Revlon Reports 3Q and Nine-Month Results

Revlon, Inc., New York, NY, reported results for the company’s third quarter and nine months ended Sept. 30, 2004. Executives said adjusted EBITDA for the third quarter of 2004 grew to $26 million, compared to $15 million in the prior-year period. Revlon also reconfirmed its previous guidance of achieving adjusted EBITDA of about $190 million in 2004.

“We are pleased with the progress we made in the third quarter to strengthen both our business and our balance sheet,” said Jack Stahl, Revlon’s president and chief executive officer.

“Our year-to-date results have positioned us to deliver our adjusted EBITDA target of approximately $190 million in 2004, up significantly versus the adjusted EBITDA we generated in 2003. Clearly, our productivity initiatives are proving to be an important driver of our financial progress this year, particularly given the softness of the color cosmetics category in the U.S. mass market.”

For the third quarter 2004, net sales declined about 7% to $294 million, compared with net sales of $317 million in the third quarter of 2003. Gross sales in the third quarter of 2004 were modestly higher, Revlon executives said. The net sales performance in the current year’s third quarter primarily reflected higher provisions for returns, allowances and discounts combined, partially offset by favorable foreign currency translation in the international segment. Excluding the favorable impact of foreign currency translation, net sales were down approximately 9%.

Operating loss was $2 million for the third quarter, compared to an operating loss of $7.9 million in the prior-year third quarter. Revlon also reported a net loss of $91.6 million in the third quarter of 2004, compared to a net loss of $54.7 million in the third quarter 2003. This included expenses of $59 million associated with the company’s refinancing activities completed during the quarter.

“For the first nine months of 2004, operating income was $16.3 million compared to an operating loss of $15.2 million in the prior-year period. The company reported a net loss of $188.7 million for the first nine months of 2004, including approximately $91 of fees and expenses associated with Revlon’s 2004 exchange of offers and refinancing activities. This compares to a net loss of $141.2 million in the first nine months of 2003.

Moving forward, “We will continue to take what we believe are the appropriate actions to create long-term value, by capitalizing on the underlying strengthening of our brands, consumer partnerships and organization,” Mr. Stahl said. “In 2005, to further accelerate our progress and the creation of long-term value, we plan to reinvest much, if not all, of the expected margin benefits from our productivity initiatives back into our brands to drive long-term growth. We believe that doing so at this stage of our turnaround is the right course of action and one that will result in long-term value creation.”