NEW YORK--(BUSINESS WIRE)--
Revlon Consumer Products LLC (NYSE:REV) today announced its results for the quarter and
year ended December 31, 2017.
Quarter ended December 31, 2017 Highlights1:
-
As Reported net sales were $786.6 million, a decrease of 1.8% compared
to the prior-year period.
-
As Reported operating income of $21.0 million, compared to operating
income of $25.4 million in the prior-year period.
-
As Reported net loss was $76.9 million, compared to As Reported net
loss of $36.5 million in the prior-year period. Adjusted(a)
net loss was $45.2 million, compared to Adjusted net income of $22.5
million in the prior-year period.
-
Adjusted EBITDA(a) was $112.0 million, compared to $149.0
million in the prior-year period, representing a 24.8% decrease.
Fourth Quarter 2017 Results
Total Company Results
In calculating Adjusted results, adjustments were made for the
Non-Operating Items described in footnote (a).
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(USD millions, except per share data)
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Three Months Ended December 31,
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| | | |
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| | |
2017
| | |
2016
| | |
As Reported
| | |
Adjusted
|
| | |
As Reported
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Adjusted
| | |
As Reported
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Adjusted
| | |
% Change
| | |
% Change
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| | | | | | | | | | | | | | | | | |
|
|
Net Sales
| | |
$
|
786.6
| | | |
$
|
786.6
| | | |
$
|
800.7
| | | |
$
|
800.7
| | | |
(1.8
|
)%
| | |
(1.8
|
)%
|
|
Gross Profit
| | |
458.9
| | | |
459.3
| | | |
452.4
| | | |
468.9
| | | |
1.4
|
%
| | |
(2.0
|
)%
|
|
Gross Margin
| | |
58.3
|
%
| | |
58.4
|
%
| | |
56.5
|
%
| | |
58.6
|
%
| | |
180bps
| | |
-20bps
|
|
Operating income
| | |
$
|
21.0
| | | |
$
|
67.0
| | | |
$
|
25.4
| | | |
$
|
105.2
| | | |
(17.3
|
)%
| | |
(36.3
|
)%
|
|
Adjusted EBITDA
| | | | | |
112.0
| | | | | | |
149.0
| | | | | | |
(24.8
|
)%
|
|
Net (loss) income
| | |
(76.9
|
)
| | |
(45.2
|
)
| | |
(36.5
|
)
| | |
22.5
| | | |
(110.7
|
)%
| | |
(300.9
|
)%
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|
Diluted (loss) earnings per common share
|
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$
|
(1.46
|
)
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$
|
(0.86
|
)
|
|
|
$
|
(0.70
|
)
|
|
|
$
|
0.43
|
|
|
|
(108.6
|
)%
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|
|
(300.0
|
)%
|
1 The results discussed below include the following
measures: U.S. GAAP ("As Reported"); non-GAAP("Adjusted"),
which excludes certain Non-Operating Items (as defined in footnote
(a)) from As Reported results; and Non-GAAP pro forma ("Pro Forma
Adjusted"), which presents the Adjusted results on a pro forma
basis as if Revlon and Elizabeth Arden were a combined company for
all of the periods presented ("Pro Forma"). See footnote (a) for
further discussion of the Company's Adjusted and Pro Forma
Adjusted measures. Reconciliations of As Reported results to Pro
Forma, Adjusted and Pro Forma Adjusted results are provided as an
attachment to this release. In addition, where indicated, the
Company analyzes and presents its results excluding the impact of
foreign currency translation ("XFX").
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As Reported net sales were $786.6 million in the fourth quarter of 2017,
a decrease of 1.8% compared to the prior- year period, primarily driven
by net sales declines in North America, partially offset by
international growth within the Elizabeth Arden segment.
As Reported gross margin was 58.3% in the fourth quarter of 2017,
compared to 56.5% in the prior-year period, an increase of 180 basis
points ("bps"). This increase was driven by the impacts of additional
inventory costs in the prior-year period related to the increase in the
fair value of inventory acquired in the Elizabeth Arden acquisition and
the realization of approximately $10 million of insourcing integration
synergies, which were partially offset by higher obsolescence as the
Company executes on aligning its strategic investments, higher returns
and less overhead absorption. On an Adjusted basis, gross margin was
58.4% in the fourth quarter of 2017, compared to 58.6% in the prior-year
period, a decline of 20bps due to the drivers in As Reported gross
margin discussed above, excluding the impact of the additional inventory
costs in the prior period related to the fair value of inventory
acquired in the Elizabeth Arden acquisition.
As Reported operating income was $21.0 million in the fourth quarter of
2017, compared to operating income of $25.4 million in the prior-year
period, driven by higher SG&A and acquisition and integration costs,
partially offset by the results of the drivers of the increase discussed
in As Reported gross margin above and lower restructuring charges. As
Reported operating income for the fourth quarter of 2017 includes a
$10.8 million non-cash goodwill impairment charge within the Company's
Global Color Brands reporting unit. On an Adjusted basis, operating
income was $67.0 million in the fourth quarter of 2017, compared to
Adjusted operating income of $105.2 million in the prior-year period, as
a result of the drivers of the decline in Adjusted gross margin
discussed above and higher SG&A costs, offset by the realization of a
total of $28 million of pro forma synergies and cost reductions.
As Reported net loss was $76.9 million in the fourth quarter of 2017,
compared to a net loss of $36.5 million in the prior-year period. This
decline was primarily the result of the drivers discussed in As Reported
operating income above and a higher provision for income taxes, which
includes non-cash expense of $47.9 million associated with the reduction
in the Company's deferred tax assets as a result of the reduction in the
U.S. federal corporate tax rate following the enactment of the Tax Cuts
and Jobs Act in the U.S. These drivers were partially offset by the
favorable impacts of foreign currency fluctuations. Adjusted net loss,
which excludes certain Non-Operating Items described in footnote (a),
was $45.2 million in the fourth quarter of 2017, compared to Adjusted
net income of $22.5 million in the prior-year period, a $67.7 million
decrease, primarily driven by net sales declines, higher SG&A costs and
a higher provision for income taxes, partially offset by the effects of
foreign currency fluctuations as compared to the prior-year period.
Elizabeth Arden Integration Program
The Company continued to accelerate the realization of synergies and
cost reductions on the restructuring and integration of Elizabeth Arden,
delivering $69 million of synergies and cost reductions for the year
ended December 31, 2017, as compared to an expected delivery of $55
million to $60 million for the year. Of the $69 million of synergies and
cost reductions for the year ended December 31, 2017, approximately $23
million were realized within costs of sales and $46 million were
realized within SG&A costs.
During the fourth quarter of 2017, the Company incurred approximately
$22 million in restructuring and related charges in connection with
implementing actions under the Elizabeth Arden Integration Program, as
the Company continues to execute on the process to consolidate and
streamline the combined organization. Through December 31, 2017, the
Company has realized approximately $72 million in restructuring and
related charges.
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Segment Results |
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(USD millions)
| | | |
Three Months Ended December 31,
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| | | |
Net Sales
|
| | | |
As Reported
|
|
|
As Reported
|
| | | |
2017
|
|
|
2016
| | |
% Change
|
|
|
XFX
% Change
|
| | | | | | | | | | | | |
|
|
Consumer
| | | |
$
|
355.7
| | | |
$
|
367.5
| | | |
(3.2
|
)%
| | |
(4.0
|
)%
|
|
Elizabeth Arden
| | | |
313.2
| | | |
306.2
| | | |
2.3
|
%
| | |
1.6
|
%
|
|
Professional
| | | |
111.8
| | | |
119.3
| | | |
(6.3
|
)%
| | |
(10.4
|
)%
|
|
Other
| | | |
5.9
|
| | |
7.7
|
| | |
(23.4
|
)%
| | |
(28.6
|
)%
|
|
Total
| | | |
$
|
786.6
| | | |
$
|
800.7
| | | |
(1.8
|
)%
| | |
(3.0
|
)%
|
| | | | | | | | | | | | |
|
| | | |
Three Months Ended December 31,
|
| | | |
Segment Profit (b)
|
| | | |
As Reported
| | |
As Reported
|
| | | |
2017
| | |
2016
| | |
% Change
| | |
XFX
% Change
|
| | | | | | | | | | | | |
|
|
Consumer
| | | |
$
|
105.1
| | | |
$
|
128.8
| | | |
(18.4
|
)%
| | |
(18.2
|
)%
|
|
Elizabeth Arden
| | | |
48.7
| | | |
35.7
| | | |
36.4
|
%
| | |
35.0
|
%
|
|
Professional
| | | |
10.4
| | | |
26.0
| | | |
(60.0
|
)%
| | |
(62.3
|
)%
|
|
Other
| | | |
(1.2
|
)
| | |
(1.8
|
)
| | |
33.3
|
%
| | |
44.4
|
%
|
|
Total
|
|
|
|
$
|
163.0
|
|
|
|
$
|
188.7
|
|
|
|
(13.6
|
)%
|
|
|
(13.9
|
)%
|
| | | | | | | | | | | | | | | | | | |
|
Consumer Segment
Consumer segment net sales in the fourth quarter of 2017 were $355.7
million, a decrease of 3.2%, or 4.0% XFX, compared to the prior-year
period, primarily driven by net sales declines in Almay color cosmetics
as a result of higher returns, partially offset by growth in net sales
of Revlon color cosmetics.
Consumer segment profit decreased by 18.4%, or 18.2% XFX, in the fourth
quarter of 2017 compared to the prior-year period, primarily due to
lower gross profit as a result of the decline in net sales and higher
sales returns, as well as higher brand support expenses.
Elizabeth Arden Segment
Elizabeth Arden net sales in the fourth quarter of 2017 were $313.2
million, an increase of 2.3%, or 1.6% XFX, compared to the prior-year
period, primarily driven by higher net sales of Elizabeth Arden branded
skin care and fragrances internationally, offset by lower net sales of
designer and celebrity fragrances, primarily within the U.S. mass retail
channel.
Elizabeth Arden segment profit in the fourth quarter of 2017 was $48.7
million compared to $35.7 million in the prior-year period. The increase
of 36.4% was primarily driven by higher net sales in addition to lower
cost of sales and SG&A expenses due to the realization of synergies and
cost reductions in 2017, partially offset by higher brand support
expenses.
Professional Segment
Professional segment net sales in the fourth quarter of 2017 of $111.8
million decreased by 6.3%, or 10.4% XFX, compared to the prior-year
period, driven by continued lower net sales of American Crew men's
grooming products, as efforts to balance trade inventory stabilize,
which were partially offset by higher net sales of Creme of Nature
multi-cultural hair products.
Professional segment profit decreased by 60.0%, or 62.3% XFX, in the
fourth quarter of 2017 compared to the prior-year period, primarily
resulting from lower gross profit driven by the declines in net sales
and higher obsolescence, as well as higher brand support expenses.
Geographic Net Sales
Overall, net sales decreased on an As Reported basis by 1.8%, driven by
overall lower net sales in North America, partially offset by
international growth in the Elizabeth Arden and Professional segments.
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(USD millions)
|
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|
|
Three Months Ended December 31,
|
| | | |
2017
As Reported
|
|
|
2016
As Reported
|
|
|
As Reported
% Change
|
|
|
As Reported XFX
% Change
|
|
Net Sales:
| | | | | | | | | | | | | | | |
|
Consumer
| | | | | | | | | | | | | | | |
| North America | | | |
$
|
216.0
| | | |
$
|
225.7
| | | |
(4.3
|
)%
| | |
(4.6
|
)%
|
|
International
| | | |
139.7
| | | |
141.8
| | | |
(1.5
|
)%
| | |
(3.0
|
)%
|
|
Professional
| | | | | | | | | | | | | | | |
| North America | | | |
$
|
44.1
| | | |
$
|
56.9
| | | |
(22.5
|
)%
| | |
(23.4
|
)%
|
|
International
| | | |
67.7
| | | |
62.4
| | | |
8.5
|
%
| | |
1.4
|
%
|
|
Elizabeth Arden
| | | | | | | | | | | | | | | |
| North America | | | |
$
|
169.6
| | | |
$
|
187.2
| | | |
(9.4
|
)%
| | |
(9.7
|
)%
|
|
International
| | | |
143.6
| | | |
119.0
| | | |
20.7
|
%
| | |
19.5
|
%
|
|
Other
| | | | | | | | | | | | | | | |
| North America | | | |
$
|
—
| | | |
$
|
—
| | | |
N.M.
| | | |
N.M.
| |
|
International
| | | |
5.9
|
| | |
7.7
|
| | |
(23.4
|
)%
|
| |
(28.6
|
)%
|
|
Total Net Sales
| | | |
$
|
786.6
| | | |
$
|
800.7
| | | |
(1.8
|
)%
| | |
(3.0
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| | | | | | | | | | | | | | |
|
| Total Net Sales Summary |
|
|
|
|
|
|
|
|
|
|
|
| North America | | | |
$
|
429.7
| | | |
$
|
469.8
| | | |
(8.5
|
)%
| | |
(8.9
|
)%
|
|
International
|
|
|
|
356.9
|
|
|
|
330.9
|
|
|
|
7.9
|
%
|
|
|
5.3
|
%
|
| | | | | | | | | | | | | | | | |
|
Consumer Segment
In North America, Consumer segment net sales in the fourth quarter of
2017 of $216.0 million decreased by 4.3%, or 4.6% XFX, compared to the
prior-year period, primarily as a result of higher sales returns for the
Almay brand as well as continuing declines across several beauty
categories within the U.S. mass retail channel, partially offset by
higher net sales of Revlon color cosmetics.
In International, Consumer segment net sales in the fourth quarter of
2017 of $139.7 million decreased by 1.5%, or 3.0% XFX, compared to the
prior-year period, which decrease was partially offset by higher net
sales of Revlon color cosmetics in the Asia-Pacific region.
Elizabeth Arden Segment
In North America, Elizabeth Arden segment net sales were $169.6 million
in the fourth quarter of 2017, which was a decrease of 9.4%, or 9.7%
XFX, compared to the prior-year period, primarily due to decreases in
net sales of celebrity and heritage fragrances in the U.S. mass retail
channel.
In International, Elizabeth Arden segment net sales in the fourth
quarter of 2017 of $143.6 million increased by 20.7%, or 19.5% XFX,
compared to the prior-year period, primarily driven by higher net sales
of Elizabeth Arden branded products in China and Travel Retail channels
and higher net sales of heritage fragrances in Germany, South Africa and
Australia.
Professional Segment
In North America, Professional segment net sales in the fourth quarter
of 2017 of $44.1 million decreased by 22.5%, or 23.4% XFX, compared to
the prior-year period, primarily driven by lower net sales of American
Crew men's grooming products, partially offset by higher net sales of
Creme of Nature multi-cultural hair products.
In International, Professional segment net sales in the fourth quarter
of 2017 of $67.7 million increased by 8.5%, or 1.4% XFX, compared to the
prior-year period, which was essentially flat.
Cash Flow for the Full Year Period
Net cash used in operating activities in 2017 was $139.3 million,
compared to net cash provided by operating activities of $120.1 million
in 2016. Free cash flow used in 2017 was $247.6 million, compared to
$60.8 million provided in 2016. These decreases are primarily driven by
higher inventory; higher payments for interest, restructuring,
acquisition and integration costs related to the EA Integration Program
and permanent displays; as well as higher capital expenditures.
Partially offsetting this were favorable changes in accounts payable and
lower payments for income taxes and incentive compensation.
Liquidity
As of December 31, 2017, the Company had drawn $157 million on its
Revolving Credit Facility and had $280.1 million of liquidity,
consisting of $87.1 million of unrestricted cash and cash equivalents,
as well as $193 million in available borrowing capacity under the
Revolving Credit Facility. The Company has continued to repatriate cash
to the U.S. using tax-effective methods as part of continuing to
effectively manage its working capital needs.
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| |
|
| | |
|
| | |
|
| | |
Full Year 2017 Results |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(USD millions, except per share data)
| | | |
Year Ended December 31,
| | |
|
| | |
|
|
|
|
|
|
| | | |
2017
|
|
|
2016
| | |
As Reported
| | |
Adjusted
|
| | | |
As
Reported
|
|
|
Adjusted
| | |
As
Reported
|
|
|
Adjusted
|
|
|
Pro Forma
Adjusted
| | |
% Change
| | |
% Change
| | |
Pro Forma %
Change
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
|
Net Sales
| | | |
$
|
2,693.7
| | | |
$
|
2,693.7
| | | |
$
|
2,334.0
| | | |
$
|
2,334.0
| | | |
$
|
2,858.9
| | | |
15.4
|
%
| | |
15.4
|
%
| | |
(5.8
|
)%
|
|
Gross Profit
| | | |
1,542.4
| | | |
1,560.8
| | | |
1,416.9
| | | |
1,437.9
| | | |
1,709.7
| | | |
8.9
|
%
| | |
8.5
|
%
| | |
(8.7
|
)%
|
|
Gross Margin
| | | |
57.3
|
%
| | |
57.9
|
%
| | |
60.7
|
%
| | |
61.6
|
%
| | |
59.8
|
%
| | |
-340bps
| | | |
-370bps
| | | |
-190bps
| |
|
Operating (loss) income
| | | |
$
|
(22.3
|
)
| | |
$
|
96.2
| | | |
$
|
155.3
| | | |
$
|
285.7
| | | |
$
|
239.5
| | | |
(114.4
|
)%
| | |
(66.3
|
)%
| | |
(59.8
|
)%
|
|
Adjusted EBITDA
| | | | | | |
258.8
| | | | | | |
415.3
| | | |
405.3
| | | | | | | |
(37.7
|
)%
| | |
(36.1
|
)%
|
|
Net (loss) income
| | | |
(183.2
|
)
| | |
(101.4
|
)
| | |
(21.9
|
)
| | |
81.3
| | | | | | |
(736.5
|
)%
| | |
(224.7
|
)%
| | | | |
|
Diluted (loss) earnings per common share
|
|
|
|
$
|
(3.48
|
)
|
|
|
$
|
(1.93
|
)
|
|
|
$
|
(0.42
|
)
|
|
|
$
|
1.55
|
|
|
|
|
|
|
(728.6
|
)%
|
|
|
(224.5
|
)%
|
|
|
|
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
As Reported net sales were $2,693.7 million in 2017, an increase of
15.4% compared to 2016, primarily driven by the inclusion of Elizabeth
Arden segment net sales for the full year ended December 31, 2017. On a
Pro Forma basis, net sales decreased by 5.8%, or 6.1% XFX, primarily
driven by declines in the U.S. mass retail channel.
As Reported gross margin was 57.3% in 2017, compared to 60.7% in 2016, a
decrease of 340bps. This decrease was primarily driven by the addition
of the lower gross margin Elizabeth Arden business acquired in September
2016. On a Pro Forma Adjusted basis, gross margin was 57.9% in 2017,
compared to 59.8% in the prior-year period, a decline of 190bps due to
higher sales incentives and returns, as well as higher obsolescence,
partially offset by the realization of approximately $23 million of pro
forma synergies within the Elizabeth Arden segment.
As Reported operating loss was $22.3 million in 2017, compared to
operating income of $155.3 million in 2016, driven by higher SG&A costs,
in addition to higher acquisition and integration costs, partially
offset by higher gross profit due to the inclusion of net sales in the
Elizabeth Arden segment for the year ended December 31, 2017. On a Pro
Forma Adjusted basis, operating income was $96.2 million, compared to
Pro Forma Adjusted operating income of $239.5 million in 2016, a result
of the drivers of the decline in Pro Forma Adjusted gross margin
discussed above and higher SG&A costs, offset by the realization of
approximately $69 million of pro forma synergies and cost reductions
during 2017.
As Reported net loss was $183.2 million in 2017, compared to a net loss
of $21.9 million in 2016. This decline was primarily the result of the
drivers discussed in As Reported operating loss above and higher
interest expense, partially offset by the favorable impacts of foreign
currency fluctuations. Adjusted net loss, which excludes certain
Non-Operating Items described in footnote (a), was $101.4 million in
2017, compared to Adjusted net income of $81.3 million in 2016, a $182.7
million decrease, driven by higher SG&A costs and higher interest
expense, partially offset by higher gross profit due to the inclusion of
the Elizabeth Arden segment for the full year ended December 31, 2017.
2017 Results Conference Call
The Company will host a conference call with members of the investment
community today, March 15, 2018, at 5:30 P.M. NYC time to discuss 2017
results. Access to the call is available to the public at www.revloninc.com.
Footnotes to Press Release
(a) Non-GAAP Financial Measures:
Pro Forma Net Sales; EBITDA; Adjusted and Pro Forma Adjusted EBITDA;
Adjusted and Pro Forma Adjusted net (loss) income from continuing
operations, before income taxes; Adjusted net (loss) income; Adjusted
diluted (loss) earnings per common share; Pro Forma Adjusted operating
income; Pro Form Adjusted gross margin; and free cash flow (together,
the "Non-GAAP Measures") are non-GAAP financial measures that are
reconciled to their most directly comparable GAAP measures in the
accompanying financial tables. Pro Forma financial information assumes
the Elizabeth Arden acquisition was completed on January 1, 2016 and its
financial results were included for all periods presented.
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 following table identifies the Non-Operating Items excluded
in the presentation of Adjusted EBITDA and Pro Forma Adjusted EBITDA for
all periods:
|
|
|
|
|
|
|
|
|
(USD millions)
|
|
| Q4 2017 |
|
| Q4 2016 |
|
Income / (Loss) Adjustments to EBITDA
|
|
|
|
|
|
Non-Operating Items:
| | | | | | |
|
Non-cash stock compensation expense
| | |
$
|
0.9
| | | |
$
|
1.6
|
|
Restructuring and related charges
| | |
22.2
| | | |
34.5
|
|
Acquisition and integration costs
| | |
12.7
| | | |
3.7
|
|
Elizabeth Arden 2016 Business Transformation Program
| | |
0.3
| | | |
0.9
|
|
Impairment charge
| | |
10.8
| | | |
23.4
|
|
Inventory purchase accounting adjustments, cost of sales
| | |
—
| | | |
16.4
|
|
Deferred consideration for CBB Acquisition
|
|
|
—
|
|
|
|
0.9
|
| | | | | | |
|
|
|
|
|
|
|
|
|
|
|
|
|
(USD millions)
|
|
| YTD 2017 |
|
| YTD 2016 |
|
| YTD 2016
Pro Forma
Adjusted |
|
Income / (Loss) Adjustments to EBITDA
|
|
|
|
|
|
|
|
Non-Operating Items:
| | | | | | | | | |
|
Non-cash stock compensation expense
| | |
$
|
6.8
| | | |
$
|
6.4
| | | |
$
|
10.4
|
|
Restructuring and related charges
| | |
34.5
| | | |
36.8
| | | |
45.1
|
|
Acquisition and integration costs
| | |
52.9
| | | |
43.2
| | | |
2.8
|
|
Elizabeth Arden 2016 Business Transformation Program
| | |
1.1
| | | |
2.6
| | | |
2.6
|
|
Impairment charge
| | |
10.8
| | | |
23.4
| | | |
23.4
|
|
Inventory purchase accounting adjustments, cost of sales
| | |
17.2
| | | |
20.9
| | | |
20.9
|
|
Deferred consideration for CBB Acquisition
|
|
|
2.0
|
|
|
|
3.5
|
|
|
|
3.5
|
| | | | | | | | | | |
|
Adjusted net (loss) income and adjusted diluted (loss) earnings per
common share exclude the after-tax impact of the Non-Operating Items
from As Reported Net Income (loss).
The Company excludes the EBITDA Exclusions and Non-Operating Items, as
applicable, in calculating the Non-GAAP Measures 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.
Free cash flow is defined as net cash provided by operating activities,
less capital expenditures for property, plant and equipment. Free cash
flow excludes proceeds on sale of discontinued operations. Free cash
flow does not represent the residual cash flow available for
discretionary expenditures, as it excludes certain expenditures such as
mandatory debt service requirements, which for the Company are
significant.
The Company's management uses the Non-GAAP Measures as operating
performance measures, and in the case of free cash flow, as a liquidity
measure (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 the
Non-GAAP Measures provide useful information to investors about the
performance of the Company's overall business because such measures
eliminate the effects of certain charges that are not directly
attributable to the Company's underlying operating performance.
Additionally, management believes that providing the Non-GAAP Measures
enhances the comparability for investors in assessing the Company's
financial reporting. Management believes that free cash flow is useful
for investors because it provides them with an important perspective on
the cash available for debt service and other strategic measures, after
making necessary capital investments in property and equipment to
support the Company's ongoing business operations, and provides them
with the same measures that management uses as the basis for making
resource allocation decisions.
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 measures prepared in accordance with GAAP, such as
net income/loss, operating income, diluted earnings per share or net
cash provided by (used in) operating activities. Other companies may
define such non-GAAP measures differently. Also, while EBITDA and
Adjusted EBITDA, as used in this release, are 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. These non-GAAP financial measures should be
read in conjunction with the Company's financial statements and related
footnotes filed with the SEC.
| (b) Segment profit is defined as income from continuing
operations for each of the Company's Consumer, Elizabeth Arden,
Professional, and Other segments, excluding the EBITDA Exclusions.
Segment profit also excludes unallocated corporate expenses and the
impact of certain items that are not directly attributable to the
segments' underlying operating performance, including the impact of
the Non-Operating Items noted above in footnote (a). Unallocated
corporate expenses primarily relate to general and administrative
expenses related to the corporate administrative organization. These
expenses are recorded in unallocated corporate expenses as these
items are centrally directed and controlled. The Company does not
have any material inter-segment sales.
|
Forward-Looking Statements
Statements made in this press release, which are not historical facts,
are forward-looking and are provided pursuant to the safe harbor
provisions of the Private Securities Litigation Reform Act of 1995.
Forward-looking statements speak only as of the date they are made and
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 or industry conditions and/or conditions in the
Company's reportable segments; changes in estimates, expectations or
assumptions; or other circumstances, conditions, developments and/or
events arising after the issuance of this press release, except for the
Company's ongoing obligations under the U.S. federal securities laws.
Forward-looking statements are subject to known and unknown risks and
uncertainties and are based on preliminary or potentially inaccurate
estimates and assumptions, including the estimates and assumptions used
by the Company in preparing the pro forma financial information
referenced in this press release, that could cause actual results to
differ materially from those expected or implied by the pro forma
financial information or the estimates and assumptions used in preparing
the pro forma financial information. Actual results may differ
materially from the Company's forward-looking statements for a number of
reasons, including as a result of the risks and other items described in
Revlon's filings with the SEC, including, without limitation, in
Revlon's Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and
Current Reports on Form 8-K and any amendments thereto filed with the
SEC during 2017 and 2018 (which may be viewed on the SEC's website at http://www.sec.gov
or on Revlon Consumer Products LLC's website at http://www.revloninc.com).
The business and financial materials and any other statement or
disclosure on, or made available through, Revlon's website or other
websites referenced herein shall not be incorporated by reference into
this press release.
|
|
| Revlon Consumer Products LLC AND SUBSIDIARIES |
| CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS |
| (dollars in millions, except share and per share amounts) |
|
|
| |
|
| |
|
| |
|
| |
| | | Three Months Ended December 31, | | | Year Ended December 31, |
| | | 2017 | | | 2016 | | | 2017 | | | 2016 |
| | | (Unaudited) | | | |
| | | | | | | | | | | |
|
|
Net sales
| | |
$
|
786.6
| | | |
$
|
800.7
| | | |
$
|
2,693.7
| | | |
$
|
2,334.0
| |
|
Cost of sales
| | |
327.7
|
| | |
348.3
|
| | |
1,151.3
|
| | |
917.1
|
|
|
Gross profit
| | |
458.9
| | | |
452.4
| | | |
1,542.4
| | | |
1,416.9
| |
|
Selling, general and administrative expenses
| | |
392.3
| | | |
368.2
| | | |
1,467.6
| | | |
1,161.0
| |
|
Acquisition and integration costs
| | |
12.7
| | | |
3.7
| | | |
52.9
| | | |
43.2
| |
|
Restructuring charges and other, net
| | |
22.1
| | | |
31.7
| | | |
33.4
| | | |
34.0
| |
|
Impairment charge
| | |
10.8
|
| | |
23.4
|
| | |
10.8
|
| | |
23.4
|
|
|
Operating income (loss)
| | |
21.0
|
| | |
25.4
|
| | |
(22.3
|
)
| | |
155.3
|
|
| | | | | | | | | | | |
|
|
Other expenses:
| | | | | | | | | | | | |
|
Interest expense
| | |
39.5
| | | |
35.9
| | | |
149.8
| | | |
105.2
| |
|
Amortization of debt issuance costs
| | |
2.3
| | | |
2.2
| | | |
9.1
| | | |
6.8
| |
|
Loss on early extinguishment of debt, net
| | |
—
| | | |
—
| | | |
—
| | | |
16.9
| |
|
Foreign currency (gains) losses, net
| | |
(1.7
|
)
| | |
12.2
| | | |
(18.5
|
)
| | |
18.5
| |
|
Miscellaneous, net
| | |
(1.0
|
)
| | |
(0.5
|
)
| | |
0.8
|
| | |
(0.6
|
)
|
|
Other expenses
| | |
39.1
|
| | |
49.8
|
| | |
141.2
|
| | |
146.8
|
|
| | | | | | | | | | | |
|
|
(Loss) income from continuing operations before income taxes
| | |
(18.1
|
)
| | |
(24.4
|
)
| | |
(163.5
|
)
| | |
8.5
| |
|
Provision for income taxes
| | |
59.6
|
| | |
9.5
|
| | |
21.8
|
| | |
25.5
|
|
|
Loss from continuing operations, net of taxes
| | |
(77.7
|
)
| | |
(33.9
|
)
| | |
(185.3
|
)
| | |
(17.0
|
)
|
|
Income (loss) from discontinued operations, net of taxes
| | |
0.8
|
| | |
(2.6
|
)
| | |
2.1
|
| | |
(4.9
|
)
|
|
Net loss
| | |
$
|
(76.9
|
)
| | |
$
|
(36.5
|
)
| | |
$
|
(183.2
|
)
| | |
$
|
(21.9
|
)
|
| | | | | | | | | | | |
|
|
Other comprehensive income (loss):
| | | | | | | | | | | | |
|
Foreign currency translation adjustments, net of tax
| | |
3.7
| | | |
(8.5
|
)
| | |
9.0
| | | |
(0.5
|
)
|
|
Amortization of pension related costs, net of tax
| | |
2.0
| | | |
2.0
| | | |
8.1
| | | |
7.6
| |
|
Pension re-measurement, net of tax
| | |
1.8
| | | |
(14.3
|
)
| | |
1.8
| | | |
(14.3
|
)
|
|
Pension curtailment, net of tax
| | |
(0.5
|
)
| | |
—
| | | |
2.1
| | | |
—
| |
|
Reclassification into earnings of accumulated losses from the
de-designated 2013 Interest Rate Swap, net of tax
| | |
0.5
| | | |
—
| | | |
2.3
| | | |
—
| |
|
Revaluation of derivative financial instruments, net of
reclassifications into earnings, net of tax
| | |
—
|
| | |
0.7
|
| | |
—
|
| | |
0.8
|
|
|
Other comprehensive income (loss)
| | |
7.5
|
| | |
(20.1
|
)
| | |
23.3
|
| | |
(6.4
|
)
|
|
Total comprehensive loss
| | |
$
|
(69.4
|
)
| | |
$
|
(56.6
|
)
| | |
$
|
(159.9
|
)
| | |
$
|
(28.3
|
)
|
| | | | | | | | | | | |
|
|
Basic (loss) earnings per common share:
| | | | | | | | | | | | |
|
Continuing operations
| | |
$
|
(1.48
|
)
| | |
$
|
(0.65
|
)
| | |
$
|
(3.52
|
)
| | |
$
|
(0.33
|
)
|
|
Discontinued operations
| | |
0.02
|
| | |
(0.05
|
)
| | |
0.04
|
| | |
(0.09
|
)
|
|
Net loss
| | |
$
|
(1.46
|
)
| | |
$
|
(0.70
|
)
| | |
$
|
(3.48
|
)
| | |
$
|
(0.42
|
)
|
| | | | | | | | | | | |
|
|
Diluted (loss) earnings per common share:
| | | | | | | | | | | | |
|
Continuing operations
| | |
$
|
(1.48
|
)
| | |
$
|
(0.65
|
)
| | |
$
|
(3.52
|
)
| | |
$
|
(0.33
|
)
|
|
Discontinued operations
| | |
0.02
|
| | |
(0.05
|
)
| | |
0.04
|
| | |
(0.09
|
)
|
|
Net loss
| | |
$
|
(1.46
|
)
| | |
$
|
(0.70
|
)
| | |
$
|
(3.48
|
)
| | |
$
|
(0.42
|
)
|
| | | | | | | | | | | |
|
|
Weighted average number of common shares outstanding:
| | | | | | | | | | | | |
|
Basic
| | |
52,635,051
|
| | |
52,513,481
|
| | |
52,597,582
|
| | |
52,504,196
|
|
|
Diluted
| | |
52,635,051
|
| | |
52,513,481
|
| | |
52,597,582
|
| | |
52,504,196
|
|
| | | | | | | | | | | | | | | |
|
|
|
| Revlon Consumer Products LLC AND SUBSIDIARIES |
| CONSOLIDATED CONDENSED BALANCE SHEETS |
| (dollars in millions) |
|
|
| |
|
| |
| | | December 31, | | | December 31, |
| | | 2017 | | | 2016 |
| | | | | |
|
| ASSETS | | | | | | |
|
Current assets:
| | | | | | |
|
Cash and cash equivalents
| | |
$
|
87.1
| | | |
$
|
186.4
| |
|
Trade receivables, net
| | |
444.8
| | | |
423.9
| |
|
Inventories
| | |
497.9
| | | |
424.6
| |
|
Prepaid expenses and other
| | |
113.4
|
| | |
88.8
|
|
|
Total current assets
| | |
1,143.2
| | | |
1,123.7
| |
|
Property, plant and equipment, net
| | |
372.7
| | | |
320.5
| |
|
Deferred income taxes
| | |
138.0
| | | |
149.7
| |
|
Goodwill
| | |
692.5
| | | |
689.5
| |
|
Intangible assets, net
| | |
592.1
| | | |
636.6
| |
|
Other assets
| | |
118.4
|
| | |
103.5
|
|
|
Total assets
| | |
$
|
3,056.9
|
| | |
$
|
3,023.5
|
|
| | | | | |
|
| LIABILITIES AND STOCKHOLDERS' DEFICIENCY | | | | | | |
|
Current liabilities:
| | | | | | |
|
Short-term borrowings
| | |
$
|
12.4
| | | |
$
|
10.8
| |
|
Current portion of long-term debt
| | |
170.2
| | | |
18.1
| |
|
Accounts payable
| | |
336.9
| | | |
296.9
| |
|
Accrued expenses and other
| | |
412.8
|
| | |
382.9
|
|
|
Total current liabilities
| | |
932.3
| | | |
708.7
| |
|
Long-term debt
| | |
2,653.7
| | | |
2,663.1
| |
|
Long-term pension and other post-retirement plan liabilities
| | |
172.8
| | | |
184.1
| |
|
Other long-term liabilities
| | |
68.5
| | | |
82.4
| |
|
Total stockholders' deficiency
| | |
(770.4
|
)
| | |
(614.8
|
)
|
|
Total liabilities and stockholders' deficiency
| | |
$
|
3,056.9
|
| | |
$
|
3,023.5
|
|
| | | | | | | | | |
|
|
|
| Revlon Consumer Products LLC AND SUBSIDIARIES |
| CONSOLIDATED STATEMENTS OF CASH FLOWS |
| (dollars in millions) |
|
|
| Year Ended December 31, |
| | | 2017 |
|
| 2016 |
| CASH FLOWS FROM OPERATING ACTIVITIES: | | | | | | |
|
Net loss
| | |
$
|
(183.2
|
)
| | |
$
|
(21.9
|
)
|
|
Adjustments to reconcile net loss to net cash (used in) provided by
operating activities:
| | | | | | |
|
Depreciation and amortization
| | |
155.8
| | | |
123.2
| |
|
Foreign currency (gains) losses from re-measurement
| | |
(22.5
|
)
| | |
20.6
| |
|
Amortization of debt discount
| | |
1.2
| | | |
1.4
| |
|
Stock-based compensation amortization
| | |
6.8
| | | |
6.4
| |
|
Impairment charge
| | |
10.8
| | | |
23.4
| |
|
Provision for (benefit from) deferred income taxes
| | |
22.6
| | | |
(6.2
|
)
|
|
Loss on early extinguishment of debt, net
| | |
—
| | | |
16.9
| |
|
Amortization of debt issuance costs
| | |
9.1
| | | |
6.8
| |
|
Loss on sale of certain assets
| | |
1.6
| | | |
0.4
| |
|
Pension and other post-retirement cost (income)
| | |
1.5
| | | |
(0.6
|
)
|
|
Change in assets and liabilities, net of acquisitions:
| | | | | | |
|
Increase in trade receivables
| | |
(9.9
|
)
| | |
(59.5
|
)
|
|
(Increase) decrease in inventories
| | |
(63.0
|
)
| | |
74.5
| |
|
Increase in prepaid expenses and other current assets
| | |
(21.2
|
)
| | |
(8.2
|
)
|
|
Increase (decrease) in accounts payable
| | |
26.8
| | | |
(12.6
|
)
|
|
Increase in accrued expenses and other current liabilities
| | |
12.3
| | | |
11.7
| |
|
Pension and other post-retirement plan contributions
| | |
(8.5
|
)
| | |
(8.3
|
)
|
|
Purchases of permanent displays
| | |
(65.5
|
)
| | |
(52.1
|
)
|
|
Other, net
| | |
(14.0
|
)
| | |
4.2
|
|
|
Net cash (used in) provided by operating activities
| | |
(139.3
|
)
| | |
120.1
|
|
| | | | | |
|
| CASH FLOWS FROM INVESTING ACTIVITIES: | | | | | | |
|
Capital expenditures
| | |
(108.3
|
)
| | |
(59.3
|
)
|
|
Business acquisitions, net of cash acquired
| | |
—
| | | |
(1,028.7
|
)
|
|
Proceeds from the sale of certain assets
| | |
—
|
| | |
0.5
|
|
|
Net cash used in investing activities
| | |
(108.3
|
)
| | |
(1,087.5
|
)
|
| | | | | |
|
| CASH FLOWS FROM FINANCING ACTIVITIES: | | | | | | |
|
Net increase in short-term borrowings and overdraft
| | |
3.3
| | | |
—
| |
|
Net borrowings under the 2016 Revolving Credit Facility
| | |
157.0
| | | |
—
| |
|
Repayments under the 2016 Term Loan Facility
| | |
(18.0
|
)
| | |
(4.5
|
)
|
|
Prepayments under the Old Acquisition Term Loan
| | |
—
| | | |
(15.1
|
)
|
|
Prepayments under the 2011 Term Loan
| | |
—
| | | |
(11.5
|
)
|
|
Repayment of Old Acquisition Term Loan
| | |
—
| | | |
(658.6
|
)
|
|
Repayment of 2011 Term Loan.
| | |
—
| | | |
(651.4
|
)
|
|
Borrowings under the 2016 Term Loan Facility
| | |
—
| | | |
1,791.0
| |
|
Proceeds from the issuance of 6.25% Senior Notes
| | |
—
| | | |
450.0
| |
|
Payment of financing costs
| | |
(1.2
|
)
| | |
(61.6
|
)
|
|
Tax withholdings related to net share settlements of restricted
stock units and awards
| | |
(2.5
|
)
| | |
(3.2
|
)
|
|
Treasury stock purchased
| | |
—
| | | |
(2.7
|
)
|
|
Other financing activities
| | |
(1.7
|
)
| | |
(2.5
|
)
|
|
Net cash provided by financing activities
| | |
136.9
|
| | |
829.9
|
|
|
Effect of exchange rate changes on cash and cash equivalents
| | |
11.3
|
| | |
(2.6
|
)
|
|
Net decrease in cash, cash equivalents and restricted cash
| | |
(99.4
|
)
| | |
(140.1
|
)
|
|
Cash, cash equivalents and restricted cash at beginning of period
| | |
186.8
|
| | |
326.9
|
|
|
Cash, cash equivalents and restricted cash at end of period
| | |
$
|
87.4
| | | |
$
|
186.8
| |
| Supplemental schedule of cash flow information: | | | | | | |
|
Cash paid (received) during the period for:
| | | | | | |
|
Interest
| | |
$
|
149.1
| | | |
$
|
91.7
| |
|
Income taxes, net of refunds
| | |
0.4
| | | |
21.9
| |
| | | | | | | |
|
|
|
| Revlon Consumer Products LLC AND SUBSIDIARIES |
| EBITDA AND ADJUSTED EBITDA RECONCILIATION |
| (dollars in millions) |
|
|
| |
|
| |
| | | Three Months Ended
December 31, |
| | | 2017 | | | 2016 |
| | | (Unaudited) |
| | | | | |
|
| Reconciliation to net loss: | | | | | | |
| | | | | |
|
|
Net loss
| | |
$
|
(76.9
|
)
| | |
$
|
(36.5
|
)
|
|
Income (loss) from discontinued operations, net of taxes
| | |
0.8
|
| | |
(2.6
|
)
|
|
Loss from continuing operations, net of taxes
| | |
(77.7
|
)
| | |
(33.9
|
)
|
| | | | | |
|
|
Interest expense
| | |
39.5
| | | |
35.9
| |
|
Amortization of debt issuance costs
| | |
2.3
| | | |
2.2
| |
|
Foreign currency (gains) losses , net
| | |
(1.7
|
)
| | |
12.2
| |
|
Provision for income taxes
| | |
59.6
| | | |
9.5
| |
|
Depreciation and amortization
| | |
44.1
| | | |
42.2
| |
|
Miscellaneous, net
| | |
(1.0
|
)
| | |
(0.5
|
)
|
| | | | | |
|
|
EBITDA
| | |
$
|
65.1
|
| | |
$
|
67.6
|
|
| | | | | |
|
|
Non-operating items:
| | | | | | |
|
Non-cash stock compensation expense
| | |
0.9
| | | |
1.6
| |
|
Restructuring and related charges
| | |
22.2
| | | |
34.5
| |
|
Acquisition and integration costs
| | |
12.7
| | | |
3.7
| |
|
Acquisition inventory adjustments
| | |
—
| | | |
16.4
| |
|
Impairment charge
| | |
10.8
| | | |
23.4
| |
|
Deferred consideration for CBB acquisition
| | |
—
| | | |
0.9
| |
|
Elizabeth Arden 2016 Business Transformation program
| | |
0.3
|
| | |
0.9
|
|
| | | | | |
|
|
Adjusted EBITDA
| | |
$
|
112.0
|
| | |
$
|
149.0
|
|
| | | | | |
|
| | | Year Ended
December 31, |
| | | 2017 | | | 2016 |
| | | (Unaudited) |
| | | | | |
|
| Reconciliation to net loss: | | | | | | |
| | | | | |
|
|
Net loss
| | |
$
|
(183.2
|
)
| | |
$
|
(21.9
|
)
|
|
Income (loss) from discontinued operations, net of taxes
| | |
2.1
|
| | |
(4.9
|
)
|
|
Loss from continuing operations, net of taxes
| | |
(185.3
|
)
| | |
(17.0
|
)
|
| | | | | |
|
|
Interest expense
| | |
149.8
| | | |
105.2
| |
|
Amortization of debt issuance costs
| | |
9.1
| | | |
6.8
| |
|
Loss on early extinguishment of debt
| | |
—
| | | |
16.9
| |
|
Foreign currency (gains) losses, net
| | |
(18.5
|
)
| | |
18.5
| |
|
Provision for income taxes
| | |
21.8
| | | |
25.5
| |
|
Depreciation and amortization
| | |
155.8
| | | |
123.2
| |
|
Miscellaneous, net
| | |
0.8
|
| | |
(0.6
|
)
|
| | | | | |
|
|
EBITDA
| | |
$
|
133.5
|
| | |
$
|
278.5
|
|
| | | | | |
|
|
Non-operating items:
| | | | | | |
|
Non-cash stock compensation expense
| | |
6.8
| | | |
6.4
| |
|
Restructuring and related charges
| | |
34.5
| | | |
36.8
| |
|
Acquisition and integration costs
| | |
52.9
| | | |
43.2
| |
|
Acquisition inventory adjustments
| | |
17.2
| | | |
20.9
| |
|
Impairment charge
| | |
10.8
| | | |
23.4
| |
|
Deferred consideration for CBB acquisition
| | |
2.0
| | | |
3.5
| |
|
Elizabeth Arden 2016 Business Transformation program
| | |
1.1
|
| | |
2.6
|
|
| | | | | |
|
|
Adjusted EBITDA
| | |
$
|
258.8
|
| | |
$
|
415.3
|
|
| | | | | | | | | |
|
|
|
| Revlon Consumer Products LLC AND SUBSIDIARIES |
| SEGMENT PROFIT, ADJUSTED EBITDA AND ADJUSTED OPERATING INCOME
RECONCILIATION |
| (dollars in millions) |
|
|
| |
|
| |
| | | Three Months Ended
December 31, |
| | | 2017 | | | 2016 |
| | | (Unaudited) |
| | | | | |
|
| Segment Net Sales: | | | | | | |
|
Consumer
| | |
$
|
355.7
| | | |
$
|
367.5
| |
|
Elizabeth Arden
| | |
313.2
| | | |
306.2
| |
|
Professional
| | |
111.8
| | | |
119.3
| |
|
Other
| | |
5.9
|
| | |
7.7
|
|
| Total Segment Net Sales | | | $ | 786.6 |
| | | $ | 800.7 |
|
| | | | | |
|
| Segment Profit: | | | | | | |
|
Consumer
| | |
105.1
| | | |
$
|
128.8
| |
|
Elizabeth Arden
| | |
48.7
| | | |
35.7
| |
|
Professional
| | |
10.4
| | | |
26.0
| |
|
Other
| | |
(1.2
|
)
| | |
(1.8
|
)
|
| Total Segment Profit | | | $ | 163.0 |
| | | $ | 188.7 |
|
| | | | | |
|
|
Unallocated Corporate Expenses
| | |
51.0
|
| | |
39.7
|
|
| Total Adjusted EBITDA | | | $ | 112.0 |
| | | $ | 149.0 |
|
| | | | | |
|
| Reconciliation to loss from continuing operations before income
taxes: | | | | | | |
|
Loss from continuing operations before income taxes
| | |
$
|
(18.1
|
)
| | |
$
|
(24.4
|
)
|
| | | | | |
|
|
Interest expense
| | |
39.5
| | | |
35.9
| |
|
Amortization of debt issuance costs
| | |
2.3
| | | |
2.2
| |
|
Foreign currency (gains) losses, net
| | |
(1.7
|
)
| | |
12.2
| |
|
Miscellaneous, net
| | |
(1.0
|
)
| | |
(0.5
|
)
|
|
Operating income
| | |
21.0
| | | |
25.4
| |
| | | | | |
|
|
Non-operating items:
| | | | | | |
|
Restructuring and related charges
| | |
22.2
| | | |
34.5
| |
|
Acquisition and integration costs
| | |
12.7
| | | |
3.7
| |
|
Acquisition inventory adjustments
| | |
—
| | | |
16.4
| |
|
Impairment charge
| | |
10.8
| | | |
23.4
| |
|
Deferred consideration for CBB acquisition
| | |
—
| | | |
0.9
| |
|
Elizabeth Arden 2016 Business Transformation program
| | |
0.3
|
| | |
0.9
|
|
|
Adjusted Operating income
| | |
67.0
| | | |
105.2
| |
| | | | | |
|
|
Non-cash stock compensation expense
| | |
0.9
| | | |
1.6
| |
|
Depreciation and amortization
| | |
44.1
| | | |
42.2
| |
| | |
| | |
|
|
Adjusted EBITDA
| | |
$
|
112.0
|
| | |
$
|
149.0
|
|
| | | | | | | | | |
|
|
|
| Revlon Consumer Products LLC AND SUBSIDIARIES |
| SEGMENT PROFIT, ADJUSTED EBITDA AND ADJUSTED OPERATING INCOME
RECONCILIATION |
| (dollars in millions) |
|
|
| |
|
| |
|
| | |
|
| | |
|
| |
| | | Year Ended
December 31,
2017 | | | Year Ended December 31, 2016 |
| | | Revlon Consumer Products LLC | | | Revlon Consumer Products LLC | | | Elizabeth Arden
Historical 1/1/16-
9/6/16 | | | Pro Forma
Adjustments | | | Pro Forma
Combined |
| | | | | | (Unaudited) |
| | | | | | | | | | | | | | | | |
|
| Segment Net Sales: | | | | | | | | | | | | | | | | | |
|
Consumer
| | |
$
|
1,288.5
| | | |
$
|
1,389.8
| | | |
$
|
—
| | | |
$
|
—
| | | |
$
|
1,389.8
| |
|
Elizabeth Arden
| | |
952.5
| | | |
441.4
| | | | |
524.9
| | | | |
—
| | | |
966.3
| |
|
Professional
| | |
432.2
| | | |
476.5
| | | | |
—
| | | | |
—
| | | |
476.5
| |
|
Other
| | |
20.5
|
| | |
26.3
|
| | |
|
—
|
| | |
|
—
|
| | |
26.3
|
|
| Total Segment Net Sales | | | $ | 2,693.7 |
| | | $ | 2,334.0 |
| | | $ |
524.9
|
| | |
$
|
—
|
| | | $ | 2,858.9 |
|
| | | | | | | | | | | | | | | | |
|
| Segment Profit: | | | | | | | | | | | | | | | | | |
|
Consumer
| | |
$
|
239.6
| | | |
$
|
349.2
| | | |
$
|
—
| | | |
$
|
—
| | | |
$
|
349.2
| |
|
Elizabeth Arden
| | |
114.2
| | | |
68.2
| | | | |
41.2
| | | | |
—
| | | |
109.4
| |
|
Professional
| | |
54.9
| | | |
99.4
| | | | |
—
| | | | |
—
| | | |
99.4
| |
|
Other
| | |
(3.7
|
)
| | |
(2.7
|
)
| | |
|
—
|
| | |
|
—
|
| | |
(2.7
|
)
|
| Total Segment Profit | | | $ | 405.0 |
| | | $ | 514.1 |
| | | $ |
41.2
|
| | |
$
|
—
|
| | | $ | 555.3 |
|
| | | | | | | | | | | | | | | | |
|
|
Unallocated Corporate Expenses
| | |
146.2
|
| | |
98.8
|
| | | |
51.2
|
| | |
|
—
|
| | |
150.0
|
|
| Total Adjusted EBITDA | | | $ | 258.8 |
| | | $ | 415.3 |
| | | $ |
(10.0
|
)
| | |
$
|
—
|
| | | $ | 405.3 |
|
| | | | | | | | | | | | | | | | |
|
| Reconciliation to loss income from continuing operations before
income taxes: | | | | | | | | | | | | | | | | | |
|
(Loss) income from continuing operations before income taxes
| | |
$
|
(163.5
|
)
| | |
$
|
8.5
| | | |
$
|
(99.4
|
)
| | |
$
|
33.9
| | | |
$
|
(57.0
|
)
|
| | | | | | | | | | | | | | | | |
|
|
Interest expense
| | |
149.8
| | | |
105.2
| | | | |
19.6
| | | | |
26.4
| | | |
151.2
| |
|
Amortization of debt issuance costs
| | |
9.1
| | | |
6.8
| | | | |
1.3
| | | | |
3.5
| | | |
11.6
| |
|
Loss on early extinguishment of debt
| | |
—
| | | |
16.9
| | | | |
—
| | | | |
—
| | | |
16.9
| |
|
Foreign currency (gains) losses, net
| | |
(18.5
|
)
| | |
18.5
| | | | |
0.6
| | | | |
—
| | | |
19.1
| |
|
Miscellaneous, net
| | |
0.8
|
| | |
(0.6
|
)
| | |
|
—
|
|
| |
|
—
|
| | |
(0.6
|
)
|
|
Operating (loss) income
| | |
(22.3
|
)
| | |
155.3
| | | | |
(77.9
|
)
| | | |
63.8
| | | |
141.2
| |
| | | | | | | | | | | | | | | | |
|
|
Non-operating items:
| | | | | | | | | | | | | | | | | |
|
Restructuring and related charges
| | |
34.5
| | | |
36.8
| | | | |
8.3
| | | | |
—
| | | |
45.1
| |
|
Acquisition and integration costs
| | |
52.9
| | | |
43.2
| | | | |
27.5
| | | | |
(67.9
|
)
| | |
2.8
| |
|
Acquisition inventory adjustments
| | |
17.2
| | | |
20.9
| | | | |
—
| | | | |
—
| | | |
20.9
| |
|
Impairment charge
| | |
10.8
| | | |
23.4
| | | | |
—
| | | | |
—
| | | |
23.4
| |
|
Deferred consideration for CBB acquisition
| | |
2.0
| | | |
3.5
| | | | |
—
| | | | |
—
| | | |
3.5
| |
|
Elizabeth Arden 2016 Business Transformation Program
| | |
1.1
|
| | |
2.6
|
| | |
|
—
|
| | |
|
—
|
| | |
2.6
|
|
|
Adjusted Operating income (loss)
| | |
96.2
| | | |
285.7
| | | | |
(42.1
|
)
| | | |
(4.1
|
)
| | |
239.5
| |
| | | | | | | | | | | | | | | | |
|
|
Non-cash stock compensation expense
| | |
6.8
| | | |
6.4
| | | | |
4.0
| | | | |
—
| | | |
10.4
| |
|
Depreciation and amortization
| | |
155.8
| | | |
123.2
| | | | |
28.1
| | | | |
4.1
| | | |
155.4
| |
| | |
| | |
| | |
|
| | |
|
| | |
|
|
Adjusted EBITDA
| | |
$
|
258.8
|
| | |
$
|
415.3
|
| | |
$
|
(10.0
|
)
| | |
$
|
—
|
| | |
$
|
405.3
|
|
| | | | | | | | | | | | | | | | | | | | | | | | |
|
|
|
| Revlon Consumer Products LLC AND SUBSIDIARIES |
| ADJUSTED GROSS PROFIT AND PRO FORMA RECONCILIATION |
| (dollars in millions) |
|
|
| |
|
| |
| | | Three Months Ended December 31, |
| | | 2017 | | | 2016 |
| | | (Unaudited) |
| | | | | |
|
|
Gross Profit
| | |
$
|
458.9
| | | |
$
|
452.4
|
| | | | | |
|
|
Non-operating items:
| | | | | | |
|
Restructuring and related charges
| | |
0.4
| | | |
—
|
|
Acquisition inventory adjustments
| | |
—
| | | |
16.4
|
|
Elizabeth Arden 2016 Business Transformation program
| | |
—
| | | |
0.1
|
| | |
| | |
|
|
Adjusted Gross Profit
| | |
$
|
459.3
|
| | |
$
|
468.9
|
| | | | | | | | |
|
|
|
| Revlon Consumer Products LLC AND SUBSIDIARIES |
| ADJUSTED GROSS PROFIT AND PRO FORMA RECONCILIATION |
| (dollars in millions) |
|
|
| |
|
| |
|
| |
|
| |
|
| |
| | | Year Ended
December 31, 2017 | | | Year Ended December 31, 2016 |
| | | Revlon Consumer Products LLC | | | Revlon Consumer Products LLC | | | Elizabeth Arden
Historical
1/1/16-9/6/16 | | | Pro Forma
Adjustments | | | Pro Forma
Combined |
| | | (Unaudited) | | | (Unaudited) |
| | | | | | | | | | | | | | |
|
|
Gross Profit
| | |
$
|
1,542.4
| | | |
$
|
1,416.9
| | | |
$
|
268.1
| | | |
$
|
(0.5
|
)
| | |
$
|
1,684.5
|
| | | | | | | | | | | | | | |
|
|
Non-operating items:
| | | | | | | | | | | | | | | |
|
Restructuring and related charges
| | |
0.9
| | | |
—
| | | |
—
| | | |
—
| | | |
—
|
|
Acquisition inventory adjustments
| | |
17.2
| | | |
20.9
| | | |
—
| | | |
—
| | | |
20.9
|
|
Elizabeth Arden 2016 Business Transformation program
| | |
0.3
| | | |
0.1
| | | |
4.2
| | | |
—
| | | |
4.3
|
| | |
| | |
| | |
| | |
| | |
|
|
Adjusted Gross Profit
| | |
$
|
1,560.8
|
| | |
$
|
1,437.9
|
| | |
$
|
272.3
|
| | |
$
|
(0.5
|
)
| | |
$
|
1,709.7
|
| | | | | | | | | | | | | | | | | | | | | | | |
|
|
|
| Revlon Consumer Products LLC AND SUBSIDIARIES |
| ADJUSTED NET (LOSS) INCOME AND ADJUSTED DILUTED (LOSS) EARNINGS
PER SHARE RECONCILIATION |
| (dollars in millions, except share and per share amounts) |
|
|
| |
|
| |
| | | Three Months Ended December 31, |
| | | 2017 | | | 2016 |
| | | (Unaudited) |
| | | | | |
|
| Reconciliation to net loss and diluted loss per share: | | | | | | |
|
Net loss
| | |
$
|
(76.9
|
)
| | |
$
|
(36.5
|
)
|
| | | | | |
|
|
Non-operating items (after-tax):
| | | | | | |
|
Loss on early extinguishment of debt
| | |
—
| | | |
—
| |
|
Restructuring and related charges
| | |
15.5
| | | |
21.6
| |
|
Acquisition and integration costs
| | |
8.6
| | | |
2.4
| |
|
Acquisition inventory adjustments
| | |
—
| | | |
10.1
| |
|
Impairment charge
| | |
7.4
| | | |
23.4
| |
|
Deferred consideration for CBB acquisition
| | |
—
| | | |
0.9
| |
|
Elizabeth Arden 2016 Business Transformation program
| | |
0.2
|
| | |
0.6
|
|
| | | | | |
|
|
Adjusted net (loss) income
| | |
$
|
(45.2
|
)
| | |
$
|
22.5
|
|
| | | | | |
|
|
Net (loss) income:
| | | | | | |
|
Diluted loss per common share
| | |
(1.46
|
)
| | |
(0.70
|
)
|
|
Adjustment to diluted loss per common share
| | |
0.60
|
| | |
1.13
|
|
|
Adjusted diluted (loss) earnings per common share
| | |
$
|
(0.86
|
)
| | |
$
|
0.43
|
|
| | | | | |
|
| U.S. GAAP weighted average number of common shares outstanding:
| | | | | | |
|
Diluted
| | |
52,635,051
|
| | |
52,513,481
|
|
| | | | | |
|
| | | Year Ended December 31, |
| | | 2017 | | | 2016 |
| | | (Unaudited) |
| | | | | |
|
| Reconciliation to net loss and diluted loss per share: | | | | | | |
|
Net loss
| | |
$
|
(183.2
|
)
| | |
$
|
(21.9
|
)
|
| | | | | |
|
|
Non-operating items (after-tax):
| | | | | | |
|
Loss on early extinguishment of debt
| | |
—
| | | |
12.0
| |
|
Restructuring and related charges
| | |
24.8
| | | |
22.8
| |
|
Acquisition and integration costs
| | |
34.2
| | | |
26.8
| |
|
Acquisition inventory adjustments
| | |
12.7
| | | |
13.0
| |
|
Impairment charge
| | |
7.4
| | | |
23.4
| |
|
Deferred consideration for CBB acquisition
| | |
2.0
| | | |
3.5
| |
|
Elizabeth Arden 2016 Business Transformation program
| | |
0.7
|
| | |
1.7
|
|
| | | | | |
|
|
Adjusted net (loss) income
| | |
$
|
(101.4
|
)
| | |
$
|
81.3
|
|
| | | | | |
|
|
Net (loss) income:
| | | | | | |
|
Diluted loss per common share
| | |
(3.48
|
)
| | |
(0.42
|
)
|
|
Adjustment to diluted loss per common share
| | |
1.55
|
| | |
1.97
|
|
|
Adjusted diluted (loss) earnings per common share
| | |
$
|
(1.93
|
)
| | |
$
|
1.55
|
|
| | | | | |
|
| U.S. GAAP weighted average number of common shares outstanding:
| | | | | | |
|
Diluted
| | |
52,597,582
|
| | |
52,504,196
|
|
| | | | | | | |
|
|
|
| Revlon Consumer Products LLC AND SUBSIDIARIES |
| FREE CASH FLOW RECONCILIATION |
| (dollars in millions) |
|
|
| |
|
| |
| | | Year Ended December 31, |
| | | 2017 | | | 2016 |
| | | (Unaudited) |
| | | | | |
|
| Reconciliation to net cash (used in) provided by operating
activities: | | | | | | |
| | | | | |
|
|
Net cash (used in) provided by operating activities
| | |
$
|
(139.3
|
)
| | |
$
|
120.1
| |
| | | | | |
|
|
Less capital expenditures
| | |
(108.3
|
)
| | |
(59.3
|
)
|
| | |
| | |
|
|
Free cash flow
| | |
$
|
(247.6
|
)
| | |
$
|
60.8
|
|
| | | | | | | | | |
|
View source version on businesswire.com: http://www.businesswire.com/news/home/20180315006264/en/
Media Relations:
Revlon
Pamela Alabaster, 212-527-5863
Source: Revlon