Revlon, Inc. (NYSE:REV) today announced results for the second
quarter ended June 30, 2015.
This release presents the Company’s results using the following
measures: GAAP as reported (“As Reported”); and non-GAAP
(“Adjusted”), which excludes certain non-operating items from As
Reported results. The Company has also identified certain unusual
items, impacting the comparability of the Company’s
period-over-period results, as seen through the eyes of management.
These unusual items are also excluded from the Company’s Adjusted
measures. As a result of these unusual items, the definition of
Adjusted EBITDA has changed from that used in prior periods.
Therefore, Adjusted EBITDA presented in this release will be
different from amounts reported in prior periods. See footnote (a)
for further discussion of the Company’s non-GAAP measures.
Reconciliations of As Reported results to non-GAAP results are
provided as an attachment.
Second Quarter 2015
Results
Commenting on today’s announcement, Revlon President and Chief
Executive Officer, Lorenzo Delpani, said “This quarter was strong,
with Adjusted1 net sales growth of 4.7% and Adjusted1 EBITDA growth
of 6.5%, measured on an XFX basis and adjusted for comparability.
During this quarter, we completed our acquisition of the CBBeauty
Group and exited our business operations in Venezuela, moving to a
distributor model. We also continued to execute our Strategy of
Value Creation, investing $14.7 million of planned incremental
brand support in the second quarter of 2015. The 6.5% Adjusted
EBITDA growth includes this incremental brand support
investment.”
On an As Reported basis, total Company net sales were $482.4
million in the second quarter of 2015 and $497.9 million in the
second quarter of 2014. The Company’s exit of its business
operations in Venezuela impacted the comparability of
period-over-period results, as Venezuela had no net sales in the
second quarter of 2015 compared to $8.3 million in the second
quarter of 2014. Excluding Venezuela, total Company Adjusted net
sales were $482.4 million in the second quarter of 2015, compared
to $489.6 million in the second quarter of 2014, a decrease of
1.5%. Excluding the impact of foreign currency fluctuations (“XFX”)
of $30.2 million, Adjusted net sales increased $23.0 million, or
4.7%.
Total Company EBITDA was $85.9 million in the second quarter of
2015 and $88.6 million in the second quarter of 2014. After
adjusting for the non-operating items and unusual items that are
reflected in the tables attached to this release, total Company
Adjusted EBITDA was $90.1 million in the second quarter of 2015,
compared to Adjusted EBITDA of $85.7 million in the second quarter
of 2014, representing a 5.1% increase. On an XFX basis, Adjusted
EBITDA increased $5.6 million, or 6.5%.
As Reported net income was $26.0 million in the second quarter
of 2015 and $18.1 million in the second quarter of 2014. Adjusted1
net income was $29.0 million in the second quarter of 2015,
compared to Adjusted net income of $21.8 million in the second
quarter of 2014, an increase of $7.2 million, or 33.0%.
Further details discussing the drivers of the variances in these
Adjusted measures are provided below.
1 See footnote (a) for further discussion of the Company’s
non-GAAP measures. Reconciliations of As Reported results to
certain non-GAAP results are provided as an attachment.
Segment Results
(USD
millions) Three Months Ended June 30, Net Sales
Segment Profit (b) 2015 2014 % Change
XFX
% Change
2015 2014 % Change
XFX
% Change
Consumer $ 354.7 $ 367.3 -3.4 % 1.4 % $ 83.8 $ 80.3 4.4 %
4.0 % Professional 123.4 130.6 -5.5 % 4.1 % 24.3 31.4 -22.6 % -21.3
% Other 4.3 - N.M. N.M. (0.5 ) - N.M.
N.M. Total $ 482.4 $ 497.9 -3.1 % 3.0 % $ 107.6 $ 111.7 -3.7 % -3.6
%
Segment profit is defined in footnote (b) below. Segment profit
excludes unallocated corporate expenses, depreciation and
amortization and the impact of certain non-operating items, as
discussed in footnotes (a) and (c) below. Effective in the second
quarter of 2015, the Company identified a third reporting segment,
Other. The results included within the Other segment include the
operating results and purchase accounting for the acquisition of
the CBBeauty Group (“CBB” and the "CBB Acquisition," respectively).
The results included within the Other segment are not material to
the Company's consolidated results of operations. While the above
table has not been adjusted for the unusual items discussed
earlier, the discussion below quantifies the impact of such unusual
items.
Consumer Segment
Consumer segment net sales were $354.7 million in the second
quarter of 2015, as compared to $367.3 million in the second
quarter of 2014. On an XFX basis, Consumer segment net sales in the
second quarter of 2015 increased 1.4%, primarily driven by higher
net sales of Almay color cosmetics and Revlon color cosmetics,
partially offset by lower net sales of SinfulColors color
cosmetics. The Company’s exit from Venezuela discussed above
negatively impacted Consumer segment net sales, as changing to a
distributor model resulted in no Venezuela net sales in the second
quarter of 2015, compared to Venezuela net sales of $8.3 million in
the second quarter of 2014. Excluding Venezuela, on an XFX basis,
Consumer net sales would have increased by 3.7% in the second
quarter of 2015.
Consumer segment profit in the second quarter of 2015 was $83.8
million, as compared to Consumer segment profit of $80.3 million in
the second quarter of 2014. On an XFX basis, Consumer segment
profit increased 4.0%, primarily driven by higher gross profit as a
result of the increases in net sales, as well as price increases,
favorable sales mix and cost reductions within cost of sales,
partially offset by $7.3 million of higher brand support expenses
for the Company's Consumer brands. The Company’s exit from
Venezuela discussed above negatively impacted Consumer net sales,
as changing to a distributor model resulted in no Venezuela EBITDA
in the second quarter of 2015, compared to $4.6 million in the
second quarter of 2014. Excluding Venezuela, on an XFX basis,
Consumer segment profit would have increased by 11.6% in the second
quarter of 2015.
Professional Segment
Professional segment net sales in the second quarter of 2015
were $123.4 million, compared to net sales of $130.6 million in the
second quarter of 2014. On an XFX basis, Professional segment net
sales in the second quarter of 2015 increased 4.1%, primarily due
to higher net sales of American Crew and Revlon Professional
products.
Professional segment profit in the second quarter of 2015 was
$24.3 million, as compared to Professional segment profit of $31.4
million in the second quarter of 2014. On an XFX basis,
Professional segment profit decreased 21.3% in the second quarter
of 2015, primarily due to $7.0 million of higher brand support
expenses for the Company's Professional brands. In addition,
Professional segment profit in the second quarter of 2014 included
a favorable adjustment of $3.4 million related to a decrease in the
inventory obsolescence reserve, with no similar adjustment in the
second quarter of 2015. These decreases were partially offset by
the increases in net sales discussed above.
Geographic Net Sales - Total
Company
(USD
millions) Three Months Ended June 30,
Net Sales: 2015 2014 %
Change
XFX %Change
United States $ 267.0 $ 255.2 4.6 % 4.6 % International
215.4 242.7 -11.2 % 1.2 % Total Net Sales $ 482.4 $
497.9 -3.1 % 3.0 %
While the above table has not been adjusted for the unusual
items discussed earlier, the discussion below quantifies the impact
of such unusual items.
United States
Total Company U.S. net sales in the second quarter of 2015 were
$267.0 million, compared to $255.2 million in the second quarter of
2014, an increase of 4.6%. Net sales in the U.S. increased in the
Consumer segment, primarily driven by higher net sales of Almay
color cosmetics, Revlon color cosmetics and Revlon ColorSilk hair
color, partially offset by lower net sales of SinfulColors color
cosmetics. Net sales in the U.S. decreased in the Professional
segment primarily due to lower net sales of CND nail products.
International
Total Company International net sales in the second quarter of
2015 were $215.4 million, compared to $242.7 million in the second
quarter of 2014. On an XFX basis, International net sales during
the second quarter of 2015 increased 1.2%, with higher Professional
segment net sales mostly offset by lower Consumer segment net
sales. International net sales increased in the Professional
segment primarily due to higher net sales of American Crew and
Revlon Professional. International net sales decreased in the
Consumer segment primarily driven by the Company’s exit of its
business operations in Venezuela. Excluding Venezuela, on an XFX
basis, International net sales would have increased by 4.8% in the
second quarter of 2015.
Total Company Results
Total Company EBITDA was $85.9 million in the second quarter of
2015 and $88.6 million in the second quarter of 2014.
The Company adjusted its results for the following non-operating
items:
- Non-cash stock compensation of $1.2
million in the second quarter of 2015 and $0.3 million in the
second quarter of 2014;
- Restructuring and related charges,
which were a benefit of $3.0 million in the second quarter of 2015
and a cost of $4.1 million in the second quarter of 2014;
- Acquisition and integration costs of
$4.7 million in the second quarter of 2015 and $0.7 million in the
second quarter of 2014; and
- An unfavorable inventory purchase
accounting adjustment of $0.6 million in the second quarter of
2015.
As further reflected in the footnotes to this release, to
enhance the comparability of the period-over-period results, the
Company further adjusted its results for the following unusual
items:
- EBITDA in Venezuela of nil in the
second quarter of 2015 due to the Company’s exit of its Venezuela
business operations, compared to EBITDA of $4.6 million in the
second quarter of 2014;
- A favorable adjustment of $3.4 million
in the second quarter of 2014 related to a decrease in the
Company’s inventory obsolescence reserve; and
- Deferred consideration of $0.7 million
for the CBB Acquisition recognized in the second quarter of
2015.
After adjusting the Company’s results for the above items, total
Company Adjusted1 EBITDA was $90.1 million in the second quarter of
2015, compared to $85.7 million in the second quarter of 2014, a
5.1% increase. On an XFX basis, Adjusted EBITDA increased $5.6
million, or 6.5%. This increase was primarily due to higher net
sales in both the Consumer and Professional segment, as well as
favorable cost of sales in the Consumer segment, partially offset
by $14.7 million of higher brand support expenses in the second
quarter of 2015.
As Reported net income was $26.0 million in the second quarter
of 2015 and $18.1 million in the second quarter of 2014. Adjusted1
net income was $29.0 million in the second quarter of 2015,
compared to Adjusted net income of $21.8 million in the second
quarter of 2014, an increase of $7.2 million, or 33.0%. The
increase in net income was driven by foreign currency gains as a
result of the Euro revaluation of certain U.S. Dollar denominated
intercompany payables during the second quarter of 2015, as
compared to foreign currency losses in the second quarter of 2014.
As Reported earnings per diluted share was $0.49 in the second
quarter of 2015 and $0.34 in the second quarter of 2014. On an
Adjusted1 basis, earnings per diluted share was $0.55 in the second
quarter of 2015 and $0.42 in the second quarter of 2014.
Six Months 2015
Results
On an As Reported basis, total Company net sales were $920.9
million in the first six months of 2015, compared to $967.7 million
in the first six months of 2014. Venezuela had reported net sales
of $0.9 million in the first six months of 2015 compared to net
sales of $13.2 million in the first six months of 2014. Excluding
Venezuela, total Company Adjusted1 net sales were $920.0 million in
the first six months of 2015, compared to $954.5 million in the
first six months of 2014, a decrease of 3.6%. On an XFX basis,
which impacted net sales by $54.2 million (adjusted to exclude the
XFX impact in Venezuela), Adjusted net sales increased $19.7
million, or 2.1% in the first six months of 2015.
Total Company EBITDA was $156.7 million in the first six months
of 2015, compared to $156.2 million in the first six months of
2014.
The Company adjusted its results for the following non-operating
items:
- Non-cash stock compensation of $2.8
million in the first six months of 2015 and $0.5 million in the
first six months of 2014;
- Restructuring and related charges,
which were a benefit of $2.3 million in the first six months of
2015 and a cost of $17.7 million in the first six months of
2014;
- Acquisition and integration costs of
$5.9 million in the first six months of 2015 and $4.5 million in
the first six months of 2014; and
- An inventory purchase accounting
adjustment of $0.6 million in the first six months of 2015 and $2.6
million in the first six months of 2014.
In addition, the Company further adjusted its results for the
following unusual items:
- Venezuela EBITDA of $0.1 million in the
first six months of 2015 compared to $6.2 million in the first six
months of 2014;
- A favorable adjustment of $3.4 million
in the first six months of 2014 related to a decrease in the
Company’s inventory obsolescence reserve; and
- Deferred consideration of $0.7 million
for the CBB Acquisition recognized in the first six months of
2015.
1 See footnote (a) for further discussion of the Company’s
non-GAAP measures. Reconciliations of As Reported results to
certain non-GAAP results are provided as an attachment.
After adjusting the Company’s results for the above items, total
Company Adjusted1 EBITDA was $164.3 million in the first six months
of 2015, compared to $171.9 million in the first six months of
2014, a decrease of 4.4%. On an XFX basis, Adjusted EBITDA
decreased $5.6 million, or 3.3%. This decrease was primarily due to
$31.3 million of additional brand support in the first six months
of 2015, partially offset by higher net sales and favorable costs
of sales.
Cash Flow for the Six Month
Period
Net cash provided by operating activities in the first six
months of 2015 was $2.5 million, compared to net cash used in
operating activities of $6.4 million in the same period last year,
representing an improvement of $8.9 million. Free cash flow1 used
in the first six months of 2015 was $12.7 million compared to $19.5
million of free cash flow used in the same period last year,
representing an improvement of $6.8 million. The improvements in
cash from operating activities and free cash flow were primarily
driven by less cash used in discontinued operations, as well as
lower payments for interest and pension contributions in the first
six months of 2015; partially offset by higher brand support and
incentive compensation payments in the first six months of
2015.
Second Quarter 2015
Results and Conference Call
The Company will host a conference call with members of the
investment community on July 29, 2015 at 9:30 A.M. EDT to discuss
Second Quarter 2015 results. Access to the call is available to the
public at www.revloninc.com.
1 See footnote (a) for further discussion of the Company’s
non-GAAP measures. Reconciliations of As Reported results to
certain non-GAAP results are provided as an attachment.
Footnotes to Press
Release
(a) Non-GAAP Financial
Measures: Adjusted net sales; Adjusted EBITDA; Adjusted
net income; Adjusted diluted earnings per share; and free cash flow
are non-GAAP financial measures that are reconciled to their most
directly comparable GAAP measures in the accompanying financial
tables (except that Adjusted net sales is reconciled directly in
the text of the press release).
The Company defines Adjusted EBITDA as income from continuing
operations before interest, taxes, depreciation, amortization,
gains/losses on foreign currency fluctuations, gains/losses on the
early extinguishment of debt, miscellaneous expenses (the foregoing
being the “EBITDA Exclusions”), as well as to exclude non-cash
stock compensation expense and certain other non-operating items
that are not directly attributable to the Company's underlying
operating performance (the “Non-Operating Items”). In addition, the
Company has identified certain unusual items impacting the
comparability of the Company’s period-over-period results as seen
through the eyes of management (the “Unusual Items”) and therefore
has presented Adjusted EBITDA on a different basis than that
presented in prior years. The following tables identify the
Non-Operating and Unusual Items excluded for all periods:
(USD millions)
Q2
2015 Q2 2014 Income / (Loss) Adjustments to
EBITDA Non-Operating Items:
Non-cash stock compensation expense $
(1.2 ) $ (0.3 ) Restructuring and related charges
3.0 (4.1 ) Acquisition and integration
costs (4.7 ) (0.7 ) Inventory purchase
accounting adjustment (0.6 ) -
Unusual Items: Venezuela EBITDA
$ - $ 4.6 Inventory obsolescence reserve
- 3.4 Deferred
consideration for CBB Acquisition (0.7 )
- (USD millions)
YTD 2015 YTD 2014 Income / (Loss) Adjustments to
EBITDA Non-Operating Items:
Non-cash stock compensation expense $
(2.8 ) $ (0.5 ) Restructuring and related charges
2.3 (17.7 ) Acquisition and integration
costs (5.9 ) (4.5 ) Inventory purchase
accounting adjustment (0.6 ) (2.6 )
Unusual Items: Venezuela EBITDA
$ 0.1 $ 6.2 Inventory obsolescence reserve
- 3.4 Deferred
consideration for CBB Acquisition (0.7 )
-
Adjusted net income and Adjusted diluted earnings per share
exclude the after-tax impact of the Non-Operating Items and Unusual
Items, as well as loss on early extinguishment of debt and the
foreign currency loss related to the re-measurement of Revlon
Venezuela’s balance sheets.
The Company excludes the EBITDA Exclusions, Non-Operating Items
and Unusual Items, as applicable, in calculating non-GAAP measures
because the Company's management believes that some of these items
may not occur in certain periods, the amounts recognized can vary
significantly from period to period and these items do not
facilitate an understanding of the Company's underlying operating
performance.
Free cash flow is defined as net cash provided by operating
activities, less capital expenditures for property, plant and
equipment, plus proceeds from the sale of certain assets. Free cash
flow excludes proceeds on sale of discontinued operations. Free
cash flow does not represent the residual cash flow available for
discretionary expenditures, as it excludes certain expenditures
such as mandatory debt service requirements, which for the Company
are significant.
The Company's management uses Adjusted net sales, Adjusted
EBITDA, Adjusted net income, Adjusted diluted earnings per share
and free cash flow as operating performance measures (in
conjunction with GAAP measures), as an integral part of its
reporting and planning processes and to, among other things: (i)
monitor and evaluate the performance of the Company's business
operations, financial performance and overall liquidity; (ii)
facilitate management's internal comparisons of the Company's
historical operating performance of its business operations; (iii)
facilitate management's external comparisons of the results of its
overall business to the historical operating performance of other
companies that may have different capital structures and debt
levels; (iv) review and assess the operating performance of the
Company's management team and, together with other operational
objectives, as a measure in evaluating employee compensation and
bonuses; (v) analyze and evaluate financial and strategic planning
decisions regarding future operating investments; and (vi) plan for
and prepare future annual operating budgets and determine
appropriate levels of operating investments.
Management believes that Adjusted net sales, Adjusted EBITDA,
Adjusted net income, Adjusted diluted earnings per share and free
cash flow are useful to investors to provide them with disclosures
of the Company's operating results on the same basis as that used
by management. Additionally, management believes that Adjusted net
sales, Adjusted EBITDA, Adjusted net income and Adjusted diluted
earnings per share provide useful information to investors about
the performance of the Company's overall business because such
measures eliminate the effects of unusual or other infrequent
charges that are not directly attributable to the Company's
underlying operating performance. Additionally, management believes
that providing these non-GAAP measures enhances the comparability
for investors in assessing the Company’s financial reporting.
Management believes that free cash flow is useful for investors
because it provides them with an important perspective on the cash
available for debt repayment and other strategic measures, after
making necessary capital investments in property and equipment to
support the Company's ongoing business operations, and provides
them with the same measures that management uses as the basis for
making resource allocation decisions.
Accordingly, the Company believes that the presentation of
Adjusted net sales, Adjusted EBITDA, Adjusted net income, Adjusted
diluted earnings per share and free cash flow, when used in
conjunction with GAAP financial measures, are useful financial
analysis measures, used by management, as described above, that can
assist investors in assessing the Company's financial condition,
operating performance and underlying strength. Adjusted net sales,
Adjusted EBITDA, Adjusted net income, Adjusted diluted earnings per
share and free cash flow should not be considered in isolation or
as a substitute for their respective most directly comparable As
Reported measures prepared in accordance with GAAP, such as net
income/loss, operating income, diluted earnings per share or net
cash provided by (used in) operating activities. Other companies
may define such non-GAAP measures differently. Also, while EBITDA
is defined differently than Adjusted EBITDA for the Company's
credit agreement, certain financial covenants in its borrowing
arrangements are tied to similar measures. These non-GAAP financial
measures should be read in conjunction with the Company's financial
statements and related footnotes filed with the SEC.
(b) Segment profit is defined as income from continuing
operations for each of the Company's Consumer, Professional and
Other segments, excluding the EBITDA Exclusions. Segment profit
also excludes unallocated corporate expenses and the impact of
certain items that are not directly attributable to the segments'
underlying operating performance, including the impact of the
Non-Operating Items noted above in footnote (a). Unallocated
corporate expenses primarily relate to general and administrative
expenses related to the corporate administrative organization.
These expenses are recorded in unallocated corporate expenses as
these items are centrally directed and controlled. The Company does
not have any material inter-segment sales.
(c) During the second quarter of 2015, the Company removed
pension-related costs from the measurement of its reportable
segment results. As a result, $2.1 million in pension-related costs
were reclassified from the measurement of the Consumer segment
profit for the three months ended June 30, 2014 and have been
included as a component of unallocated corporate expenses for such
period.
Forward-Looking
Statements
Statements made in this press release, which are not historical
facts, are forward-looking. 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
statement, whether to reflect actual results of operations; changes
in financial condition; changes in general U.S. or international
economic or industry conditions and/or conditions in the Company’s
reportable segments; changes in estimates, expectations or
assumptions; or other circumstances, conditions, developments or
events arising after the issuance of this press release. Actual
results may differ materially from such forward-looking statements
for a number of reasons, including those set forth in our filings
with the SEC, including, without limitation, our 2014 Annual Report
on Form 10-K that we filed with the SEC on March 12, 2015 and our
Quarterly Reports on Form 10-Q and Current Reports on Form 8-K that
we have filed or will file with the SEC during 2014 and 2015 (which
may be viewed on the SEC's website at http://www.sec.gov or on our
website at http://www.revloninc.com). Other factors could also
cause the Company’s results to differ materially from expected
results. The business and financial materials and any other
statement or disclosure on or made available through the Company’s
websites or other websites referenced herein shall not be
incorporated by reference into this release.
REVLON, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
(dollars in millions, except share and per share amounts)
Three Months Ended Six Months
Ended June 30, June 30, 2015 2014
2015 2014 (Unaudited) (Unaudited)
Net sales $ 482.4 $ 497.9 $ 920.9 $ 967.7 Cost of sales
161.3 167.2 303.6 330.7 Gross profit 321.1 330.7 617.3 637.0
Selling, general and administrative expenses 259.3 263.6 508.6
509.8 Acquisition and integration costs 4.7 0.7 5.9 4.5
Restructuring charges and other, net (3.6) 3.8 (3.1) 17.3
Operating income 60.7 62.6 105.9 105.4 Other expenses, net:
Interest expense 20.5 21.0 40.5 43.3 Amortization of debt issuance
costs 1.4 1.4 2.8 2.8 Loss on early extinguishment of debt - 0.1 -
2.0 Foreign currency (gains) losses, net (7.9) 7.2 8.0 8.6
Miscellaneous, net 0.2 - 0.2 0.1 Other expenses, net 14.2 29.7 51.5
56.8 Income from continuing operations before income taxes
46.5 32.9 54.4 48.6 Provision for income taxes 20.5 18.5 29.2 25.5
Income from continuing operations, net of taxes 26.0 14.4 25.2 23.1
Income (loss) from discontinued operations, net of taxes - 3.7
(0.1) 0.5 Net income $ 26.0 $ 18.1 $ 25.1 $ 23.6
Other comprehensive income (loss): Currency translation adjustment,
net of tax 0.8 (0.4) (12.6) 1.2 Amortization of pension related
costs, net of tax 1.8 1.1 3.5 2.3 Revaluation of derivative
financial instruments, net of tax (0.1) (1.9) (2.0) (2.9) Other
comprehensive income (loss) 2.5 (1.2) (11.1) 0.6 Total
comprehensive income $ 28.5 $ 16.9 $ 14.0 $ 24.2 Basic
earnings per common share: Continuing operations $ 0.50 $ 0.27 $
0.48 $ 0.44 Discontinued operations - 0.07 - 0.01 Net income $ 0.50
$ 0.34 $ 0.48 $ 0.45 Diluted earnings per common share:
Continuing operations $ 0.49 $ 0.27 $ 0.48 $ 0.44 Discontinued
operations - 0.07 - 0.01 Net income $ 0.49 $ 0.34 $ 0.48 $ 0.45
Weighted average number of common shares outstanding: Basic
52,440,580 52,356,798 52,413,552 52,356,798 Diluted 52,609,805
52,386,381 52,587,868 52,377,214
REVLON, INC. AND SUBSIDIARIES CONSOLIDATED CONDENSED
BALANCE SHEETS (dollars in millions) June
30, December 31, 2015 2014
(Unaudited)
ASSETS Current assets: Cash and cash equivalents $ 199.0 $
275.3 Trade receivables, net 256.4 238.9 Inventories 196.6 156.6
Deferred income taxes - current 59.2 58.4 Prepaid expenses and
other 61.5 44.6 Total current assets 772.7 773.8 Property, plant
and equipment, net 205.0 212.0 Deferred income taxes - noncurrent
35.9 53.1 Goodwill 478.3 464.1 Intangible assets, net 325.0 327.8
Other assets 109.7 113.3 Total assets $ 1,926.6 $ 1,944.1
LIABILITIES AND STOCKHOLDERS' DEFICIENCY Current
liabilities: Short-term borrowings $ 8.5 $ 6.6 Current portion of
long-term debt 6.9 31.5 Accounts payable 189.0 153.5 Accrued
expenses and other 246.2 273.3 Total current liabilities 450.6
464.9 Long-term debt 1,829.6 1,832.4 Long-term pension and other
post-retirement plan liabilities 192.3 200.9 Other long-term
liabilities 83.3 90.0 Total stockholders' deficiency (629.2)
(644.1) Total liabilities and stockholders' deficiency $ 1,926.6 $
1,944.1
REVLON, INC. AND SUBSIDIARIES CONSOLIDATED
STATEMENTS OF CASH FLOWS (dollars in millions)
Six Months Ended June 30, 2015
2014 (Unaudited) CASH FLOWS FROM
OPERATING ACTIVITIES: Net income $ 25.1 $ 23.6 Adjustments to
reconcile net income to net cash provided by (used in) operating
activities: Depreciation and amortization 50.8 50.8 Foreign
currency losses from re-measurement 8.8 7.4 Amortization of debt
discount 0.7 0.7 Stock-based compensation amortization 2.8 0.5
Provision for deferred income taxes 17.9 20.0 Loss on early
extinguishment of debt - 2.0 Amortization of debt issuance costs
2.8 2.8 Gain on sale of certain assets (3.0) (0.1) Pension and
other post-retirement income (1.3) (2.6) Change in assets and
liabilities: Increase in trade receivables (18.7) (22.1) Increase
in inventories (36.1) (14.7) Increase in prepaid expenses and other
current assets (18.3) (4.3) Increase in accounts payable 29.6 4.3
Decrease in accrued expenses and other current liabilities (27.7)
(34.0) Pension and other post-retirement plan contributions (5.2)
(11.7) Purchases of permanent displays (22.0) (26.3) Other, net
(3.7) (2.7) Net cash provided by (used in) operating activities 2.5
(6.4)
CASH FLOWS FROM INVESTING ACTIVITIES: Capital
expenditures (17.2) (13.3) Business acquisitions, net of cash
acquired (34.2) - Proceeds from the sale of certain assets 2.0 0.2
Net cash used in investing activities (49.4) (13.1)
CASH
FLOWS FROM FINANCING ACTIVITIES: Net increase in short-term
borrowings and overdraft 6.6 7.4 Repayment under the Amended and
Restated Senior Subordinated Term Loan - (58.4) Repayments under
the Acquisition Term Loan (15.9) (3.5) Prepayments under the 2011
Term Loan (12.1) - Payment of financing costs - (1.8) Other
financing activities (2.1) (1.4) Net cash used in financing
activities (23.5) (57.7) Effect of exchange rate changes on cash
and cash equivalents (5.9) (9.2) Net decrease in cash and cash
equivalents (76.3) (86.4) Cash and cash equivalents at beginning of
period 275.3 244.1 Cash and cash equivalents at end of period $
199.0 $ 157.7 Supplemental schedule of cash flow
information: Cash paid during the period for: Interest $ 37.9 $
45.3 Income taxes, net of refunds $ 11.0 $ 12.7 Supplemental
schedule of non-cash investing and financing activities: Treasury
stock received to satisfy minimum tax withholding liabilities $ 2.0
$ -
REVLON, INC. AND SUBSIDIARIES EBITDA
AND ADJUSTED EBITDA RECONCILIATION (dollars in millions)
Three Months Ended June
30, 2015 2014 (Unaudited)
Reconciliation to net income:
Net income $ 26.0 $ 18.1 Income from discontinued operations, net
of taxes - 3.7 Income from continuing operations, net of taxes 26.0
14.4 Interest expense 20.5 21.0 Amortization of debt
issuance costs 1.4 1.4 Loss on early extinguishment of debt - 0.1
Foreign currency (gains) losses, net (7.9) 7.2 Miscellaneous, net
0.2 - Provision for income taxes 20.5 18.5 Depreciation and
amortization 25.2 26.0 EBITDA $ 85.9 $ 88.6
Non-operating items: Non-cash stock compensation expense 1.2 0.3
Restructuring and related charges (3.0) 4.1 Acquisition and
integration costs 4.7 0.7 Inventory purchase accounting adjustment
0.6 - Unusual items: Venezuela EBITDA - (4.6) Inventory
obsolescence reserve - (3.4) Deferred consideration for CBB
Acquisition 0.7 - Adjusted EBITDA $ 90.1 $ 85.7
Six Months Ended June 30, 2015
2014 (Unaudited) Reconciliation to net income:
Net income $ 25.1 $ 23.6 (Loss) income from discontinued
operations, net of taxes (0.1) 0.5 Income from continuing
operations, net of taxes 25.2 23.1 Interest expense 40.5
43.3 Amortization of debt issuance costs 2.8 2.8 Loss on early
extinguishment of debt - 2.0 Foreign currency losses, net 8.0 8.6
Miscellaneous, net 0.2 0.1 Provision for income taxes 29.2 25.5
Depreciation and amortization 50.8 50.8 EBITDA $ 156.7 $
156.2 Non-operating items: Non-cash stock compensation
expense 2.8 0.5 Restructuring and related charges (2.3) 17.7
Acquisition and integration costs 5.9 4.5 Inventory purchase
accounting adjustment 0.6 2.6 Unusual items: Venezuela
EBITDA (0.1) (6.2) Inventory obsolescence reserve - (3.4) Deferred
consideration for CBB Acquisition 0.7 - Adjusted EBITDA $
164.3 $ 171.9
REVLON, INC. AND SUBSIDIARIES
SEGMENT PROFIT RECONCILIATION (dollars in millions)
Three Months Ended June 30, 2015
2014 (Unaudited) Segment Net Sales:
Consumer $ 354.7 $ 367.3 Professional 123.4 130.6 Other 4.3
-
Total Segment Net Sales $
482.4 $ 497.9 Segment
Profit: Consumer $ 83.8 $ 80.3 Professional 24.3 31.4 Other
(0.5 ) -
Total Segment Profit $
107.6 $ 111.7 Reconciliation
to income from continuing operations before income taxes:
Income from continuing operations before income taxes $ 46.5 $ 32.9
Interest expense 20.5 21.0 Amortization of debt issuance
costs 1.4 1.4 Foreign currency (gains) losses, net (7.9 ) 7.2 Loss
on early extinguishment of debt - 0.1 Miscellaneous, net 0.2
- Operating income 60.7 62.6 Unallocated
Corporate Expenses 18.2 18.0 Depreciation and amortization 25.2
26.0 Non-operating items: Non-cash stock compensation
expense 1.2 0.3 Restructuring and related charges (3.0 ) 4.1
Acquisition and integration costs 4.7 0.7 Inventory purchase
accounting adjustment 0.6 - Segment Profit $
107.6 $ 111.7
REVLON, INC. AND
SUBSIDIARIES SEGMENT PROFIT RECONCILIATION (dollars
in millions) Six Months Ended June 30,
2015 2014 (Unaudited) Segment
Net Sales: Consumer $ 679.0 $ 706.8 Professional 237.6 260.9
Other 4.3 -
Total Segment Net Sales
$ 920.9 $ 967.7
Segment Profit: Consumer $ 146.0 $ 149.8 Professional 53.5
63.3 Other (0.5 ) -
Total Segment Profit
$ 199.0 $ 213.1
Reconciliation to income from continuing operations before
income taxes: Income from continuing operations before income
taxes $ 54.4 $ 48.6 Interest expense 40.5 43.3 Amortization
of debt issuance costs 2.8 2.8 Foreign currency losses, net 8.0 8.6
Loss on early extinguishment of debt - 2.0 Miscellaneous, net
0.2 0.1 Operating income 105.9 105.4
Unallocated Corporate Expenses 35.3 31.6 Depreciation and
amortization 50.8 50.8 Non-operating items: Non-cash stock
compensation expense 2.8 0.5 Restructuring and related charges (2.3
) 17.7 Acquisition and integration costs 5.9 4.5 Inventory purchase
accounting adjustment 0.6 2.6 Segment Profit $
199.0 $ 213.1
REVLON, INC. AND
SUBSIDIARIES ADJUSTED NET INCOME AND ADJUSTED DILUTED
EARNINGS PER SHARE RECONCILIATION (dollars in millions)
Three Months Ended June 30,
2015 2014 (Unaudited)
Reconciliation to net income and
diluted earnings per share:
Net income $ 26.0 $ 18.1 Non-operating items (after-tax):
Foreign currency loss, Venezuela re-measurement - 6.0 Restructuring
and related charges (1.2 ) 3.9 Acquisition and integration costs
2.9 0.5 Inventory purchase accounting adjustment 0.6 -
Unusual items (after-tax):
Venezuela EBITDA
- (4.6 ) Inventory obsolescence reserve - (2.1 )
Deferred consideration for CBB
Acquisition
0.7 - Adjusted net income $ 29.0 $ 21.8
Net Income: Diluted earnings per common share 0.49
0.34 Adjustment to diluted earnings per common share 0.06
0.08 Adjusted diluted earnings per common share $ 0.55
$ 0.42 U.S. GAAP weighted average number of
common shares outstanding: Diluted 52,609,805 52,386,381
Six Months
Ended June 30, 2015 2014
(Unaudited)
Reconciliation to net income and
diluted earnings per share:
Net income $ 25.1 $ 23.6 Non-operating items (after-tax):
Loss on early extinguishment of debt
- 1.2 Foreign currency loss, Venezuela re-measurement 1.9 6.0
Restructuring and related charges (0.5 ) 12.6 Acquisition and
integration costs 3.6 2.8 Inventory purchase accounting adjustment
0.6 1.8 Unusual items (after-tax): Venezuela EBITDA (0.1 )
(6.2 ) Inventory obsolescence reserve - (2.1 ) Deferred
consideration for CBB Acquisition 0.7 -
Adjusted net income $ 31.3 $ 39.7 Net Income:
Diluted earnings per common share 0.48 0.45 Adjustment to diluted
earnings per common share 0.12 0.31 Adjusted diluted
earnings per common share $ 0.60 $ 0.76 U.S.
GAAP weighted average number of common shares outstanding: Diluted
52,587,868 52,377,214
REVLON, INC.
AND SUBSIDIARIES FREE CASH FLOW RECONCILIATION
(dollars in millions) Six Months
Ended June 30, 2015 2014
(Unaudited) Reconciliation to net cash provided by (used
in) operating activities: Net cash provided by (used in)
operating activities $ 2.5 $ (6.4 ) Less capital
expenditures (17.2 ) (13.3 ) Plus proceeds from the sale of certain
assets 2.0 0.2 Free cash flow $ (12.7 ) $
(19.5 )
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