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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
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April 29, 2004 (April 29, 2004)
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Date of Report (Date of earliest event reported)
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 (Commission File No.) (I.R.S. Employer
Jurisdiction of Identification
Incorporation) No.)
237 Park Avenue
New York, New York 10017
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(Address of Principal (Zip Code)
Executive Offices)
(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)
Item 12. Results of Operation and Financial Condition.
On April 29, 2004, Revlon, Inc. issued a press release announcing its
earnings for the fiscal quarter ended March 31, 2004. The press release is
attached hereto as Exhibit 99.1.
2
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
REVLON, INC.
By: /s/ Robert K. Kretzman
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Robert K. Kretzman
Executive Vice President,
General Counsel and Chief Legal Officer
Date: April 29, 2004
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EXHIBIT INDEX
Exhibit No. Description
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99.1 Press Release, dated April 29, 2004.
4
Exhibit 99.1
Revlon Reports First Quarter 2004 Results;
Significant Progress Continues
NEW YORK--(BUSINESS WIRE)--April 29, 2004--Revlon, Inc. (NYSE:
REV) today announced results for the first quarter ended March 31,
2004. Net sales for the quarter totaled $308 million, up 6% versus the
same period last year. Operating income for the quarter totaled $20
million, compared to an operating loss of $4 million in the first
quarter last year.
During the quarter, the Company consummated debt-for-equity
exchange offers that reduced its debt and increased its common equity
by more than $800 million. More recently, the Company announced a
series of additional refinancing transactions intended to extend the
maturities on much of its debt and further reduce the Company's annual
interest expense.
Commenting on the quarter, Revlon President and Chief Executive
Officer Jack Stahl stated, "The first quarter was a particularly
significant one for Revlon. Not only did we continue to take actions
to strengthen the business and deliver solid operating results, but we
also made meaningful progress to significantly improve our balance
sheet. We are confident that the dual focus on business building and
balance sheet strengthening is the right one and one that will
position us for achieving long-term profitable growth. As for 2004, we
remain confident that we are on track to deliver on our objectives for
the year."
The Company will host a conference call with members of the
investment community on April 29, 2004 at 9:30 AM EDT to discuss the
results of the first quarter. Access to the call is available to the
public at www.revloninc.com.
First Quarter Results
Net sales in the first quarter of 2004 advanced approximately 6%
to $308 million, compared with net sales of $292 million in the first
quarter of 2003. Excluding the impact of returns and allowances
associated with the Company's growth plan(1) on the year-ago period,
net sales advanced approximately 3.5%, largely due to an increase in
International, including the impact of favorable foreign currency
translation, lower regular business returns and allowances, and higher
licensing revenues of approximately $5 million, partially offset by
higher brand support.
In North America(2), net sales grew approximately 1% to $206
million, versus $205 million in the first quarter of 2003. Excluding
the impact of returns and allowances associated with the Company's
growth plan on the year-ago period, net sales declined approximately
2%. This performance primarily reflected higher brand support and
modestly lower shipments, partially offset by higher licensing
revenues, including the prepayment of a renewal fee, and lower regular
business returns and allowances.
In International, net sales grew approximately 18% to $102
million, reflecting growth in Asia and Latin America, as well as the
benefit of favorable foreign currency translation. Excluding the
favorable impact of foreign currency translation, International net
sales advanced approximately 4% for the quarter.
Operating income in the quarter was $20.1 million, versus an
operating loss of $4.2 million in the first quarter of 2003. This
improvement reflected the absence this year of growth plan charges,
which reduced operating income in the prior year quarter by
approximately $11 million, as well as the benefits of higher net
sales (including the aforementioned lower returns and allowances and
increase in licensing revenues), lower display amortization, and
favorability of approximately $3 million associated with a
modification to International benefits. Partially offsetting these
drivers of the profitability improvement was higher brand support in
the quarter. Similarly, Adjusted EBITDA(3) in the first quarter was
$44.5 million, compared with Adjusted EBITDA of $23.4 million in the
first quarter of 2003. Substantially the same factors driving the
significant improvement in operating income also drove the improvement
in Adjusted EBITDA.
Adjusted EBITDA is a non-GAAP measure that is defined in the
footnotes to this release and which is reconciled to the Company's
most directly comparable GAAP measures, net loss and cash flow from or
used for operating activities, in the accompanying financial tables.
Also provided in the accompanying financial tables is a reconciliation
of reported net sales to net sales excluding growth plan charges.
Net loss in the first quarter was $58.2 million, or $0.63 per
diluted share, compared with a net loss of $48.7 million, or $0.91 per
diluted share, in the first quarter of 2003. Net loss in the current
quarter included a loss of approximately $33 million for the early
extinguishment of debt associated with the debt-for-equity exchange
offers consummated during the quarter. Cash flow used for operating
activities in the first quarter of 2004 was $35.6 million, compared
with cash flow used for operating activities of $60.5 million in the
first quarter of 2003.
Market Share Results(4):
In terms of U.S. marketplace performance, according to ACNielsen,
the category for the quarter was down 0.5% versus the same period last
year. The Revlon brand registered a share of 17.0% for the quarter,
essentially even with the 17.1% share the brand achieved in the
year-ago period and up almost a full share point versus the 16.1%
share achieved in the first quarter 2002. The Almay brand posted a
share of 5.4% for the quarter, down 0.5 share points versus the same
period last year, while total Company market share for the quarter was
22.4%, down 0.7 share points versus year-ago.
In other key categories, the Company gained share in hair color
and beauty tools, while market share declined for
antiperspirants/deodorants.
About Revlon
Revlon is a worldwide cosmetics, skin care, fragrance, and
personal care products company. The Company's vision is to become the
world's most dynamic leader in global beauty and skin care. Websites
featuring current product and promotional information can be reached
at www.revlon.com and www.almay.com. Corporate investor relations
information can be accessed at www.revloninc.com. The Company's
brands, which are sold worldwide, include Revlon(R), Almay(R),
Ultima(R), Charlie(R), Flex(R), and Mitchum(R).
Footnotes to Press Release
(1) The Company's growth plan, the implementation of which was
accelerated in the fourth quarter of 2002, involves, among other
things, increasing the effectiveness of the Company's advertising and
in-store promotional marketing, increasing the effectiveness of its
in-store wall displays, discontinuing select products and adjusting
prices on several others, and further strengthening the Company's new
product development process and other organizational capabilities to
accelerate the execution of the plan. Over the 2002 to 2003 period,
the Company incurred charges totaling approximately $135 million
associated with the acceleration of its growth plan, with no
additional charges associated with the acceleration of its plan
expected.
The Company believes that net sales excluding growth plan-related
returns and allowances is useful in understanding net sales
performance excluding the effect of growth plan charges which impacted
the Company's performance in 2003.
(2) North America includes the United States and Canada.
(3) Adjusted EBITDA is defined as net earnings before interest,
taxes, depreciation, amortization, gains/losses on foreign currency
transactions, gains/losses on the early extinguishment of debt,
gains/losses on the sale of assets, and miscellaneous expenses.
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, gains/losses on the early extinguishment of
debt and miscellaneous expenses. 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.
In the accompanying tables, Adjusted EBITDA is reconciled to net
income/(loss) to account for its use as a performance measurement and
to cash flow from/used for operating activities to account for its use
in assessing liquidity. Net income/(loss) and cash flow from/used for
operating activities are the most directly comparable GAAP performance
and cash flow measures, respectively.
(4) All market share and consumption data is U.S. mass-market
dollar volume according to ACNielsen (an independent research entity).
ACNielsen data is an aggregate of the drug channel, Kmart, Target and
Food and Combo stores, and excludes Wal-Mart and regional mass volume
retailers. This data represents approximately 70% of the Company's
U.S. mass-market dollar volume. All Revlon brand share and consumption
data excludes StreetWear.
Forward-Looking Statements
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,
and except for the Company's ongoing obligations under the U.S.
federal securities laws, the Company undertakes no obligation to
publicly update any forward-looking statements, whether as a result of
new information, future events or otherwise. Such forward-looking
statements include, without limitation, the Company's expectations and
estimates about future events, including the Company's expectations
regarding achieving long-term profitable growth, being on track to
deliver on its objectives for 2004, and consummating a series of
additional refinancings intended to extend the maturities of much of
the Company's debt and further reduce its annual interest expense.
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, Quarterly Reports
on Form 10-Q, and Current Reports on Form 8-K (which may be viewed on
the SEC's website at http://www.sec.gov or on the Company's website at
http://www.revloninc.com), as well as reasons including difficulties
or delays in achieving long-term profitable growth and delivering on
its objectives for 2004, and difficulties or delays in, or less than
anticipated benefits associated with, consummating a series of
additional refinancings intended to extend the maturities of much of
the Company's debt and further reduce its annual interest expense.
Factors other than those listed above could cause the Company's
results to differ materially from expected results.
REVLON, INC. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(dollars in millions, except per share data)
Three Months Ended
March 31,
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2004 2003
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Net sales $ 308.4 $ 292.0
Cost of sales 117.1 111.5
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Gross profit 191.3 180.5
Selling, general and administrative expenses 171.9 184.2
Restructuring costs (0.7) 0.5
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Operating income (loss) 20.1 (4.2)
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Other expenses (income):
Interest expense 44.6 41.4
Interest income (1.0) (0.5)
Amortization of debt issuance costs 2.6 2.0
Foreign currency (gains) losses, net (1.4) 0.3
Loss on early extinguishment of debt 32.6 -
Miscellaneous, net 0.1 0.4
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Other expenses, net 77.5 43.6
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Loss before income taxes (57.4) (47.8)
Provision for income taxes 0.8 0.9
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Net loss $ (58.2) $ (48.7)
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Basic and diluted net loss per common share $ (0.63) $ (0.91)
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Weighted average number of common shares
outstanding:
Basic and diluted 92,933,027 53,461,796
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REVLON, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
(dollars in millions)
March 31, December 31,
ASSETS 2004 2003
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(Unaudited)
Current assets:
Cash and cash equivalents $ 53.8 $ 56.5
Trade receivables, net 154.6 182.5
Inventories 151.8 142.7
Prepaid expenses and other 50.7 33.9
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Total current assets 410.9 415.6
Property, plant and equipment, net 128.3 132.1
Other assets 159.6 158.4
Goodwill, net 186.1 186.1
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Total assets $ 884.9 $ 892.2
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LIABILITIES AND STOCKHOLDERS' DEFICIENCY
Current liabilities:
Short-term borrowings - third parties $ 29.8 $ 28.0
Accounts payable 95.9 97.4
Accrued expenses and other 316.9 321.9
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Total current liabilities 442.6 447.3
Long-term debt 1,103.6 1,869.5
Other long-term liabilities 295.1 301.0
Total stockholders' deficiency (956.4) (1,725.6)
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Total liabilities and stockholders'
deficiency $ 884.9 $ 892.2
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REVLON, INC. AND SUBSIDIARIES
UNAUDITED ADJUSTED EBITDA RECONCILIATION
(dollars in millions)
Three Months Ended
March 31,
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2004 2003
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(Unaudited)
Reconciliation to cash flows from operating
activities:
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Net cash used for operating activities $ (35.6) $ (60.5)
Changes in assets and liabilities, net of
acquisitions and dispositions 37.8 42.1
Interest expense, net 42.8 40.2
Foreign currency (gains) losses, net (1.4) 0.3
Miscellaneous, net 0.1 0.4
Provision for income taxes 0.8 0.9
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Adjusted EBITDA $ 44.5 $ 23.4
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Reconciliation to net loss:
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Net loss $ (58.2) $ (48.7)
Interest expense, net 43.6 40.9
Amortization of debt issuance costs 2.6 2.0
Foreign currency (gains) losses, net (1.4) 0.3
Loss on early extinguishment of debt 32.6 -
Miscellaneous, net 0.1 0.4
Provision for income taxes 0.8 0.9
Depreciation and amortization 24.4 27.6
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Adjusted EBITDA $ 44.5 $ 23.4
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REVLON, INC. AND SUBSIDIARIES
UNAUDITED NET SALES DATA
(dollars in millions)
Three Months Ended March 31, 2004
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As reported
As Growth without
reported plan growth plan
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North America $ 205.9 $ - $ 205.9
International 102.5 - 102.5
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Net sales $ 308.4 $ - $ 308.4
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Three Months Ended March 31, 2003
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As reported
As Growth without
reported plan growth plan
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North America $ 204.9 $ 6.0 $ 210.9
International 87.1 - 87.1
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Net sales $ 292.0 $ 6.0 $ 298.0
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CONTACT: Investor Relations Contact:
Maria A. Sceppaguercio, 212-527-5230
or
Media Contact:
Catherine Fisher, 212-527-5727