Top Companies Report

16. Revlon

July 10, 2013

New York, NY
212.572.4000
www.revlon.com

Sales: $1.4 billion. Net income: $51 million.

Key Personnel: Alan T. Ennis, president and chief executive officer; Steven Berns, executive vice president; Chris Elshaw, executive vice president and chief operating officer.

Major Products: Color cosmetics and skin care products sold under the Revlon and Almay brand names.

New Products: Revlon—PhotoReady BB Cream, ColorStay Ultimate Suede Lipstick, Just Bitten Kissable Balm, Nail Art, Luxurious ColorSilk Buttercream; Almay—Smart Shade Mousse makeup; Pure Ice and Bon Bons (acquisitions).

Comments: Sales rose 3.2% last year, Revlon’s 80th anniversary, driven by higher sales in US, Latin America and Canada and Asia Pacific, partially offset by lower net sales in Europe, Middle East and Africa.

US sales increased 5.6% to nearly $800 million, driven by higher sales of Revlon color cosmetics and Sinful Colors color cosmetics, as well as the inclusion of net sales of Pure Ice color cosmetics beginning in July 2012. The gains were partially offset by lower sales of Almay color cosmetics, the company said.

Sales in Asia-Pacific increased 2.4% to almost $239 million, driven primarily by net sales of Revlon color cosmetics. Gains in Japan were partially offset by a decline in China.

In Europe, the Middle East and Africa, sales fell 11.6% to about $184 million. Sales fell in Italy and France, and rose in South Africa.

Sales in Latin America and Canada increased nearly 12% to $203 million. Revlon color cosmetics, Revlon ColorSilk hair color and Almay color cosmetics.

In 2012, Walmart accounted for 22% of total sales.

For the first quarter of 2013, sales rose less than 1% to nearly $332 million, but the company reported a net loss of $6.9 million, compared to net income of $8.5 million the year before. Higher net sales of Revlon and SinfulColors color cosmetics and the inclusion of the net sales of Pure Ice, partially offset by lower net sales of Almay color cosmetics and Revlon ColorSilk hair color.

US sales increased 4% to $192.1 million during the quarter, driven primarily by higher sales of Revlon and SinfulColors color cosmetics and the inclusion of the net sales of Pure Ice, partially offset by lower net sales of Almay color cosmetics and Revlon ColorSilk hair color.

In Asia Pacific, sales fell 4.5% to $53.6 million, primarily due to lower net sales of Revlon color cosmetics in China, partially offset by higher net sales of Revlon color cosmetics in Japan and the introduction of SinfulColors color cosmetics in Australia.
In Europe, Middle East and Africa, sales fell 11% to $40.7 million, due to lower net sales of both Revlon color cosmetics and other beauty care products in France.

In Latin America and Canada, sales rose 3.2% to $45.5 million due to higher net sales of Revlon color cosmetics throughout the region and higher net sales of other beauty care products in Argentina.

Maybe things are turning around, but when Ron Perelman is your chairman, nothing ever seems quite right. Just last month, Revlon paid $850,000 in penalties after the Securities and Exchange Commission (SEC) charged the company with misleading shareholders in a “going private” transaction.  According to the SEC, in 2009, Revlon’s controlling shareholder, MacAndrews and Forbes (M&F), asked the company to offer shareholders the option to exchange common shares for preferred shares. The exchanged shares would then be provided to M&F to pay down Revlon’s debt. A third-party financial advisor evaluated the adequacy of the plan, but the company did not reveal to shareholders that the advisor deemed the deal inadequate, alleges the SEC.

Despite having one of the best brand names in the business, Revlon remains saddled with debt and that’s proving to be a drag on its valuation. 
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