•

Net sales of $347.6 million versus $570.2 million in the prior-year period.  Revlon, Inc. estimates that COVID-19 contributed approximately $214 million to the $222.6 million total net sales decline versus the prior-year period. See “COVID-19 Impact on Revlon, Inc.’s Business (Preliminary and Unaudited)” below. Excluding the $214 million negative impact from the COVID-19 pandemic and $12 million of negative impact from foreign exchange, Q2 2020 net sales would have been essentially flat compared to Q2 2019;

•

Operating loss of between $39.0 million and $89.0 million (with the variance being due to potential impairment charges estimated to range from $0 and $50.0 million, which impairment assessment is ongoing), versus a $9.4 million operating loss in the prior-year period, driven in part by the COVID-19 impacts described above; and

•

Adjusted EBITDA (see definition below) of $45.4 million versus $47.0 million in the prior-year period.

---

outside the U.S.); (ii) approximately $50.7 million in available borrowing capacity under the 2016 U.S. ABL Facility (as defined below), which had approximately $249.5 million drawn at such date; (iii) approximately $30 million in available borrowing capacity under its 2019 Senior Line of Credit Facility between Products Corporation and MacAndrews & Forbes Group, LLC, which had no borrowings at such date; and less (iv) approximately $3.5 million of outstanding checks. Under the 2016 U.S. ABL Facility, as the Company’s consolidated fixed charge coverage ratio was expected to be greater than 1.0 to 1.0 as of June 30, 2020, all of the approximately $50.7 million of remaining availability under the 2016 U.S. ABL Facility was available as of such date.

The Company refers to the Asset-Based Revolving Credit Agreement, dated as of September 7, 2016 (as thereafter amended from time to time), by and among the Company, Revlon, Inc., certain local borrowing subsidiaries from time to time party thereto, certain lenders and issuing lenders party thereto and Citibank, N.A., as administrative agent, collateral agent, issuing lender and swingline lender as the “2016 U.S. ABL Facility”.

Revlon Inc., after giving effect to the transactions contemplated by this Offering Memorandum, expects to have sufficient cash to continue its and the Company’s operations for at least the next twelve months.

COVID-19 Impact on Revlon, Inc.’s Business (Preliminary and Unaudited)

Adjusted EBITDA is a non-GAAP financial measure. As used in this Current Report on a preliminary unaudited basis, Revlon, Inc. defines Adjusted EBITDA as operating income before interest, taxes, depreciation, amortization, gains/losses on foreign currency fluctuations, gains/losses on the early extinguishment of debt and miscellaneous expenses, as well as the impact of non-cash stock-based compensation expense and certain other non-operating items that are not directly attributable to Revlon, Inc.'s underlying operating performance. Revlon, Inc. has not yet finalized its impairment charges for fiscal quarter ended June 30, 2020, which Revlon, Inc. preliminarily estimates could be in the range of approximately $0 and $50 million. Accordingly, Revlon, Inc. is presenting the reconciliations below based on that assumed range of impairment charges.  Upon completion of such assessment, Revlon, Inc.’s actual impairment charges for the fiscal quarter ended June 30, 2020 could be greater than such estimates. For the fiscal quarter ended June 30, 2020, the following table reconciles Revlon, Inc.’s preliminary unaudited operating loss to Adjusted EBITDA:

Revlon, Inc.’s management uses Adjusted EBITDA as an operating performance 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 Revlon, Inc.’s business operations, financial performance and overall liquidity; (ii) facilitate management's internal comparisons of Revlon, Inc.’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 Revlon, Inc.’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 Adjusted EBITDA is useful to investors to provide them with disclosure of Revlon, Inc.’s operating results on the same basis as that used by management. Management believes that Adjusted EBITDA provides useful information to investors about the performance of Revlon, Inc.’s overall business because such measures eliminate the effects of certain charges that are not directly attributable to Revlon, Inc.’s underlying operating performance. Additionally, management believes that providing Adjusted EBITDA enhances the comparability for investors in assessing Revlon, Inc.’s financial reporting.

 Accordingly, Revlon, Inc. believes that the presentation of Adjusted EBITDA, when used in conjunction with GAAP financial measures, is a useful financial analytical measure that is used by management, as described above, and therefore can assist investors in assessing Revlon, Inc.’s financial condition, operating performance and underlying strength. Adjusted EBITDA should not be considered in isolation or as a substitute for its most directly comparable 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 Adjusted EBITDA differently. Also, while Adjusted EBITDA, as used in this Current Report, is defined differently than Adjusted EBITDA for Revlon, Inc.’s credit agreements and indentures, certain financial covenants in its borrowing arrangements are tied to similar financial measures. Adjusted EBITDA should be considered in conjunction with Revlon, Inc.’s financial statements and related footnotes filed with the SEC.

Certain Additional Information

The Company’s non-guarantor subsidiaries, in the aggregate, excluding intercompany liabilities, would have had:

Additional Risk Factor

The ongoing COVID-19 pandemic has had a significant adverse effect on the Company’s business around the globe, which could continue for the foreseeable future. After China began reporting on the spread of the COVID-19 coronavirus in early 2020, there have been approximately 15 million cases of the COVID-19 coronavirus globally and it has contributed to over a half a million deaths worldwide, according to data from the World Health Organization. The COVID-19 pandemic has adversely impacted net sales in all major commercial regions that are important to the Company’s business.  COVID-19’s adverse impact on the global economy has contributed to significant and extended quarantines, stay-at-home orders and other social distancing measures; closures and bankruptcies of retailers, beauty salons, spas, offices and manufacturing facilities; increased levels of unemployment; travel and transportation restrictions leading to declines in consumer traffic in key shopping and tourist areas around the globe; and import and export restrictions. These adverse economic conditions have resulted in the general slowdown of the global economy, in turn contributing to a significant decline in net sales within each of the Company’s reporting segments and regions.

The ongoing COVID-19 pandemic has caused the Company and various of its key third party suppliers to temporarily close one or more of their manufacturing facilities. While these closures have not yet had an adverse impact on the Company’s ability to operate and fulfill orders, if the COVID-19 restrictions continue for a period longer than the period for the re-opening of retailers, such restrictions could lead to a shortage of raw materials, components and finished products, which in turn could cause  the Company to be unable to ship products to retailers and consumers and continue to adversely impact the Company’s net sales. The continuation of any of the foregoing events or other unforeseen consequences of the COVID-19 pandemic would continue to significantly adversely affect the Company’s business, results of operations, financial condition and cash flows.

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.