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REVLON INC Reports Operating Results (10-Q)

October 28, 2010 | About:
10qk

10qk

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REVLON INC (REV) filed Quarterly Report for the period ended 2010-09-30.

Revlon Inc has a market cap of $736.3 million; its shares were traded at around $14.16 with a P/E ratio of 10.8 and P/S ratio of 0.6. REV is in the portfolios of Mario Gabelli of GAMCO Investors, Jim Simons of Renaissance Technologies LLC, Steven Cohen of SAC Capital Advisors.

Highlight of Business Operations:

Consolidated net sales in the third quarter of 2010 were $319.0 million, a decrease of $7.2 million, or 2.2%, compared to $326.2 million in the third quarter of 2009. Consolidated net sales for the nine-month period ended September 30, 2010 were $952.2 million, an increase of $0.9 million, or 0.1%, compared to $951.3 million for the nine-month period ended September 30, 2009. Excluding the unfavorable impact of foreign currency fluctuations of $5.8 million, consolidated net sales in the third quarter of 2010 were essentially unchanged from the third quarter of 2009, as lower net sales in the U.S. were largely offset by higher net sales in the Companys Latin America and Europe, Middle East and Africa regions. Net sales in the Companys Canada and Asia Pacific regions in the third quarter of 2010 were essentially unchanged from the third quarter of 2009. Excluding the favorable impact of foreign currency fluctuations of $2.7 million, consolidated net sales in the nine-month period ended September 30, 2010 were essentially unchanged from the nine-month period ended September 30, 2009, as lower net sales in the U.S. and the Companys Asia Pacific region were largely offset by higher net sales in the Companys Latin America and Europe, Middle East and Africa regions. Net sales in the Companys Canada region in the nine-month period ended September 30, 2010 were essentially unchanged from the nine-month period ended September 30, 2009.

Consolidated net income for the third quarter of 2010 was $12.5 million, compared to $23.1 million in the third quarter of 2009. The decline in consolidated net income in the third quarter of 2010, compared to the third quarter of 2009, was primarily due to $13.9 million of higher SG&A expenses, driven primarily by $16.3 million of higher advertising expenses to support the Companys brands. In the nine-month period ended September 30, 2010, consolidated net income was $31.1 million, compared to $36.0 million in the nine-month period ended September 30, 2009. The decline in consolidated net income in the nine-month period ended September 30, 2010 compared to the nine-month period ended September 30, 2009 was primarily due to:

Products Corporation used the approximately $786 million of proceeds from the 2010 Term Loan Facility, which was drawn in full on the March 11, 2010 closing date and issued to lenders at 98.25% of par, plus approximately $31 million of available cash and approximately $20 million then drawn on the 2010 Revolving Credit Facility to refinance in full the $815.0 million of outstanding indebtedness under the 2006 Term Loan Facility and to pay approximately $7 million of accrued interest and approximately $15 million of fees and expenses incurred in connection with consummating the 2010 Refinancing, of which approximately $9 million was capitalized.

Consolidated net sales in the third quarter of 2010 were $319.0 million, a decrease of $7.2 million, or 2.2%, compared to $326.2 million in the third quarter of 2009. Excluding the unfavorable impact of foreign currency fluctuations of $5.8 million, consolidated net sales in the third quarter of 2010 were essentially unchanged from the third quarter of 2009, as lower net sales of Revlon and Almay color cosmetics were largely offset by higher net sales of Revlon ColorSilk hair color and fragrances.

Consolidated net sales in the nine-month period ended September 30, 2010 were $952.2 million, an increase of $0.9 million, or 0.1%, compared to $951.3 million in the nine-month period ended September 30, 2009. Excluding the favorable impact of foreign currency fluctuations of $2.7 million, consolidated net sales in the nine-month period ended September 30, 2010 were essentially unchanged from the nine-month period ended September 30, 2009, as lower net sales of Almay color cosmetics, due to the cycling of the 2009 launch of Almay Pure Blends, and lower net sales of Mitchum anti-perspirant deodorant, were largely offset by higher net sales of Revlon ColorSilk hair color, fragrances and Revlon color cosmetics.

In Latin America, net sales in the nine-month period ended September 30, 2010 increased 3.0% to $78.0 million, compared to $75.7 million in the nine-month period ended September 30, 2009. Excluding the unfavorable impact of foreign currency fluctuations (including the unfavorable impact of the January 2010 devaluation of Venezuelas local currency relative to the U.S. dollar), net sales increased $24.1 million, or 31.8%, in the nine-month period ended September 30, 2010, primarily driven by higher net sales of Revlon ColorSilk hair color, Revlon color cosmetics and other beauty care products. From a country perspective, higher net sales in Venezuela and certain distributor markets contributed approximately 26.0 percentage points to the increase in the regions net sales in the nine-month period ended September 30, 2010, as compared to the nine-month period ended September 30, 2009. Higher selling prices in Venezuela, as a result of market conditions and inflation, accounted for approximately half of the $24.1 million increase in net sales in the region.

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