Revlon Attempts to Cut Costs

Revlon Inc. projects to report a modest increase in sales for 2005 and is undertaking an overhaul of its business to cut about 165 jobs (90 of the 165 jobs are in the U.S.) to reduce costs. The company said it’s operating at a loss so far for 2005 but is expecting to report an operating profit for the fourth quarter. Revlon expects full-year sales for 2005 to increase 3% to $1.33 billion from 2004 sales of $1.3 billion. On an adjusted basis, which doesn’t include interest, taxes, depreciation, amortization and other items, Revlon said it still expects 2005 earnings of about $170 million. Thomson Financial expects Revlon to post an adjusted fourth-quarter profit of 18 cents per share and full-year loss of 22 cents per share. The company said the cost-cutting moves will save $15 million a year. It expects to take a 2006 charge of about $10 million to cover employee severance and other related costs, with most of the expenses hitting first-quarter results. Revlon also said parent company MacAndrews & Forbes Holdings Inc., which is controlled by financier Ron Perelman, has agreed to purchase its proportional share of Revlon stock in the offering, and to also buy any remaining shares that other stockholders don’t buy. The company said MacAndrews also agreed to extend an existing $87 million credit line for the company’s consumer products business. Revlon plans to close the $110 million rights offering portion in March and a further $75 million stock offering portion by the end of June.