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revlon analysis

revlon analysis

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Published by: mano102 on Mar 16, 2010
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11/04/2012

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Revlon Reports 2009 Results
February 25, 2010 07:48 AM Eastern Time
NEW YORK--(EON: Enhanced Online News)--Revlon, Inc. (NYSE: REV) today announced results for the yearand the fourth quarter ended December 31, 2009.2009 results compared to 2008:
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Net sales of $1,295.9 million compared to $1,346.8 million, a decrease of 3.8%. Excluding unfavorableforeign currency fluctuations of $26.0 million, net sales declined by 1.8% in 2009.
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Operating income of $170.8 million compared to $155.0 million.
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Income from continuing operations of $48.5 million, or $0.94 per diluted share
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, compared to $13.1 million,or $0.26 per diluted share.
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Net income of $48.8 million, or $0.94 per diluted share, compared to $57.9 million, or $1.13 per dilutedshare. Net income in 2008 included income from discontinued operations of $44.8 million, or $0.87 perdiluted share.
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Adjusted EBITDA
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of $236.5 million compared to $248.1 million.
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Operating income, income from continuing operations, net income, and Adjusted EBITDA in 2009 included$21.3 million of charges in restructuring and other, primarily related to the restructuring actions announced inMay 2009, while 2008 benefited from a net gain in restructuring and other of $8.4 million.
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Income from continuing operations and net income in 2009 included $5.8 million of net charges related toearly extinguishment of debt and $8.9 million of foreign currency losses, compared to $0.7 million and $0.1million, respectively, in 2008.
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Net cash provided by operating activities of $109.5 million, compared to $33.1 million. Free cash flow
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of $96.8 million compared to $26.0 million.Commenting on today
s announcement, Revlon President and Chief Executive Officer, Alan T. Ennis, said,
Theseresults demonstrate the continued execution of our business strategy. We continue to invest in our brands and hadgood marketplace performance, which included launching innovative, high quality, consumer preferred products. Inaddition, we improved our capital structure by reducing debt by $81 million and refinancing a portion of our debt,extending our nearest term maturities.
2009 Results
 Net sales in 2009 were $1,295.9 million, a decrease of $50.9 million, or 3.8%, compared to net sales of $1,346.8million in 2008. Excluding unfavorable foreign currency fluctuations of $26.0 million, net sales decreased by 1.8%,driven primarily by lower net sales of Revlon and Almay color cosmetics and certain beauty care products, partiallyoffset by higher net sales of Revlon ColorSilk hair color.In the United States, net sales in 2009 were $747.9 million, a decrease of $34.7 million, or 4.4%, compared to$782.6 million in 2008, driven primarily by lower net sales of Revlon and Almay color cosmetics and Mitchum anti-perspirant deodorant, partially offset by higher net sales of Revlon ColorSilk hair color.In the Company
s international operations, net sales in 2009 were $548.0 million, a decrease of $16.2 million or2.9%, compared to $564.2 million in 2008. Excluding unfavorable foreign currency fluctuations of $26.0 million, netsales increased 1.7%, driven by higher net sales of Revlon ColorSilk hair color, Mitchum anti-perspirant deodorantand Revlon color cosmetics, partially offset by lower net sales of certain beauty care products and Almay colorcosmetics. Higher net sales in the Latin America and Asia Pacific regions were partially offset by lower net sales inthe Europe region.
 
Operating income was $170.8 million in 2009 compared to $155.0 million in 2008. Adjusted EBITDA was $236.5million in 2009 compared to $248.1 million in 2008. Operating income and Adjusted EBITDA in 2009 benefitedfrom lower advertising expenses as a result of lower advertising rates while increasing the level of media support, andthe realization of planned restructuring savings from the organizational restructuring announced in May 2009.Operating income further benefited from lower permanent display amortization in 2009. Operating income andAdjusted EBITDA in 2009 included pension expense of $25.0 million, compared to $7.6 million in 2008 andincluded a charge of $21.3 million in restructuring and other in 2009, compared to a net gain in restructuring andother of $8.4 million in 2008.Income from continuing operations in 2009 was $48.5 million, or $0.94 per diluted share, compared to $13.1million, or $0.26 per diluted share in 2008. The improvement was driven by a decrease in interest expense of $26.7million, an increase in operating income of $15.8 million and a decrease in the provision for income taxes of $7.8million. In 2009, income from continuing operations included restructuring charges and other of $21.3 million,compared to a net gain of $8.4 million in 2008.Net income in 2009 was $48.8 million, or $0.94 per diluted share, which included $21.3 million of restructuringcharges and other, compared to $57.9 million, or $1.13 per diluted share, in 2008. Net income in 2008 includedincome from discontinued operations of $44.8 million, or $0.87 per diluted share, and a net gain of $8.4 million inrestructuring charges and other.Net cash provided by operating activities in 2009 was $109.5 million compared to $33.1 million in 2008 and freecash flowin 2009 was $96.8 million compared to $26.0 million in 2008. The improvement was driven by lowerinterest payments, improved operating income, working capital efficiency and lower permanent display purchases.
Fourth Quarter 2009 Results
 Net sales in the fourth quarter of 2009 were $344.6 million, compared to $334.2 million in the fourth quarter of 2008, an increase of $10.4 million, or 3.1%. Excluding favorable foreign currency fluctuations of $16.8 million, netsales decreased by 1.9%, driven primarily by lower net sales of Revlon and Almay color cosmetics, partially offsetby higher net sales of Revlon ColorSilk hair color.In the United States, net sales in the fourth quarter of 2009 were $187.0 million, a decrease of $12.6 million, or6.3%, compared to $199.6 million in the same period last year, driven primarily by lower net sales of Revlon andAlmay color cosmetics and Mitchum anti-perspirant deodorant, partially offset by higher net sales of RevlonColorSilk hair color.In the Company
s international operations, net sales in the fourth quarter of 2009 were $157.6 million, an increase of $23.0 million or 17.1%, compared to $134.6 million in the same period last year. Excluding favorable foreigncurrency fluctuations of $16.8 million, net sales increased 4.6%, driven by higher net sales of Revlon ColorSilk haircolor, Mitchum anti-perspirant deodorant and certain beauty care products, partially offset by lower net sales of Revlon color cosmetics. Higher net sales in the Latin America region were partially offset by lower net sales in theEurope region, while Asia Pacific net sales were essentially unchanged year over year.Operating income in the fourth quarter of 2009 was $62.3 million, compared to $44.0 million in the same period lastyear. Adjusted EBITDA in the fourth quarter of 2009 was $77.9 million compared to $66.7 million in the sameperiod last year. Operating income and Adjusted EBITDA in the fourth quarter of 2009 benefited from lowermanufacturing costs related to favorable sales mix, lower material and freight costs as well as lower selling, generaland administrative expenses. Fourth quarter 2009 operating income and Adjusted EBITDA included pensionexpense of $6.6 million, compared to $1.8 million in the fourth quarter of 2008. Operating income and AdjustedEBITDA in 2008 included a charge of $2.9 million in restructuring and other.Income from continuing operations in the fourth quarter of 2009 was $12.8 million, or $0.25 per diluted share,compared to $11.2 million, or $0.22 per diluted share, in the same period last year. The improvement was drivenprimarily by an increase in operating income of $18.3 million and a decrease in interest expense of $5.9 million,
 partially offset by an early extinguishment of debt expense of $13.6 million related to the refinancing of the 9 ½ %Senior Notes due April 2011 with the new 9 ¾ % Senior Secured Notes due November 2015 and a higher 
provision for income taxes of $8.7 million. Income from continuing operations in 2008 included $2.9 million inrestructuring charges and other.
 
Net income in the fourth quarter of 2009 was $12.8 million, or $0.24 per diluted share, compared to $11.3 million,or $0.22 per diluted share, in the same period last year.Net cash provided by operating activities in the fourth quarter of 2009 was $32.3 million compared to net cash usedin operating activities of $10.8 million in the same period last year. Free cash flow in the fourth quarter of 2009 was$28.2 million compared to negative free cash flow of $12.9 million in the same period last year.Adjusted EBITDA and free cash flow are non-GAAP measures that are defined in the footnotes to this release andare reconciled in the case of Adjusted EBITDA to net income and in the case of free cash flow to net cash providedby (used in) operating activities, their most directly comparable GAAP measures, respectively, in the accompanyingfinancial tables.
U.S. Mass Retail Share Results (ACNielsen)
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 U.S. mass retail dollar share results, according to ACNielsen, for Revlon and Almay color cosmetics, RevlonColorSilk hair color, Mitchum anti-perspirant deodorant, and Revlon Beauty Tools for the year and the fourthquarter are summarized in the tables below:
 Below is a commentary on aspects of U.S. dollar volume and dollar share of certain brand and product ranking, based on ACNielsen data (unless otherwise noted, 2009 and fourth quarter volume and/or sharegrowth is compared to the same period in 2008):
 Color CosmeticsThe U.S. mass color cosmetics category dollar volume grew by 1.5% in 2009, and grew by 2.6% in the fourthquarter of 2009 versus the prior year.Revlon Color CosmeticsRevlon color cosmetics dollar volume increased 1.3% resulting in a share of 12.7%, unchanged compared to 2008.In the fourth quarter of 2009, dollar volume increased 6.1% resulting in a share of 12.6% compared to a share of 12.2% in the fourth quarter of 2008. Revlon color cosmetics share benefited from successful 2009 new productintroductions.Revlon continued to lead the lip segment in 2009 with a 22.3% share, driven by the success of Revlon ColorStayUltimate liquid lipstick, which was the number twelve ACNielsen new product. Continued positive performance by
Revlon Crème Gloss and Revlon Matte lipstick added to Revlon’
s lip segment results. In the eye segment, Revlondollar volume increased 4.2% in the year and 12.5% in the fourth quarter of 2009 as Revlon DoubleTwist mascaraand a range of eye liners continued their strong performance. In the face segment, Revlon benefited from the newRevlon Age Defying Spa range and the new Revlon ColorStay Minerals introductions. The positive performance of 
$ Share %Point20092008ChangeRevlon
Color Cosmetics 12.7 12.7 0.0
Almay
5.4 5.9 -0.5
RevlonColorSilk
Hair Color 9.7 8.3 1.4
Mitchum
Anti-Perspirant Deodorant4.6 5.0 -0.4
Revlon
Beauty Tools 21.0 18.8 2.2
$ Share %PointQ4 2009Q4 2008ChangeRevlon
Color Cosmetics 12.6 12.2 0.4
Almay
5.2 5.9 -0.7
RevlonColorSilk
Hair Color 10.7 8.7 2.0
Mitchum
Anti-Perspirant Deodorant4.4 4.8 -0.4
Revlon
Beauty Tools 21.2 18.4 2.8

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