Fabian Garcia Steps Down as President and CEO
Paul Meister Named Executive Vice Chairman of the Board of Directors
and Will Oversee Day-to-Day Operations of the Company on an Interim Basis
NEW YORK--(BUSINESS WIRE)--
Revlon Consumer Products LLC (NYSE:REV) today announced that Fabian Garcia, President
and Chief Executive Officer of Revlon, has stepped down from his
position to pursue other opportunities. Paul Meister, currently a member
of Revlon's Board of Directors, will become Executive Vice Chairman of
the Board, overseeing day-to-day operations of the company on an interim
basis. Mr. Garcia will stay on through the end of February to assist Mr.
Meister with an orderly transition of his duties.
"It has been a privilege to serve as CEO of this iconic company," said
Fabian Garcia. "I want to thank each and every one of the women and men
of Revlon whose relentless commitment and passion for the beauty
business have made this company the global cosmetics leader it remains
today. I also want to thank MacAndrews & Forbes for their support as we
started to transform the company after the Elizabeth Arden acquisition
all the way through the most recent launch of the new and exciting ‘Live
Boldly' Revlon campaign. I'm confident that Revlon will continue to
succeed as the company executes its long term growth plan, which is
already having an impact on reestablishing its status as a trendsetter
and pioneer in the industry."
"This has been a difficult year for us balancing the successful
integration of Elizabeth Arden with the rise of e-commerce and specialty
beauty stores. We are aggressively catching up to that rapid
transformation and I want to thank Fabian for his leadership through
this challenging and dynamic period," said Ronald O. Perelman, Chairman
of the Revlon Board of Directors. "I look forward to continuing to
realize the benefits of the Elizabeth Arden acquisition and evolving to
grow in this exciting new way of business. The company has gained
momentum and is now poised for future growth."
Added Meister, "I'm thrilled to help lead Revlon during this transition
period and I've been encouraged by the progress Revlon has made with
respect to our extensive transformation initiatives. While we still have
significant work to do, we're putting our iconic brands at the center of
our strategy to better position us in this rapidly evolving marketplace.
I look forward to enhancing our operating structure, driving innovation,
and strengthening the future leadership team."
Paul Meister has served on the Board of Directors at Revlon since 2016.
He is currently President of MacAndrews & Forbes and was co-founder of
Liberty Lane Partners, LLC, a private investment company with
investments in healthcare, technology, and distribution-related
industries. He previously served as Chairman and CEO of inVentiv Health
(now Syneos Health, Inc.) and Chairman of Thermo Fisher Scientific Inc.
Results of Operations
In connection with the Company's management transition, Revlon also
announced preliminary unaudited financial results for its fiscal year
and fourth quarter ended December 31, 2017.
-
The Company currently estimates that net sales were approximately $785
million for the three-month period ended December 31, 2017, compared
to $801 million in the fourth quarter of 2016. Full year 2017 net
sales are estimated to be approximately $2.7 billion, compared to $2.3
billion in 2016.
-
The Company estimates that its reported net loss for the fourth
quarter 2017 was in a range of approximately $60 million to $80
million, compared to $36.5 million in the fourth quarter of 2016. Full
year 2017 net loss is estimated to be in the range of approximately
$165 million to $185 million, compared to $21.9 million in 2016. The
2017 net loss includes the expected impact of a significant non-cash
charge related to the recently enacted Tax Cuts and Jobs Act (Tax
Reform) and an approximate $11 million projected non-cash goodwill
impairment charge, on both a pre-tax and after-tax basis, recognized
in the fourth quarter of 2017 relating to the Company's Global Color
Brands reporting unit.
-
Fourth quarter 2017 Adjusted EBITDA(a) is estimated to be
between approximately $110 and $115 million, compared to $149 million
in the fourth quarter of 2016. Full year 2017 Adjusted EBITDA is
expected to be approximately $260 million, compared to $415 million in
2016.
-
The Company delivered strong results on the Elizabeth Arden
Integration Program, realizing approximately $70 million of synergies
and cost reductions in 2017.
Commenting on the preliminary results, Revlon's Chief Operating Officer,
Operations and Chief Financial Officer, Chris Peterson, said, "With the
momentum that we generated in the fourth quarter of 2017, we are
confident that the combination of our $260 million of 2017 Adjusted
EBITDA, the synergies and cost reductions remaining to be captured
through the Elizabeth Arden Integration, and our ongoing business
initiatives provide Revlon with a stable foundation for its future
success."
Mr. Peterson continued, "Although we still have continuing improvements
to make, we're encouraged by our fourth quarter results, which represent
a sequential improvement from the first nine months of the year. Our
liquidity position has strengthened, and Revlon color cosmetics returned
to growth in North America. The sector is experiencing a profound shift,
but we're gaining momentum on our strategy to respond to the
accelerating pace of innovation and increasing migration to
digitally-focused consumer engagement. We're also pleased with our
continued growth in e-commerce and look forward to expanding our share
of this important category."
Mr. Peterson added, "Contrary to false rumors and pure speculation in
public reports, a material asset transfer is not being considered."
These preliminary unaudited results are derived from preliminary
internal financial reports and are subject to revision based on the
Company's financial closing procedures and controls associated with the
completion of its year-end financial reporting, including all customary
reviews and approvals, and completion by the Company's independent
registered public accounting firm of its audit of such financial
statements for the year ended December 31, 2017. Accordingly, actual
final results for 2017 may differ from these preliminary results,
whether due to adjustments and other developments that may arise between
the issuance of this press release and the issuance of the final audited
results for the fiscal year ended December 31, 2017 or otherwise, and
such differences may be material.
Revlon intends to release actual fourth quarter and full year 2017
earnings results on March 2, 2018.
ABOUT REVLON
Revlon has developed a long-standing reputation as a color authority and
beauty trendsetter in the world of color cosmetics and hair care. Since
its breakthrough launch of the first opaque nail enamel in 1932, Revlon
has provided consumers with high quality product innovation, performance
and sophisticated glamour. In 2016, Revlon acquired the iconic Elizabeth
Arden company and its portfolio of brands, including its leading
designer, heritage and celebrity fragrances. Today, Revlon's diversified
portfolio of brands is sold in approximately 150 countries around the
world in most retail distribution channels, including mass, salon and
prestige and online direct to consumer. Revlon is among the leading
global beauty companies, with some of the world's most iconic and
desired brands and product offerings in color cosmetics, skin care, hair
care, hair color and fragrances under brands such as Revlon, Elizabeth
Arden, Revlon ColorSilk, Revlon Professional, American Crew, Almay,
Cutex, Elizabeth Taylor, Christina Aguilera, Britney Spears, Juicy
Couture, Curve and John Varvatos. Please visit http://www.revlon.com
for the latest news and information about Revlon and its brands.
Footnotes to Press Release
(a) Non-GAAP Financial Measures: The
Adjusted EBITDA figures (the "Non-GAAP Financial Measures") are non-GAAP
financial measures that are reconciled to their most directly comparable
GAAP measures in the accompanying financial table. The Company defines
EBITDA as income from continuing operations before interest, taxes,
depreciation, amortization, gains/ losses on foreign currency
fluctuations, gains/losses on the early extinguishment of debt and
miscellaneous expenses (the foregoing being the "EBITDA Exclusions").
The Company presents Adjusted EBITDA to exclude the impact of non-cash
stock compensation expense, the EBITDA Exclusions and certain other
non-operating items that are not directly attributable to the Company's
underlying operating performance (the "Non-Operating Items").
The Company excludes the EBITDA Exclusions and Non-Operating Items, as
applicable, in calculating Adjusted EBITDA because the Company's
management believes that some of these items may not occur in certain
periods, the amounts recognized can vary significantly from period to
period and/or these items do not facilitate an understanding of the
Company's underlying operating performance.
The Company's management uses the Non-GAAP Measures as operating
performance measures (in conjunction with GAAP financial measures) as an
integral part of its reporting and planning processes and to, among
other things: (i) monitor and evaluate the performance of the Company's
business operations, financial performance and overall liquidity; (ii)
facilitate management's internal comparisons of the Company's historical
operating performance of its business operations; (iii) facilitate
management's external comparisons of the results of its overall business
to the historical operating performance of other companies that may have
different capital structures and debt levels; (iv) review and assess the
operating performance of the Company's management team and, together
with other operational objectives, as a measure in evaluating employee
compensation, including bonuses and other incentive compensation; (v)
analyze and evaluate financial and strategic planning decisions
regarding future operating investments; and (vi) plan for and prepare
future annual operating budgets and determine appropriate levels of
operating investments.
Management believes that the Non-GAAP Measures are useful to investors
to provide them with disclosures of the Company's operating results on
the same basis as that used by management. Management believes that
Adjusted EBITDA provides useful information to investors about the
performance of the Company's overall business because such measure
eliminates the effects of certain charges that are not directly
attributable to the Company's underlying operating performance.
Additionally, management believes that providing Adjusted EBITDA
enhances the comparability for investors in assessing the Company's
financial reporting.
Accordingly, the Company believes that the presentation of the Non-GAAP
Measures, when used in conjunction with GAAP financial measures, are
useful financial analytical measures that are used by management, as
described above, and therefore can assist investors in assessing the
Company's financial condition, operating performance and underlying
strength. The Non-GAAP Measures should not be considered in isolation or
as a substitute for their respective most directly comparable As
Reported financial measure prepared in accordance with GAAP, which for
Adjusted EBITDA is net income/loss. Other companies may define such
non-GAAP measures differently. Also, while Adjusted EBITDA, as used in
this release, is defined differently than Adjusted EBITDA for the
Company's credit agreements and indentures, certain financial covenants
in its borrowing arrangements are tied to similar financial measures.
The Non-GAAP Measures should be read in conjunction with the Company's
financial statements and related footnotes filed with the SEC.
| Revlon Consumer Products LLC AND SUBSIDIARIES |
| ADJUSTED EBITDA RECONCILIATION |
| (dollars in millions) |
| |
|
| | | | | | |
| | | | | | | | |
| | |
| | | | | Three Months Ended | | Twelve Months Ended |
| | | | | December 31, | | December 31, |
| | | | | 2017 | | 2016 | | 2017 | | 2016 |
| | | | | (Unaudited) | | | | | (Unaudited) | | | |
| Reconciliation to net loss: |
|
|
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
|
|
Net loss
| |
|
$
|
(62.3
|
)
| |
to
|
$
|
(77.3
|
)
| |
$
|
(36.5
|
)
|
$
|
(165.2
|
)
| |
to
|
$
|
(185.2
|
)
| |
$
|
(21.9
|
)
|
|
Income (loss) from discontinued operations, net of taxes
| | | | |
|
$
|
0.8
|
| |
| | |
(2.6
|
)
| |
|
$
|
2.1
|
| |
| | |
(4.9
|
)
|
|
Loss from continuing operations, net of taxes
| | | | |
(63.1
|
)
| | | |
(78.1
|
)
| | |
(33.9
|
)
| |
(167.3
|
)
| | | |
(187.3
|
)
| | |
(17.0
|
)
|
| | | | | | | | | | | | | | | | | | | | |
|
|
Interest expense and amortization of debt issuance costs
| | | | | | |
41.8
| | | | | |
38.1
| | | | |
158.9
| | | | | |
112.0
| |
|
Loss on early extinguishment of debt
|
-
| | | | | |
-
| | | | |
-
| | | | | |
16.9
| |
|
Foreign currency (gains) losses, net
| | | | | | |
(1.7
|
)
| | | | |
12.2
| | | | |
(18.5
|
)
| | | | |
18.5
| |
|
Provision for income taxes
| | | |
43.0
| | |
to
| |
63.0
| | | |
9.5
| | |
5.0
| | |
to
| |
25.0
| | | |
25.5
| |
|
Depreciation and amortization
| | | | | |
44.1
| | | | | |
42.2
| | | | |
155.8
| | | | | |
123.2
| |
|
Non-operating items(a) | | | | | |
46.9
| | | | | |
81.4
| | | | |
125.3
| | | | | |
136.8
| |
|
Miscellaneous, net
| | | |
| |
(1.0
|
)
| |
| | |
(0.5
|
)
| |
| |
0.8
|
| |
| | |
(0.6
|
)
|
| | | | | | | | | | | | | | | | | | | | |
|
|
Adjusted EBITDA
| |
|
$
|
110.0
|
| |
to
|
$
|
115.0
|
| |
$
|
149.0
|
| | |
$
|
260.0
|
| | | |
$
|
415.3
|
|
(a) Includes the following items: non-cash stock compensation
expense; restructuring and related charges; acquisition and integration
costs; acquisition inventory adjustments; impairment charges; deferred
consideration for CBB acquisition; and Elizabeth Arden 2016 Business
Transformation program charges.
The provision for income taxes reflected in the table above includes a
significant non-cash charge related to the recently enacted Tax Cuts and
Jobs Act.
Forward Looking Statements
Statements made in this press release, which are not historical facts,
including statements about the Company's plans, strategies, focus,
beliefs and expectations, are forward-looking. Forward-looking
statements speak only as of the date they are made and, except for the
Company's ongoing obligations under the U.S. federal securities laws,
the Company undertakes no obligation to publicly update any
forward-looking statement, whether to reflect actual results of
operations; changes in financial condition; changes in general U.S. or
international economic, industry or cosmetics category conditions;
changes in estimates, expectations or assumptions; or other
circumstances, conditions, developments or events arising after the
issuance of this press release. Such forward-looking statements include,
without limitation, the following: (i) the Company's belief that it is
aggressively catching up to the rapid transformation brought on by the
rise of e-commerce and specialty beauty stores; (ii) the Company's
belief that it is evolving to grow, has gained momentum and is now
poised for future growth; (iii) the Company's belief that while the
Company still has significant work to do, that putting its iconic brands
at the center of its strategy better positions the Company in the
rapidly evolving marketplace; (iv) the Company's plans to enhance its
operating structure and drive innovation; (v) the Company's belief that
it is gaining momentum on its strategy to respond to the accelerating
pace of innovation and increasing migration to digitally-focused
consumer engagement; (vi) the Company's plans to expand its share of the
e-commerce category; (vii) the Company's belief that with the momentum
that it generated in the fourth quarter of 2017, the combination of its
$260 million of 2017 Adjusted EBITDA, the synergies and cost reductions
remaining to be captured through the Elizabeth Arden Integration, and
its ongoing business initiatives provide Revlon with a stable foundation
for its future success; and (viii) the Company's belief that it will
continue to succeed as it executes its long term growth plan, which is
already having an impact on reestablishing its status as a trendsetter
and pioneer in the industry. Actual results may differ materially from
such forward-looking statements for a number of reasons, including those
set forth in our filings with the SEC, including, without limitation,
our 2016 Annual Report on Form 10-K that we filed with the SEC in March
2017 and our Quarterly Reports on Form 10-Q and Current Reports on Form
8-K that we have filed or will file with the SEC during 2017 and 2018
(which may be viewed on the SEC's website at http://www.sec.gov
or on our website at http://www.revloninc.com),
as well as reasons including: (i) difficulties, delays in or less than
expected results from the Company's efforts to enhance and accelerate
its e-commerce and social media penetration, such as: (a) greater than
anticipated levels of consumers choosing to purchase their beauty
products through e-commerce and other social media channels and/or
greater than anticipated declines in the brick-and-mortar retail
channel, or either of those conditions occurring at a rate faster than
anticipated; (b) the Company's inability to address the pace and impact
of this new commercial landscape, such as its inability to enhance its
e-commerce and social media capabilities and/or increase its penetration
of e-commerce and social media channels; (c) the Company's inability to
drive a successful long-term omni-channel strategy and significantly
increase its e-commerce penetration; (d) difficulties, delays and/or the
Company's inability to (in whole or in part): (1) develop and implement
effective content to enhance its online retail position; (2) improve its
consumer engagement across social media platforms; and/or (3) transform
its technology and data to support efficient management of its digital
infrastructure; and/or (e) the Company incurring greater than
anticipated levels of expenses and/or debt to facilitate the foregoing
objectives, which could result in, among other things, less than
anticipated revenues and/or profitability; (ii) unanticipated
circumstances or results affecting the Company's future financial
performance, including decreased consumer spending in response to weak
economic conditions or weakness in the consumption of beauty care
products; adverse changes in foreign currency exchange rates; decreased
sales of the Company's products as a result of increased competitive
activities by the Company's competitors and/or decreased performance by
third party suppliers; changes in consumer preferences, such as reduced
consumer demand for the Company's color cosmetics and other current
products, including new product launches; changes in consumer purchasing
habits, including with respect to retailer preferences and/or sales
channels; higher than expected restructuring costs and/or
acquisition-related integration costs; higher than expected advertising,
promotional and/or marketing expenses or lower than expected results
from the Company's advertising, promotional, pricing and/or marketing
plans; higher than expected sales returns related to any reduction of
space by the Company's customers or store closures, product
discontinuances or otherwise or decreased sales of the Company's
existing or new products; actions by the Company's customers, such as
inventory management and greater than anticipated space reconfigurations
or reductions in display space and/or product discontinuances or a
greater than expected impact from pricing, marketing, advertising and/or
promotional strategies by the Company's customers; changes in the
competitive environment and actions by the Company's competitors,
including, among other things, business combinations, technological
breakthroughs, implementation of new pricing strategies, new product
offerings, increased advertising, promotional and marketing spending and
advertising, promotional and/or marketing successes by competitors;
and/or (iii) difficulties, delays in or less than expected results from
the Company's efforts to grow profitability through intensive
innovation, such as less than effective e-commerce penetration or
product development; the Company's inability to consummate transactions
to expand its geographical presence; less than effective product
development, less than expected acceptance of its new or existing
products; less than expected acceptance of its advertising, promotional,
pricing and/or marketing plans and/or brand communication; less than
expected investment in advertising, promotional and/or marketing
activities or greater than expected competitive investment; less than
expected levels of advertising, promotional and/or marketing activities
for its new product launches; and/or less than expected levels of
execution with its customers or higher than expected costs and expenses.
Factors other than those listed above could also cause the Company's
results to differ materially from expected results. Additionally, the
business and financial materials and any other statement or disclosure
on or made available through the Company's websites or other websites
referenced herein shall not be incorporated by reference into this
release.
View source version on businesswire.com: http://www.businesswire.com/news/home/20180129006177/en/
Media:
Sard Verbinnen & Co
Stephanie Pillersdorf / Emily
Claffey / Julie Rudnick
212-687-8080
Source: Revlon Consumer Products LLC