotional information can be reached at
www.revlon.com, www.almay.com, www.vitalradiance.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), Vital
Radiance(R), Ultima(R), Charlie(R), Flex(R), and Mitchum(R).
Investor Relations Contact: Media Contact:
Maria A. Sceppaguercio Scott Behles
(212) 527-5230 (212) 527-4718
Footnote to Press Release
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(1)Adjusted EBITDA is a non-GAAP financial measure 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, which 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.
Forward-Looking Statements
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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. 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 the forward-looking information to reflect actual
results of operations, changes in financial condition, changes in estimates,
expectations or assumptions, changes in general economic, industry or cosmetic
category conditions or other circumstances arising and/or existing since the
preparation of this press release or to reflect the occurrence of any
unanticipated events. Such forward-looking statements include, without
limitation, the Company's beliefs, expectations and estimates about (i) its
future growth and profitability, including that it continues to expect to
achieve strong revenue growth in 2006; stepped up competitive activity and less
effectiveness from certain revenue driving actions contributing to lower than
planned revenue growth; Adjusted EBITDA being at or below 2005 levels, including
a significant impact on second quarter Adjusted EBITDA; and its plans to create
long-term value over time; (ii) its plans to continue to take steps to build its
brands, including its belief that Vital Radiance is a compelling consumer
proposition and continuing to invest in its brand initiatives and to work with
its retail partners on optimizing the productivity and retail presentation of
Vital Radiance, which could result in the reconfiguration or reduction of the
new brand's retail display space in certain retailers; (iii) its plans to
continue taking appropriate and aggressive actions to reduce costs; (iv) its
plans to complete the $75 million equity issuance and consider the
previously-announced proposed refinancing of its current credit facility and the
timing thereof; and (v) its plans to significantly improve its operating profit
margin over time through its ongoing productivity initiatives. 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 for
the year ended December 31, 2005, and the Company's Quarterly Reports on Form
10-Q and Current Reports on Form 8-K that it files with the SEC during 2006
(which may be viewed on the SEC's Web site at http://www.sec.gov or on the
Company's Web site at http://www.revloninc.com), as well as reasons including
difficulties, delays or the inability of the Company to (i) achieve its growth
and profitability objectives, including less that anticipated revenue growth or
a decrease in revenues and/or Adjusted EBITDA, less than anticipated results
from the Company's Vital Radiance and Almay brand initiatives, such as less than
expected retailer or consumer acceptance of such products or less than expected
effectiveness of the marketing programs related to these initiatives or a
decrease in sales of the Company's other products; (ii) build its brands, such
as less than anticipated retailer acceptance of the Company's plans to optimize
the productivity and retail presentation of Vital Radiance, such as greater than
anticipated reduction of Vital Radiance retail display space; (iii) reduce
costs, such as higher than anticipated costs due to continued increased
competitive activity; (iv) consummate the $75 million equity issuance or the
previously-announced proposed refinancing of its current credit facility, in
whole or in part; and/or (v) achieve its operating profit margin improvements
over time, such as cost-savings initiatives being less effective than planned.
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 Web sites or other Web sites referenced herein shall not
be incorporated by reference into this release.