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 ------------ February 18, 2004 (February 18, 2004) ----------------------------------------------------------------------- Date of Report (Date of earliest event reported) Revlon, Inc. ----------------------------------------------------------------------- (Exact Name of Registrant as Specified in its Charter) Delaware 1-11178 13-3662955 -------------------- ------------------------ ------------------------- (State or Other (Commission File No.) (I.R.S. Employer Jurisdiction of Identification Incorporation) No.) 237 Park Avenue New York, New York 10017 ----------------------------------- --------------------------------- (Address of Principal (Zip Code) Executive Offices) (212) 527-4000 ----------------------------------------------------------------------- (Registrant's telephone number, including area code) None ----------------------------------------------------------------------- (Former Name or Former Address, if Changed Since Last Report)
ITEM 9. REGULATION FD DISCLOSURE In connection with a confidentiality agreement, dated as of January 13, 2004, between Revlon, Inc. (the "Company") and Fidelity Management & Research Co. ("Fidelity"), and the consideration by Fidelity of the transactions contemplated by the Support Agreement executed by Fidelity and the Company on February 12, 2004, the Company disclosed certain material, non-public information (the "Presentation Information") to Fidelity. The terms of the Confidentiality Agreement expressly required Fidelity to maintain the Presentation Information as confidential information and not to disclose it or use it other than in connection with Fidelity's evaluation of the debt reduction transactions. The Presentation Information provided to Fidelity included management's forecasts, projections, estimates, objectives, vision, plans, strategies, beliefs, destination, expectations, records and certain historical information regarding the Company. Portions of the Presentation Information were prepared by the Company based upon, among other things, the anticipated future results of operation of the Company after giving affect to the implementation of various aspects of its strategic plan. The Presentation Information is divided into the following major components: (i) the Company's historical financial performance, including its 2003 forecasted results as of the date of the presentation, which occurred on January 14, 2004; (ii) the Company's long-term vision, referred to in the Presentation Information as its "Success Journey"; (iii) a long-term look at what the Company referred to in the Presentation Information as its "Destination Model", being the Company's longer term target for various components of its income statement, including an arithmetic application of the "Destination Model" margins to certain aspects of the Company's 2004 plan profit and loss statement; (iv) a breakout of assumed growth drivers of the Company's 2004 plan and the Company's estimates of its financial performance during 2004, including gross sales, net sales, operating income, and adjusted EBITDA; (v) the "Basis of Presentation", "Guiding Principles" and other assumptions regarding the Company's category, market share and consumption growth; (vi) the assumed potential margin improvements over time from various "transformation initiatives", including improving in-store merchandising; redesigning the Company's promotional process, reducing the Company's cost of goods sold, improving the Company's product development processes, introduction and lifecycle management, improving the Company's international supply chain and improving market effective innovation which entails strategic product development, marketing and advertising; (vii) the Company's estimate of the impact of various key initiatives (value analysis, packaging rationalization, direct sourcing, indirect sourcing, SKU rationalization and demand/supply planning) on its 2003 financial performance and on its plan for 2004 and 2005; (viii) the Company's estimate of the potential impact of certain growth initiatives on its 2004 plan gross sales and operating income for its international business and on gross sales for its North America business; (ix) certain aspects of the Company's financial performance over the 2000 to 2003 period; (x) quantification of growth plan charges and estimated benefits; and (xi) a reconciliation of adjusted EBITDA to reported adjusted EBITDA for 2000, 2001, 2002 and 2003 (forecasted), as well as an adjusted EBITDA bridge reconciling 2003 (forecasted) to 2004 (projected), in each case with various adjustments. 2
As certain financial information included within the Presentation Information consisted of non-GAAP amounts, such non-GAAP amounts are reconciled to the Company's most directly comparable GAAP measures in the accompanying financial tables beginning on page 32 et. seq. (the "Reconciliation Information"). Such non-GAAP measures include Adjusted EBITDA (See "Basis of Presentation") as well as ongoing operations. As stated in the "Basis of Presentation", the Company believes that Adjusted EBITDA is useful in understanding the financial operating performance and underlying strength of the Company's business, excluding the effects of certain factors, including gains/losses on foreign currency transactions, gains/losses on the sale of assets, miscellaneous expenses and interest, taxes, depreciation, and amortization, and thus the Company believes that Adjusted EBITDA is a financial metric that can assist the Company and investors in assessing the Company's financial operating performance and liquidity. Similarly, the Company believes that information presented on an "ongoing operations" basis, which excludes the disposition of brands and businesses, restructuring, additional consolidation costs (primarily associated with the closing of the Company's Phoenix and Canada facilities), executive severance and expenses related to the acceleration of aspects of the implementation of the Company's stabilization and growth phase of its plan, is useful to the Company and investors in understanding the Company's financial operating performance and underlying strength of its business without the impact of such items. 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 IN THE PRESENTATION INFORMATION. ACCORDINGLY, THE COMPANY DOES NOT INTEND TO UPDATE OR OTHERWISE REVISE THE PRESENTATION INFORMATION PROVIDED TO FIDELITY 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 THE PRESENTATION INFORMATION OR TO REFLECT THE OCCURRENCE OF ANY UNANTICIPATED EVENTS. FURTHER, THE COMPANY DOES NOT INTEND TO UPDATE OR REVISE THE PRESENTATION INFORMATION PROVIDED TO FIDELITY TO REFLECT CHANGES IN GENERAL ECONOMIC, INDUSTRY OR COSMETICS CATEGORY CONDITIONS. The Presentation Information provided to Fidelity was not prepared with a view toward general use, but rather was prepared for the limited purpose of providing information to Fidelity at a point in time to enable it to evaluate its participation in possible debt reduction transactions. Statements made in the Presentation Information which are not historical are forward looking statements and are based on estimates, objectives, vision, projections, forecasts, plans, strategies, beliefs, destinations and expectations of Revlon's management, and thus are subject to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The Company's actual results may differ materially from such forward looking statements for a number of reasons, including, without limitation, those set forth in the Company's filings with the Securities and Exchange Commission, including its Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. 3
The data contained in the Presentation Information was provided as of January 14, 2004 and represented the Company's then forecasted financial results for the fiscal year ended December 31, 2003. For more recent information concerning the Company's actual financial results for the fiscal year ended December 31, 2003, please see the Company's earnings release issued on February 12, 2004, as filed with the SEC on Form 8-K on the same date. A copy of the Presentation Information is furnished herewith as Exhibit 99.1. Exhibit No. Description ----------- ----------- Exhibit 99.1 Presentation Information and Reconciliation Information. 4
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, General Counsel and Chief Legal Officer Date: February 18, 2004 EXHIBIT INDEX Exhibit No. Description ----------- ----------- Exhibit 99.1 Presentation Information and Reconciliation Information. 5
BASIS OF PRESENTATION ================================================================================ The data contained herein are both audited and unaudited and have been prepared from the Company's internal and external reporting information. "F" denotes forecast; "P" denotes plan or projected; "E" denotes estimated. Certain of the data are presented on an "ongoing" basis, unless otherwise noted, and exclude (i) the disposition of brands or businesses, (ii) restructuring, (iii) additional consolidation costs, primarily associated with the closing of the Phoenix and Canada facilities and (iv) executive severance. In addition, certain of the data presented, where indicated, also exclude expenses related to the acceleration of aspects of the implementation of the stabilization and growth phase of the Company's plan. Ongoing operations is unaudited and a non-GAAP measure that the Company believes is useful in understanding the financial operating performance and underlying strength of the business without the impact of such items. Ongoing operations does not purport to represent the results of operations or our financial position that actually would have occurred had the foregoing transactions been consummated at the beginning of the periods presented. 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, miscellaneous expenses and the items described above. Adjusted EBITDA is a non-GAAP financial measure. The Company believes that Adjusted EBITDA is a financial metric that can assist the Company and investors in assessing its financial operating performance and liquidity. The Company believes that Adjusted EBITDA is useful in understanding the financial operating performance and underlying strength of its business, excluding the effects of certain factors, including gains/losses on foreign currency transactions, gains/losses on the sale of assets, miscellaneous expenses and the items described above. Adjusted EBITDA should not be considered in isolation, as a substitute for net income/(loss) or cash flow from/used for operating activities prepared in accordance with GAAP. Adjusted EBITDA does not take into account our debt service requirements and other commitments and, accordingly, is not necessarily indicative of amounts that may be available for discretionary uses. EBITDA is defined differently for our credit agreement. Furthermore, other companies may define EBITDA differently and, as a result, our measure of Adjusted EBITDA may not be comparable to EBITDA of other companies. A reconciliation of Adjusted EBITDA to the As Reported Adjusted EBITDA is provided herein. -1-
HISTORICAL REVLON FINANCIAL PERFORMANCE ================================================================================ SALES & EARNINGS(1) [GRAPHIC OMITTED] NET SALES ($MM) ADJUSTED EBITDA ($MM) 1998 1,603 1998 209 1999 1,190 1999 (74) 2000 1,265 2000 184 2001 1,261 2001 200 2002 1,194 2002 121 (1) All financial data presented on ongoing basis and adjusted for Growth Plan charges -2-
SIGNIFICANT FINANCIAL IMPROVEMENT ================================================================================ 2003 FORECAST ($MM) 2002 As Reported 2002(1) 2003F(1) Change - ----------- ------- -------- ------ 1,119 Net Sales 1,194 1,305 +9% (115) Operating Income 14 60 +329% (10.3%) % of Net Sales 1.2% 4.6% +3.4 pts (6) Adjusted EBITDA -> 121 |-> 157 +30% / | (0.5%) % of Net Sales / 10.1% | 12.0% +1.9 pts / | / | / | - -------------------------------------- -------------------------------------- EX. GROWTH PLAN CHARGE: $103MM EX. EST. GROWTH PLAN CHARGE: $29MM [ ] SKU RATIONALIZATION [ ] CARDED EYE [ ] PRICING ADJUSTMENTS [ ] PROFESSIONAL SERVICES [ ] PROFESSIONAL SERVICES - -------------------------------------- -------------------------------------- (1) Presented on an ongoing basis and adjusted for Growth Plan charges -3-
REVLON SUCCESS JOURNEY ================================================================================ VALUE CREATION CONTINUUM --> - --------------------------------------------------------------------------------------------------------------------- S u COST STABILIZE & BEGIN CONTINUE GROWTH --> S ACCELERATED RATIONALIZATION TO GROW MOMENTUM t GROWTH a i n a b l e B Consolidated Reversed Market Share Declines BALANCE TOP-LINE GROWTH u Accelerate Top-line Manufacturing/ WITH MARGIN IMPROVEMENT s Momentum Distribution Generated Top-Line Growth i Infrastructure Develop Transformation n Significantly Improve Restored Consumer/Customer Initiatives e Margins Reduced Overhead Confidence s Continue Share Growth s Continue Share Growth Strengthened Management Team Improve Balance Sheet M Significantly Strengthen o Balance Sheet d e l - --------------------------------------------------------------------------------------------------------------------- - ------------- ------------- ------------- ------------- 2000-2002 2002-2003 2004-2005E 2005-2006E - ------------- ------------- ------------- ------------- -4-
2004 BUSINESS PLAN ================================================================================ GUIDING PRINCIPLES 1. GROUNDED IN REALITY 2. ACHIEVABLE GROWTH PROJECTIONS 3. APPROPRIATE BALANCE BETWEEN CORE AND NEW PRODUCTS 4. FOCUSED BRAND SUPPORT 5. RESPONSIBLE COST CONTROL 6. RETURN ON INVESTMENT APPROACH -------------------------------------------------------------- A PLAN THAT CONTINUES TO CREATE TANGIBLE VALUE, DELIVERING $200MM IN EBITDA IN 2004, WITH SIGNIFICANT UPSIDE IN 2005 AND BEYOND. -------------------------------------------------------------- -5-
2004 PLAN HIGHLIGHTS ================================================================================ KEY DATA ($MM)(1) 2002A 2003F 2004P CHANGE - ----- ----- ----- ------ 1,194 NET SALES 1,305 1,407 +8% 14 OPERATING INCOME 60 100 +67% 1.2% % OF NET SALES 4.6% 7.1% +2.5 PTS 121 ADJUSTED EBITDA 157 201 +28% 10.1% % OF NET SALES 12.0% 14.3% +2.3 PTS (1) Presented on an ongoing basis and adjusted for Growth Plan charges -6-
WHAT'S POSSIBLE? ================================================================================ THE DESTINATION MODEL - REVLON, INC. % OF GROSS SALES DESTINATION MODEL 2003F(1) (EST.) -------- ------ GROSS SALES 100% 100% RETURN/ALLOWANCES/DISCOUNTS 18% 17% COST OF GOODS 32% 29% GROSS MARGIN 50% 54% SG&A (E.G., ADVERTISING, PROMOTION, 46% 40% DISTRIBUTION, PEOPLE & ADMIN. COSTS) OPERATING INCOME 4% 14% (1) Presented on an ongoing basis and adjusted for Growth Plan charges -7-
2004 PLAN DELIVERS ACROSS-THE-BOARD GROWTH ================================================================================ GROSS SALES ($MM)(1) 2003F 2004P % CHANGE ----- ----- -------- COLOR COSMETICS 754 820 +9% HAIR 105 114 +9% ANTI-PERSPIRANTS & 69 76 +10% DEODORANTS BEAUTY TOOLS 48 49 +2% CANADA 73 82 +12% ALL OTHER(2) 72 72 -- TOTAL NORTH AMERICA 1,121 1,213 +8% (1) Excludes Growth Plan charges (2) Includes Fragrances, Special Markets, Puerto Rico, Hawaii and Government sales -8-
KEY GROWTH DRIVERS OF 2004 PLAN ================================================================================ [ ] CATEGORY GROWTH \ | [ ] SPACE GAINS | | NEAR-TERM [ ] PRICING DRIVERS | [ ] NEW PRODUCTS | | [ ] ENHANCED MARKETING AND ADVERTISING EFFECTIVENESS / [ ] IN-STORE MERCHANDISING \ | [ ] PROMOTION REDESIGN | TRANSFORMATION INITIATIVES [ ] PRODUCT LIFE CYCLE MANAGEMENT (FEWER, BIGGER, BETTER) | | [ ] COGS ACTIONS / -9-
GROUNDED IN REALITY: THE COLOR COSMETICS CATEGORY ================================================================================ WE ARE FORECASTING THE CATEGORY TO IMPROVE SOMEWHAT IN 2004, BUT NOT TO HISTORICALLY HIGH LEVELS [GRAPHIC OMITTED] 1997-2001 CAGR 6% 2002 6% 2003F 0.3% 2004P 4% Source: ACNielsen U.S. All Outlets plus Wal-Mart and Regional MVRs -10-
ACHIEVABLE GROWTH PROJECTIONS: MARKET SHARE ================================================================================ REVLON AND ALMAY GAINED SHARE IN 2003 AND PLAN ADDITIONAL GROWTH IN 2004 2002 2003F 2004P ---- ----- ----- REVLON 16.1% 16.5% 17.4% ALMAY 5.6% 5.8% 5.9% TOTAL 21.8% 22.3% 23.3% Source: ACNielsen U.S. All Outlets plus Wal-Mart and Regional MVRs -11-
FINANCIAL IMPACT OF TRANSFORMATION INITIATIVES ================================================================================ WHAT'S POSSIBLE? TRANSFORMATION INITIATIVES 2003F(1) Market % Gross In-Store Promotion COGS Product Int'l Supply Effective TOTAL Sales Merch. Redesign Reduction Life Cycle Chain Innovation INITIATIVES DESTINATION ----- ------ -------- --------- ---------- ----- ---------- ----------- ----------- Gross Sales 100% X 100% Deductions 18% X X 1.0 - 1.5 pts. 17% COGS 32% X X X X 3.0 pts. 29% Distribution 4% 4% Advertising 12% 12% Marketing 4% X 1.0 - 1.5 pts. 2.5% In-Store Merch 6% X 2.0 - 2.5 pts. 3.5% Departmentals 21% ----------------- Cost Control / Top Line Growth ------------------- 3.0 pts. 18% Operating Income 4% 14% - ------------------------------------------------------------------------------------------------------------------------------------ ESTIMATED POTENTIAL 2 PTS. 1 - 1.5 PTS. 1 - 2 PTS. 2 PTS. 1 PTS. 7.0 - 8.5 PTS. TOTAL MARGIN OPPORTUNITY INITIATIVES + + - ------------------------------------------------------------------------------------------------------- 3.0 PTS. DEPARTMENTALS (1) Presented on an ongoing basis and adjusted for Growth Plan charges; minor [Equals approximately] = differences due to rounding 10 PTS. TOTAL MARGIN OPPORTUNITIES ----------------------------- -12-
ESTIMATED SALES IMPACT OF GROWTH INITIATIVES IN NORTH AMERICA ================================================================================ 2004P GROSS SALES GROWTH DRIVERS ($MM) [GRAPHIC OMITTED] 2003F 1,121 Category Growth 36 (All Businesses) Space Gains 20 (Color Cosmetics) Space Gains 8 (Other Buinesses) Pricing 8 (Color Cosmetics) Marketing, 20 Advertising Promotion Effectiveness, (All Businesses) 2004P 1,213 -13-
ACHIEVEMENTS TO DATE - INTERNATIONAL ================================================================================ SIGNIFICANT PROGRESS ACHIEVED IN 2003 TO STRENGTHEN INTERNAL CAPABILITIES TO DRIVE PERFORMANCE IMPROVEMENT ($MM) 2002(1) 2003F(1) CHANGE ------------- ------------- ------------- GROSS SALES 420 462 +10% OPERATING INCOME (9) 24 +$33MM - -------------------------------------------------------------------------------- KEY PERFORMANCE DRIVERS - -------------------------------------------------------------------------------- [ ] INSTALLED STRONGER MANAGEMENT IN KEY POSITIONS AND IMPLEMENTED MORE DISCIPLINED MANAGEMENT PROCESSES [ ] CONTROLLED COSTS AND IMPROVED WORKING CAPITAL MANAGEMENT [ ] RESULTS BENEFITED FROM FAVORABLE FOREIGN EXCHANGE MOVEMENTS (TRANSLATION AND TRANSACTION) - -------------------------------------------------------------------------------- (1) Financial data presented on an ongoing basis and adjusted for Growth Plan charges -14-
2004 PLAN - INTERNATIONAL ================================================================================ 2004 PLAN BUILDS ON ESTABLISHED MOMENTUM, WITH FOCUS ON KEY PROFITABLE GROWTH MARKETS AND OPTIMIZING OUR COST STRUCTURE '04P VS ($MM) 2002(1) 2003F(1) 2004P '03F --------- --------- --------- --------- GROSS SALES 420 462 506 +10% OPERATING INCOME (9) 24 35 +46% - -------------------------------------------------------------------------------- KEY 2004P PERFORMANCE DRIVERS - -------------------------------------------------------------------------------- [ ] INCREASED MARKETING BEHIND NY-DRIVEN REVLON BRAND PLANS IN KEY MARKETS [ ] CONTINUE TO BUILD INTERNAL MANAGEMENT CAPABILITIES, FOCUSING ON LATIN AMERICA AND EUROPE [ ] OPTIMIZE FIXED COST STRUCTURE IN EUROPE AND LATIN AMERICA, INCLUDING SUPPLY CHAIN [ ] CONTINUED COST CONTROLS - -------------------------------------------------------------------------------- (1) Financial data presented on an ongoing basis and adjusted for Growth Plan charges -15-
ESTIMATED SALES IMPACT OF INTERNATIONAL GROWTH INITIATIVES ================================================================================ 2004P GROSS SALES GROWTH DRIVERS ($MM) [GRAPHIC OMITTED] 462 15 18 8 3 506 - -------------------------------------------------------------------------------------------------------- 2003F Revlon Hair Care Beauty Care Other Cosmetics 2004P Cosmetics | | | | | | | | [arrow [arrow [arrow pointing pointing pointing down] down] down] Primarily UK, Primarily Latin Primarily Australia and America South Africa, distributor UK and Brazil markets in Europe -16-
ESTIMATED IMPACT FROM KEY INITIATIVES IDENTIFIED TO DATE ================================================================================ TOTAL ($MM) BASE ESTIMATED INITIATIVE SPEND 2003F 2004P 2005E SAVINGS IMPACT AREA - ------------------------- ------- ------- ------- ------- ----------- ------------------------------ Value Analysis \ 0.9 2.4 4.7 8.0 COGS Packaging Rationalization > 230 - 0.8 4.5 5.3 COGS Direct Sourcing / 5.9 2.6 1.3 9.8 COGS Indirect Sourcing 280 1.1 12.3 5.0 18.4 Non COGS P+L and Balance Sheet; Phase One Focus is on $178mm of base spend SKU Rationalization - 2.0 4.0 6.0 Balance Sheet Demand/Supply Planning 0.4 5.0 5.0 10.4 Balance Sheet ------- ------- ------- ----------- Total Impact 8.3 25.1 24.5 57.9 P+L Impact 7.1 10.3 15.5 32.9 B/S Impact 1.2 14.8 9.0 25.0 -17-
2000-2003 Financial Performance(1) ================================================================================ SINCE 2002, NEW MANAGEMENT HAS BEEN THE DRIVER BEHIND RENEWED FOCUS ON OPERATING MARGINS AND REDUCTION IN RETURNS, DISCOUNTS AND ALLOWANCES ($MM) 2000 2001 2002 2003F ---- ---- ---- ----- Gross Sales 1,597 1,537 1,536 1,583 growth na (3.8%) (0.1%) 3.1% Net Sales 1,265 1,261 1,194 1,305 growth na (0.3%) (5.3%) 9.3% % gross sales 79.2% 82.0% 77.7% 82.4% Gross Profit 762 765 710 804 gross margin 47.7% 49.8% 46.2% 50.8% SG&A 693 665 696 744 % gross sales 43.4% 43.3% 45.3% 47.0% Depreciation & Amortization 115 100 107 97 ADJUSTED EBITDA 184 200 121 157 % gross sales 11.5% 13.0% 7.9% 9.9% (1) All financial data presented on an ongoing basis and adjusted for Growth Plan charges -18-
NORTH AMERICA AND INTERNATIONAL NET SALES PERFORMANCE(1) ================================================================================ NORTH AMERICA AND INTERNATIONAL NET SALES HAVE GROWN SUBSTANTIALLY IN 2003 ($MM) 2000 2001 2002 2003F ---- ---- ---- ----- NET SALES North America 838 870 828 894 growth na 3.8% (4.8%) 8.0% International 427 391 366 411 growth na (8.4%) (6.4%) 12.3% Consolidated 1,265 1,261 1,194 1,305 growth na (0.3%) (5.3%) 9.3% (1) All financial data presented on an ongoing basis and adjusted for Growth Plan charges -19-
NORTH AMERICA AND INTERNATIONAL PERFORMANCE(1) ================================================================================ NORTH AMERICA AND INTERNATIONAL OPERATING INCOME IS IMPROVING ($MM) 2000 2001 2002 2003F ---- ---- ---- ----- OPERATING INCOME North America 121 129 71 96 International (14) 3 (9) 24 Corporate (38) (32) (48) (60) Consolidated 69 100 14 60 % gross sales 4.3% 6.5% 0.9% 3.8% Depreciation & Amortization 115 100 107 97 ADJUSTED EBITDA 184 200 121 157 % gross sales 11.5% 13.0% 7.9% 9.9% (1) All financial data presented on an ongoing basis and adjusted for Growth Plan charges -20-
EBITDA RECONCILIATION ================================================================================ ($MM) 2000 2001 2002 2003F COMMENTS ---- ---- ---- ----- -------- REPORTED ADJUSTED EBITDA(1) 137 125 (6) 122 Brand and Facilities Sold (9) 1 - - o Sale of Professional Products, Plusbelle and Colorama Restructuring Costs & Other 56 74 24 6 o Restructuring, plant consolidation costs and executive severance Growth Plan Charges - - 103 29 o Expenses related to the acceleration and implementation of the Stabilization and Growth phase of the Company's plan ADJUSTED ONGOING EBITDA 184 200 121 157 (1) As reported in Company's earnings releases -21-
GROWTH PLAN CHARGES AND BENEFITS ================================================================================ INITIATIVE BENEFIT ---------- ------- [ ] SKU RATIONALIZATION ($72MM) [ ] WALL PRODUCTIVITY PRODUCT BRANDING [ ] PRICING ADJUSTMENT ($13MM) [ ] ALIGNMENT WITH CONSUMER VALUE PERCEPTIONS [ ] CARDED EYE ($13MM) [ ] OPTIMIZE PACKAGING, INCREASED CONSUMPTION [ ] PROFESSIONAL SERVICES & [ ] OVERALL STRATEGIC PLAN OTHER ($34MM) [ ] EFFICIENT INVENTORY MANAGEMENT ---------------------- TOTAL CHARGES ($132MM) ---------------------- ---------------------------------------- REVENUE GROWTH MOMENTUM CHANGE: +10 PTS. ---------------------------------------- -22-
2004 PLAN(1) ================================================================================ 2004 PLAN DELIVERS ATTRACTIVE EARNINGS GROWTH, FURTHER BUILDING ON SOLID FOUNDATION ESTABLISHED IN 2003 ($MM) 2002 2003F 2004P ---- ----- ----- Gross Sales 1,536 1,583 1,719 growth (0.1%) 3.1% 8.6% Net Sales 1,194 1,305 1,407 growth (5.3%) 9.3% 7.8% % gross sales 77.7% 82.4% 81.8% Adjusted EBITDA 121 157 201 growth (39.5%) 27.8% 28.0% % gross sales 7.9% 9.9% 11.7% (1) All financial data presented on an ongoing basis and adjusted for Growth Plan charges -23-
ADJUSTED EBITDA BRIDGE(1) ================================================================================ 2004P VS 2003F ($MM) ------------ 2003F Adjusted EBITDA 157 2003 Changes Due to: North America 33 Volume/Mix 43 --> International 10 Pricing/Licensing 12 Advertising & Consumer Promotion (12) All Other 1 ------------ 2004P Adjusted EBITDA 201 ============ (1) All financial data presented on an ongoing basis and adjusted for Growth Plan charges -24-
2003-2004 FINANCIAL INFORMATION(1) ================================================================================ THE QUARTERLY SALES PATTERN IN 2004P IS CONSISTENT WITH 2003F EXPERIENCE [GRAPHIC OMITTED] 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q --------------2003-------------- --------------2004-------------- Net Sales ($mm) 298 332 313 362 312 354 344 397 Adjusted EBITDA ($mm) 35 34 20 68 31 33 39 98 As-Reported Adjusted EBITDA 23 21 15 63 Brand Support vs. PY ($mm) +9 +20 +9 -3 +13 +9 +6 -- (1) All financial data, except As-Reported Adjusted EBITDA, presented on an ongoing basis and adjusted for Growth Plan charges -25-
WHAT'S POSSIBLE? ================================================================================ ACHIEVING DESTINATION MODEL TRANSLATES INTO DRAMATIC EARNINGS UPSIDE AND VALUE CREATION 2004 Plan @ Destination Margins(1) ---------------------- ------------------------ ($ MM) % OF GROSS ($ MM) % OF GROSS ---------------------- ------------------------ Gross Sales 1,719 100% 1,719 100% Returns/Allow/Discounts/Other 312 18% 292 17% Cost of Goods 548 32% 499 29% SG&A 759 44% 688 40% Operating Income 100 6% 241 14% ADJUSTED EBITDA 201 12% 342 20% | [arrow | pointing [arrow up] pointing | down] | -------------------------------------- ~$140MM INCREMENTAL MARGIN OPPORTUNITY -------------------------------------- (1) For illustrative purposes only -26-
ACHIEVABLE GROWTH PROJECTIONS: $ CONSUMPTION ================================================================================ U.S COLOR COSMETICS INCLUDING WAL-MART % CHANGE VS. PY '00-'02 --------------- CAGR 2003F 2004P ---- ----- ----- REVLON -2.0% +2.7% +9.2% ALMAY -3.8% +2.0% +5.7% TOTAL CATEGORY +3.3% +0.3% +4.0% Source: ACNielsen U.S. All Outlets plus Wal-Mart and Regional MVRs -27-
U.S. COLOR COSMETICS CORE VS. NEW ================================================================================ THE PLAN STRIKES THE APPROPRIATE BALANCE BETWEEN CORE BUSINESS GROWTH AND NEW PRODUCTS % OF GROSS SALES 1999 2000 2001 2002 2003F 2004P ---- ---- ---- ---- ----- ----- CORE 77 75 70 74 75 82 NEW(1) 23 25 30 26 25 18 ------------------------------------------------ TOTAL 100 100 100 100 100 100 # OF NEW SKUS 213 203 237 187 140 113 SALES PER SKU 0.8 0.8 0.8 0.8 1.1 1.0 ($MM) ---------------------------------------------------------------- ALMOST $150MM SALES PROJECTED TO COME FROM NEW PRODUCTS IN 2004P ---------------------------------------------------------------- (1) Includes launch year and preview sales -28-
PROJECTED CAPITALIZATION BOOK CUM. MULT. OF VALUE 2004P ($MM) 3/31/2004P EBITDA $201MM ----------- ------------- Cash and Cash Equivalents 45 Senior Secured Debt Short-Term Bank Borrowings 29 Term Loan due May 2005 115 $132mm Revolving Credit Facility due May 2005 108 12% Senior Secured Second Priority Notes due December 2005 357 ---------- Total Secured Debt 609 3.0x Other Debt $125mm Holdings Multi-Draw Term Loan due December 2005 0 $65mm Holdings Line of Credit due December 2004 55 $100mm Multi-Draw Term Loan due December 2005 110 8 1/8% Senior Notes due February 2006 250 9% Senior Notes due November 2006 250 8 5/8% Senior Subordinated Notes due February 2008 650 Advances from Holdings 24 ---------- Total Other Debt 1,339 Total Debt 1,948 9.7x Series A Preferred Stock - Holdings 55 Series B Preferred Stock - Holdings 0 Total Debt and Preferred 2,003 9.9x Stockholders' Equity (1,835) Total Capitalization 168 -29-
PRO FORMA FINANCIAL EFFECTS ============================================================================================================================ ($MM) CURRENT PRO FORMA REDUCTION/SAVINGS ------- --------- ----------------- 2004P CapEx 79 79 N/A Cash Interest Expense 167 125 42 -30-
PRO FORMA LIQUIDITY ANALYSIS =============================================================================================================================== 2004P ------------------------------------------------------------------------------ ($MM) Q1 Q2 Q3 Q4 FY'04 ---------- ----------- ----------- ----------- ----------- OPENING LIQUIDITY 57 136 91 49 57 Reported Adjusted EBITDA 31 34 39 98 201 Working Capital 1 (11) (18) (24) (53) CAPEX/Displays (29) (19) (17) (15) (79) Taxes (1) (6) (1) (2) (10) ---------- ----------- ----------- ----------- ----------- OPERATING CASH FLOW 1 (3) 3 56 58 Net Interest Paid (44) (38) (44) (38) (164) Other (12) (8) (2) (1) (24) ---------- ----------- ----------- ----------- ----------- NET CASH FLOW (54) (49) (43) 17 (129) Financing Activity 133 5 (0) (9) 128 ---------- ----------- ----------- ----------- ----------- Total Change In Liquidity 78 (44) (43) 8 (0) CLOSING LIQUIDITY 136 91 49 57 57 Unrestricted Cash Balance 14 12 13 23 23 -31-
RECONCILIATION OF CERTAIN NON-GAAP MEASURES TO GAAP REVLON, INC. AND SUBSIDIARIES UNAUDITED ADJUSTED EBITDA RECONCILIATION (1) (DOLLARS IN MILLIONS) YEAR ENDED DECEMBER 31, --------------------------------------------------------------------- 1998 1999 2000 2001 2002 2003F (2) 2004P -------- -------- -------- -------- -------- -------- -------- RECONCILIATION TO CASH FLOWS FROM OPERATING ACTIVITIES: - ------------------------------------------------------- Net cash used for operating activities $ (52.2) $ (81.8) $ (84.0) $ (86.5) $ (112.3) $ (164.8) $ (102.6) Changes in assets and liabilities, net of acquisitions and dispositions 127.7 (161.4) 68.0 63.7 (54.3) 123.0 109.8 Interest expense, net 132.7 145.1 142.3 136.2 152.9 167.2 186.7 Foreign currency losses (gains), net 4.6 (0.5) 1.6 2.2 1.4 (5.2) 1.7 Gain on sale of marketable securities 8.4 - - 2.2 - - - Loss (gain) on sale of product line, brands and facilities, net 0.9 2.4 - - - - Miscellaneous, net 4.5 (1.6) (1.8) 2.7 1.2 0.5 0.2 Provision for income taxes 5.0 9.1 8.6 4.1 4.8 1.3 5.6 -------- -------- -------- -------- -------- -------- -------- As Reported Adjusted EBITDA $ 230.7 $ (90.2) $ 137.1 $ 124.6 $ (6.3) $ 122.0 $ 201.4 ======== ======== ======== ======== ======== ======== ======== RECONCILIATION TO NET LOSS: - --------------------------- Net loss from continuing operations $ (79.0) $ (370.9) $ (129.7) $ (153.7) $ (286.5) $ (154.4) $ (106.5) Interest expense, net 132.7 145.1 142.4 136.6 155.5 170.2 189.7 Amortization of debt issuance costs 5.1 4.3 5.6 6.2 7.7 8.8 9.0 Foreign currency losses (gains), net 4.6 (0.5) 1.6 2.2 1.4 (5.2) 1.7 Loss (gain) on sale of product line, brands and facilities, net - 0.9 (10.8) 14.4 1.0 - - Loss on early extinguishment of debt 51.7 - - 3.6 - - - Miscellaneous, net 4.5 - (1.8) 2.7 1.2 0.5 0.2 Provision for income taxes 5.0 9.1 8.6 4.1 4.8 1.3 5.6 Depreciation and amortization 106.1 121.8 121.2 108.5 108.6 100.8 101.7 -------- -------- -------- -------- -------- -------- -------- As Reported Adjusted EBITDA 230.7 (90.2) 137.1 124.6 (6.3) 122.0 201.4 -------- -------- -------- -------- -------- -------- -------- Product line and brands sold (65.0) (41.5) (8.7) 1.5 - - - Restructuring 42.9 36.3 54.1 38.1 10.2 6.4 - Consolidation costs and other, net - 22.0 1.9 36.0 13.6 - - Growth plan - - - - 103.4 28.9 - -------- -------- -------- -------- -------- -------- -------- Adjusted EBITDA $ 208.6 $ (73.4) $ 184.4 $ 200.2 $ 120.9 $ 157.3 $ 201.4 ======== ======== ======== ======== ======== ======== ======== (1) Subject to minor rounding differences (2) 2003F represents forecasted results as of January 14, 2004 -32-
RECONCILIATION OF CERTAIN NON-GAAP MEASURES TO GAAP REVLON, INC. AND SUBSIDIARIES UNAUDITED NET SALES RECONCILIATION (1) (DOLLARS IN MILLIONS) YEAR ENDED DECEMBER 31, ------------------------------------------------------------------------------------------------- 1998 1999 2000 2001 2002 2003F (2) ------------- ------------- -------------- -------------- ------------- ------------- Net sales - As Reported $ 2,064.1 $ 1,629.8 $1,409.4 $1,277.6 $ 1,119.4 $ 1,300.2 Product line and brands sold (461.5) (440.1) (144.1) (16.4) - - Growth plan - - - - 75.1 4.6 ------------- ------------- -------------- -------------- ------------- ------------- Net sales $ 1,602.6 $ 1,189.7 $1,265.3 $1,261.2 $ 1,194.5 $ 1,304.8 ============= ============= ============== ============== ============= ============= (1) Subject to minor rounding differences (2) 2003F represents forecasted results as of January 14, 2004 -33-
RECONCILIATION OF CERTAIN NON-GAAP MEASURES TO GAAP REVLON, INC. AND SUBSIDIARIES UNAUDITED SUMMARY FINANCIAL DATA (1) (DOLLARS IN MILLIONS) YEAR ENDED DECEMBER 31, 2000: - ---------------------------------------------- BRAND AND RESTRUCTURING AS FACILITIES COSTS AND GROWTH ADJUSTED REPORTED SOLD OTHER, NET PLAN ----------- ------------- ------------- ------------- -------------- Gross sales $ 1,749.9 $ (153.4) $ - $ - $ 1,596.5 Returns, allowances, discounts and other 340.5 (9.3) - - 331.2 ----------- ------------- ------------- ------------- -------------- Net sales 1,409.4 (144.1) - - 1,265.3 Gross profit 835.1 (77.8) 4.9 - 762.2 Selling, general and administrative expenses 765.1 (72.2) 692.9 Restructuring costs and other, net 54.1 (54.1) - ----------- ------------- ------------- ------------- -------------- Operating income (loss) $ 15.9 $ (5.6) $ 59.0 $ - $ 69.3 Adjusted EBITDA: Operating income (loss) $ 15.9 $ (5.6) $ 59.0 $ - $ 69.3 Depreciation and amortization 121.2 (3.1) (3.0) - 115.1 ----------- ------------- ------------- ------------- -------------- Adjusted EBITDA $ 137.1 $ (8.7) $ 56.0 $ - $ 184.4 =========== ============= ============= ============= ============== YEAR ENDED DECEMBER 31, 2001: - ----------------------------------------------- BRAND AND RESTRUCTURING AS FACILITIES COSTS AND GROWTH ADJUSTED REPORTED SOLD OTHER, NET PLAN -------------- ------------- ------------- ------------- -------------- Gross sales $ 1,553.9 $ (16.8) $ - $ - $ 1,537.1 Returns, allowances, discounts and other 276.3 (0.4) - - 275.9 -------------- ------------- ------------- ------------- -------------- Net sales 1,277.6 (16.4) - - 1,261.2 Gross profit 733.4 (6.5) 38.2 - 765.1 Selling, general and administrative expenses 679.2 (9.1) (5.4) - 664.7 Restructuring costs and other, net 38.1 - (38.1) - - -------------- ------------- ------------- ------------- -------------- Operating income $ 16.1 $ 2.6 $ 81.7 $ - $ 100.4 Adjusted EBITDA: Operating income $ 16.1 $ 2.6 $ 81.7 $ - $ 100.4 Depreciation and amortization 108.5 (1.1) (7.6) - 99.8 -------------- ------------- ------------- ------------- -------------- Adjusted EBITDA $ 124.6 $ 1.5 $ 74.1 $ - $ 200.2 ============== ============= ============= ============= ============== (1) Subject to minor rounding differences -34-
RECONCILIATION OF CERTAIN NON-GAAP MEASURES TO GAAP REVLON, INC. AND SUBSIDIARIES UNAUDITED SUMMARY FINANCIAL DATA (1) (DOLLARS IN MILLIONS) YEAR ENDED DECEMBER 31, 2002 - ----------------------------------------------- BRAND AND RESTRUCTURING AS FACILITIES COSTS AND GROWTH ADJUSTED REPORTED SOLD OTHER, NET PLAN -------------- ------------- ------------- -------------- ------------- Gross sales $ 1,536.2 $ - $ - $ - $ 1,536.2 Returns, allowances, discounts and other 416.8 - - (75.1) 341.7 -------------- ------------- ------------- -------------- ------------- Net sales 1,119.4 - - 75.1 1,194.5 Gross profit 615.7 - 1.5 92.8 710.0 Selling, general and administrative expenses 717.0 - (9.5) (11.4) 696.1 Restructuring costs and other, net 13.6 - (13.6) - -------------- ------------- ------------- -------------- ------------- Operating income (loss) $ (114.9) $ - $ 24.6 $ 104.2 $ 13.9 Adjusted EBITDA: Operating income (loss) $ (114.9) $ - $ 24.6 $ 104.2 $ 13.9 Depreciation and amortization 108.6 - (0.8) (0.8) 107.0 -------------- ------------- ------------- -------------- ------------- Adjusted EBITDA $ (6.3) $ - $ 23.8 $ 103.4 $ 120.9 ============== ============= ============= ============== ============= YEAR ENDED DECEMBER 31, 2003F (2) - ----------------------------------------------- BRAND AND RESTRUCTURING AS FACILITIES COSTS AND GROWTH ADJUSTED REPORTED SOLD OTHER, NET PLAN -------------- ------------- ------------- -------------- ------------- Gross sales $ 1,580.0 $ - $ - $ 2.5 $ 1,582.5 Returns, allowances, discounts and other 279.8 - - (2.1) 277.7 -------------- ------------- ------------- -------------- ------------- Net sales 1,300.2 - - 4.6 1,304.8 Gross profit 797.6 - 0.9 5.6 804.1 Selling, general and administrative expenses 770.0 - - (26.0) 744.0 Restructuring costs and other, net 6.4 - (6.4) - - -------------- ------------- ------------- -------------- ------------- Operating income $ 21.2 $ - $ 7.3 $ 31.6 $ 60.1 Adjusted EBITDA: Operating income $ 21.2 $ - $ 7.3 $ 31.6 $ 60.1 Depreciation and amortization 100.8 - (0.9) (2.7) 97.2 -------------- ------------- ------------- -------------- ------------- Adjusted EBITDA $ 122.0 $ - $ 6.4 $ 28.9 $ 157.3 ============== ============= ============= ============== ============= YEAR ENDED DECEMBER 31, 2004P - ----------------------------------------- BRAND AND RESTRUCTURING AS FACILITIES COSTS, AND GROWTH ADJUSTED REPORTED SOLD OTHER, NET PLAN ----------- ------------ --------------- ---------- ------------ Gross sales $1,719.0 $ - $ - $ - $1,719.0 Returns, allowances, discounts and other 312.5 - - - 312.5 ------- ----- ----- ----- ------- Net sales 1,406.5 - - - 1,406.5 Gross profit 858.2 - - - 858.2 Selling, general and administrative expenses 758.5 - - - 758.5 Restructuring costs and other, net - - - - - ------- ----- ----- ----- ------- Operating income $ 99.7 $ - $ - $ - $ 99.7 Adjusted EBITDA: Operating income $ 99.7 $ - $ - $ - $ 99.7 Depreciation and amortization 101.7 - - - 101.7 ------- ----- ----- ----- ------- Adjusted EDITDA $ 201.4 $ - $ - $ - $ 201.4 ======= ===== ===== ===== ======= (1) Subject to minor rounding differences (2) 2003F represents forecasted results as of January 14, 2004 -35-
RECONCILIATION OF CERTAIN NON-GAAP MEASURES TO GAAP REVLON, INC. AND SUBSIDIARIES UNAUDITED NORTH AMERICA AND INTERNATIONAL NET SALES RECONCILIATION (1) (DOLLARS IN MILLIONS) YEAR ENDED DECEMBER 31, ------------------------------------------------------------ 2000 2001 2002 2003F (2) ------------- ------------- -------------- -------------- NORTH AMERICA (United States and Canada) - ------------------------------------------------- Net sales - As Reported $ 874.0 $ 870.3 $ 760.1 $ 890.6 Product line and brands sold (35.8) - - - Growth plan - - 68.8 3.3 ------------- ------------- -------------- -------------- Net sales $ 838.2 $ 870.3 $ 828.9 $ 893.9 ============= ============= ============== ============== INTERNATIONAL - ------------------------------------------------- Net sales - As Reported $ 535.4 $ 407.3 $ 359.3 $ 409.6 Product line and brands sold (108.3) (16.4) - - Growth plan - - 6.3 1.3 ------------- ------------- -------------- -------------- Net sales $ 427.1 $ 390.9 $ 365.6 $ 410.9 ============= ============= ============== ============== (1) Subject to minor rounding differences (2) 2003F represents forecasted results as of January 14, 2004 -36-
RECONCILIATION OF CERTAIN NON-GAAP MEASURES TO GAAP REVLON, INC. AND SUBSIDIARIES UNAUDITED CONSOLIDATING OPERATING INCOME RECONCILIATION (1) (DOLLARS IN MILLIONS) YEAR ENDED DECEMBER 31, ----------------------------------------------------------------------------- 2000 2001 2002 2003F (2) 2004P ------------- ------------- -------------- -------------- -------------- North America $ 121.0 $ 129.0 $ 71.0 $ 96.0 $ 114.9 International (14.0) 3.0 (9.0) 24.0 35.0 Corporate (38.0) (32.0) (48.0) (60.0) (50.3) ------------- ------------- -------------- -------------- -------------- Consolidated $ 69.0 $ 100.0 $ 14.0 $ 60.0 $ 99.6 ------------- ------------- -------------- -------------- -------------- Product line, brands and facilities sold 5.6 (2.6) Restructuring (54.1) (38.1) (13.6) (6.4) - Consolidation costs and other, net (4.9) (43.6) (11.0) (0.9) - Growth plan (104.2) (31.6) - ------------- ------------- -------------- -------------- -------------- Operating income (loss) - As Reported $ 15.6 $ 15.7 $ (114.8) $ 21.1 $ 99.6 ============= ============= ============== ============== ============== (1) Subject to minor rounding differences (2) 2003F represents forecasted results as of January 14, 2004
RECONCILIATION OF CERTAIN NON-GAAP MEASURES TO GAAP REVLON, INC. AND SUBSIDIARIES UNAUDITED QUARTERLY RECONCILIATION (1) (DOLLARS IN MILLIONS) THREE MONTHS ENDED 2003 --------------------------------------------------- YEAR ENDED MARCH 31, JUNE 30, SEPT. 30, DEC 31, F (2) 2003F (2) ------------- --------- ----------- -------------- ----------- NET SALES - -------------------------- Net sales - As Reported $ 292.0 $ 322.3 $ 316.5 $ 369.4 $1,300.2 Growth plan 6.0 9.4 (3.8) (7.0) 4.6 ------------- -------- ----------- --------- --------- Net sales $ 298.0 $ 331.7 $ 312.7 $ 362.4 $1,304.8 ============= ======== =========== ========= ========= ADJUSTED EBITDA - -------------------------- RECONCILIATION TO CASH FLOWS FROM OPERATING ACTIVITIES: Net cash used for operating activities $ (60.5) $ (74.3) $ (49.1) $ 19.1 $ (164.8) Changes in assets and liabilities, net of acquisitions and dispositions 42.1 64.5 19.8 (3.4) 123.0 Interest expense, net 40.2 39.2 42.7 45.1 167.2 Foreign currency losses (gains), net 0.3 (2.7) (0.8) (2.0) (5.2) Miscellaneous, net 0.4 - (0.3) 0.4 0.5 Provision for income taxes 0.9 (6.1) 2.3 4.2 1.3 ------------- --------- ---------- ---------- --------- As Reported Adjusted EBITDA $ 23.4 $ 20.6 $ 14.6 $ 63.4 $ 122.0 ============= ========= ========== ========== ========= RECONCILIATION TO NET LOSS: - -------------------------------------- Net loss $ (48.7) $ (37.8) $ (54.7) $ (13.2) $ (154.4) Interest expense, net 40.9 41.1 43.4 44.8 170.2 Amortization of debt issuance costs 2.0 2.4 2.2 2.2 8.8 Foreign currency losses (gains), net 0.3 (2.7) (0.8) (2.0) (5.2) Miscellaneous, net 0.4 - (0.3) 0.4 0.5 Provision (benefit) for income taxes 0.9 (6.1) 2.3 4.2 1.3 Depreciation and amortization 27.6 23.7 22.5 27.0 100.8 ------------- --------- ---------- ---------- --------- As Reported Adjusted EBITDA 23.4 20.6 14.6 63.4 122.0 ------------- --------- ---------- ---------- --------- Product line and brands sold Restructuring 0.5 - 0.4 5.5 6.4 Growth plan 11.0 13.0 5.1 (0.2) 28.9 ------------- --------- ---------- ---------- --------- Adjusted EBITDA $ 34.9 $ 33.6 $ 20.1 $ 68.7 $ 157.3 ============= ========= ========== ========== ========= (1) Subject to minor rounding differences (2) 2003F represents forecasted results as of January 14, 2004
RECONCILIATION OF CERTAIN NON-GAAP MEASURES TO GAAP REVLON, INC. AND SUBSIDIARIES UNAUDITED QUARTERLY RECONCILIATION OF LIQUIDITY (1) (dollars in millions) THREE MONTHS ENDED 2004 P (2) ----------------------------------------------------------------- YEAR ENDED MARCH 31, P JUNE 30, P SEPT. 30, P DEC 31, P 2004 P ---------------- -------------- -------------- -------------- --------------- RECONCILIATION TO OPERATING CASH FLOW Net cash used for operating activities $ (44.8) $ (42.1) $ (37.2) $ 21.5 $ (102.6) Pro Forma Interest Savings -- 3.0 18.5 3.5 25.0 ---------------- -------------- -------------- -------------- --------------- (44.8) (39.1) (18.7) 25.0 (77.6) Capital expenditures (7.1) (5.5) (5.6) (5.0) (23.2) Restructuring spending 5.1 6.0 2.1 1.1 14.3 Interest paid 44.3 36.2 25.9 35.7 142.1 Interest income (0.8) (0.8) (0.8) (0.8) (3.2) Other working capital items 4.3 0.2 0.1 -- 4.6 ---------------- -------------- -------------- -------------- --------------- Operating cash flow $ 1.0 $ (3.0) $ 3.0 $ 56.0 $ 57.0 ================ ============== ============== ============== =============== (1) Subject to minor rounding differences (2) 2004 P represents projections as of January 14, 2004
RECONCILIATION OF CERTAIN NON-GAAP MEASURES TO GAAP REVLON, INC. AND SUBSIDIARIES UNAUDITED QUARTERLY RECONCILIATION (1) (DOLLAR IN MILLIONS) THREE MONTHS ENDED 2004 --------------------------------------------------------- YEAR ENDED MARCH 31, JUNE 30, SEPT. 30, DEC. 31, 2004P ----------- ---------- ----------- ---------- ----------- NET SALES - ----------------------- Net sales - As Reported 321.7 343.6 344.3 396.9 $1,406.5 Growth plan - - - - - ------- ------- ------- ------- -------- Net sales $ 321.7 $ 343.6 $344.3 $396.9 $1,406.5 ======= ======= ======= ======= ======== ADJUSTED EBITDA - ------------------------ Reconciliation to cash flows from operating activities: Net cash used for operating activities $(44.8) $(42.1) $(37.2) $21.4 $(102.7) Changes in assets and liabilities, net of 29.6 28.6 26.3 25.6 110.1 acquisitions and dispositions Interest expense, net 44.8 46.9 47.5 48.4 186.6 Foreign currency losses (gains), net 1.2 0.1 0.2 0.2 1.7 Miscellaneous, net 0.1 - 0.1 - 0.2 Provision for income taxes 0.4 1.0 1.6 2.6 5.6 ------- ------- ------- ------- -------- As Reported Adjusted EBITDA $ 31.3 $ 33.5 $ 38.5 $98.2 $ 201.5 ======= ======= ======= ======= ======== Reconciliation to net loss: - --------------------------- Net loss $(43.8) $(42.0) $(39.3) $18.6 $(106.5) Interest expense, net 45.6 46.7 48.3 49.1 189.7 Amortization of debt issuance costs 2.3 2.3 2.3 2.3 9.0 Foreign currency losses (gains), net 1.2 0.1 0.2 0.2 1.7 Miscellaneous, net 0.1 - 0.1 - 0.2 Provision (benefit) for income taxes 0.4 1.0 1.6 2.6 5.6 Depreciation and amortization 25.5 25.4 26.3 25.5 101.7 ------- ------- ------- ------- -------- As Reported Adjusted EBITDA 31.3 33.5 38.5 98.3 201.4 ======= ======= ======= ======= ======== Product line and brands sold - - - - - Restructing - - - - - Growth plan - - - - - ------- ------- ------- ------- -------- Adjusted EBITDA $ 31.3 $ 33.5 $ 38.5 $98.3 $ 201.4 ======= ======= ======= ======= ======== (1) Subject to minor rounding differences
RECONCILIATION OF CERTAIN NON-GAAP MEASURES TO GAAP REVLON, INC. AND SUBSIDIARIES UNAUDITED SUMMARY FINANCIAL DATA (1) (DOLLARS IN MILLIONS) YEAR ENDED DECEMBER 31, 2003F (2) --------------------------------------------------------------------------------- Brand and Restructuring Facilities Costs and Growth Adjusted As Reported Sold Other, Net Plan (% Gross Sales)(1) --------------------------------------------------------------------------------- (% Gross Sales) --------------------------------------------------------------------------------- GROSS SALES 1,580.0 100% - 2.5 1,582.5 100% RETURN/ALLOWANCES/DISCOUNTS AND OTHER REVENUE 279.8 18% - (2.1) 277.7 18% --------------------------------------------------------------------------------- NET SALES 1,300.2 - 4.6 1,304.8 --------------------------------------------------------------------------------- COST OF GOODS 502.6 32% - (0.9) (1.0) 500.7 32% --------------------------------------------------------------------------------- GROSS MARGIN 797.6 50% - 0.9 5.6 804.1 50% Round to 50% --------------------------------------------------------------------------------- SG&A (E.G., ADVERTISING, PROMOTION, 770.0 49% - (26.0) 744.0 46% Round to 46% DISTRIBUTION, PEOPLE & ADMIN, COSTS) RESTRUCTURING COSTS AND OTHER, NET 6.4 - (6.4) - - --------------------------------------------------------------------------------- OPERATING INCOME 21.2 1% - 7.3 31.6 60.1 4% --------------------------------------------------------------------------------- (1) Subject to minor rounding differences (2) 2003F represents forecasted results as of January 14, 2004
RECONCILIATION OF CERTAIN NON-GAAP MEASURES TO GAAP REVLON, INC. AND SUBSIDIARIES UNAUDITED SUMMARY FINANCIAL DATA (1) (DOLLARS IN MILLIONS) YEAR ENDED DECEMBER 31, 2004P (1), (2) --------------------------------------------------------------------------------------------- Brand and Restructuring Facilities Costs and Growth Destination As Reported Sold Other, Net Plan Adjusted Model (% Gross (% Gross (% Gross Sales) Sales) Sales) --------------------------------------------------------------------------------------------- GROSS SALES 1,719 100% - - 1,719 100% 100% 1,719 RETURN/ALLOWANCES/DISCOUNTS AND OTHER REVENUE 312 18% - - 312 18% 17% 292 --------------------------------------------------------------------------------------------- NET SALES 1,407 - - 1,407 1,427 --------------------------------------------------------------------------------------------- COST OF GOODS 548 32% - - - 548 32% 29% 499 --------------------------------------------------------------------------------------------- GROSS MARGIN 859 50% - - - 859 50% 54% 928 --------------------------------------------------------------------------------------------- SG&A (E.G., ADVERTISING, PROMOTION, 759 44% - - 759 44% 40% 688 DISTRIBUTION, PEOPLE & ADMIN, COSTS) RESTRUCTURING COSTS AND OTHER, NET - - - --------------------------------------------------------------------------------------------- OPERATING INCOME 100 6% - - - 100 6% 14% 241 --------------------------------------------------------------------------------------------- DEPRECIATION AND AMORTIZATION 101 - 101 --------------------------------------------------------------------------------------------- EBITDA 201 12% - - 201 12% 20% 342 --------------------------------------------------------------------------------------------- (1) Subject to minor rounding differences (2) 2004P represents 2004 Plan as of January 14, 2004
RECONCILIATION OF CERTAIN NON-GAAP MEASURES TO GAAP REVLON, INC. AND SUBSIDIARIES UNAUDITED NORTH AMERICA AND INTERNATIONAL SALES RECONCILIATION (1) (DOLLARS IN MILLIONS) ----------- ----------- ------------- NORTH AMERICA (United State and Canada) 2002 2003F(2) 2004P - ---------------------------------------- ----------- ----------- ------------- Gross sales $ 1,116.5 $ 1,118.0 $ 1,213.0 Growth plan 2.5 Gross Sales - Adjusted 1,116.5 1,120.5 1,213.0 Returns, allowances, discounts and other 356.4 227.4 260.9 Net sales - As Reported 760.1 890.6 952.1 Product line and brands sold - - - Growth plan 68.8 3.3 - -------- -------- -------- Net sales $ 828.9 $ 893.9 $ 952.1 ======== ======== ======== INTERNATIONAL - ---------------------------------------- Gross sales $ 419.7 $ 462.0 $ 506.0 Returns, allowances, discounts and other 60.3 52.4 51.5 Net sales - As Reported $ 359.4 $ 409.6 $ 454.5 Product line and brands sold - - - Growth plan 6.3 1.3 - -------- -------- -------- Net sales $ 365.7 $ 410.9 $ 454.5 ======== ======== ======== (1) Subject to minor rounding differences (2) 2003F represents forecasted results as of January 14, 2004