Revlon Reports 2003 Sales up 16%, New Debt Plan

Revlon, Inc. said full-year net sales rose 16% to $1,299 million (net sales increased 9% excluding the impact of growth plan-related charges) for the year ended Dec. 31, 2003. The company indicated that significant progress was made in 2003 to strengthen the business and position the company to achieve its objective of long-term profitable growth.

Debt-laden Revlon Inc. said it has entered into agreements that would cut its debt by about $930 million, or roughly 50%, with Fidelity Management & Research Co., an institutional investor and MacAndrews & Forbes, its principal shareholder. The New York-based company said it expects that at least $780 million of debt will be eliminated during the first quarter of 2004 through a debt for equity exchange.

“The investments that we have made over the past 18 months to reenergize our brands and strengthen our overall business are beginning to benefit us meaningfully and have been recognized by many of our key customers in the form of incremental space for 2004,” said Revlon president and chief executive officer Jack Stahl. “Our progress now enables us to attract resources to dramatically strengthen our balance sheet by increasing equity and reducing debt.”

The company’s growth plan involves an increase in 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.

Net sales in the fourth quarter of 2003 grew 73% to $368.5 million, compared with net sales of $212.6 million in the fourth quarter of 2002. In North America, net sales for the quarter grew 117% to $248.8 million, versus $114.7 million in the fourth quarter of 2002. Internationally, net sales grew 22% to $119.7 million.

Revlon indicated that, according to ACNielsen, color cosmetics market share for the year advanced 0.3 percentage points for the Revlon and Almay brands combined, marking the first such increase recorded by these two businesses since 1998. The Company further indicated that, after years of trailing category growth rates by an average of some 10 percentage points, Revlon and Almay retail consumption combined outpaced category growth by 1.1 points in 2003, following the achievement of growth in line with the category in 2002.

In addition, the Company led innovation in the color cosmetics category in 2003, with the most new products ranked in the ACNielsen Top 20 New Products list. Specifically, for the year, Revlon and Almay held eight of the Top 20 new color cosmetics products, including the top spot with Revlon ColorStay Overtime Lip.

The company expects 2004 full-year net sales to grow 7% to 8% range and operating margin to improve approximately 200 basis points.