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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Revlon Inc New | NYSE:REV | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 3.8999 | 0 | 01:00:00 |
|
[x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
|
For the quarterly period ended September 30, 2018
|
|
|
OR
|
|
|
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
|
For the transition period from__________________ to _______________
|
|
Delaware
|
13-3662955
|
(State or other jurisdiction of incorporation or organization)
|
(I.R.S. Employer Identification No.)
|
|
|
One New York Plaza, New York, New York
|
10004
|
(Address of principal executive offices)
|
(Zip Code)
|
Large accelerated filer
¨
|
|
|
|
Accelerated filer
x
|
Non-accelerated filer
¨
|
|
Smaller reporting company
x
|
||
|
|
|
|
Emerging growth company
¨
|
|
September 30, 2018
|
|
December 31, 2017
|
||||
|
(Unaudited)
|
|
|
||||
ASSETS
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
61.8
|
|
|
$
|
87.1
|
|
Trade receivables, less allowance for doubtful accounts of $13.4 and $13.5 as of September 30, 2018 and December 31, 2017, respectively
|
441.6
|
|
|
444.8
|
|
||
Inventories
|
587.6
|
|
|
497.9
|
|
||
Prepaid expenses and other assets
|
171.2
|
|
|
113.4
|
|
||
Total current assets
|
1,262.2
|
|
|
1,143.2
|
|
||
Property, plant and equipment, net of accumulated depreciation of $418.1 and $385.5 as of September 30, 2018 and December 31, 2017, respectively
|
358.4
|
|
|
372.7
|
|
||
Deferred income taxes
|
198.0
|
|
|
138.0
|
|
||
Goodwill
|
692.1
|
|
|
692.5
|
|
||
Intangible assets, net of accumulated amortization of $160.3 and $130.9 as of September 30, 2018 and December 31, 2017, respectively
|
560.1
|
|
|
592.1
|
|
||
Other assets
|
117.5
|
|
|
118.4
|
|
||
Total assets
|
$
|
3,188.3
|
|
|
$
|
3,056.9
|
|
|
|
|
|
||||
LIABILITIES AND STOCKHOLDERS’ DEFICIENCY
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Short-term borrowings
*
|
$
|
21.4
|
|
|
$
|
12.4
|
|
Current portion of long-term debt
|
420.3
|
|
|
170.2
|
|
||
Accounts payable
|
363.2
|
|
|
336.9
|
|
||
Accrued expenses and other current liabilities
|
411.6
|
|
|
412.8
|
|
||
Total current liabilities
|
1,216.5
|
|
|
932.3
|
|
||
Long-term debt
|
2,731.4
|
|
|
2,653.7
|
|
||
Long-term pension and other post-retirement plan liabilities
|
164.1
|
|
|
172.8
|
|
||
Other long-term liabilities
|
64.5
|
|
|
68.5
|
|
||
Stockholders’ deficiency:
|
|
|
|
||||
Class A Common Stock, par value $0.01 per share: 900,000,000 shares authorized; 55,762,771 and 54,556,100 shares issued as of September 30, 2018 and December 31, 2017, respectively
|
0.5
|
|
|
0.5
|
|
||
Additional paid-in capital
|
1,054.8
|
|
|
1,040.0
|
|
||
Treasury stock, at cost: 1,533,320 and 1,114,528 shares of Class A Common Stock as of September 30, 2018 and December 31, 2017, respectively
|
(25.3
|
)
|
|
(21.7
|
)
|
||
Accumulated deficit
|
(1,784.7
|
)
|
|
(1,560.8
|
)
|
||
Accumulated other comprehensive loss
|
(233.5
|
)
|
|
(228.4
|
)
|
||
Total stockholders’ deficiency
|
(988.2
|
)
|
|
(770.4
|
)
|
||
Total liabilities and stockholders’ deficiency
|
$
|
3,188.3
|
|
|
$
|
3,056.9
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
|
|
|
(as adjusted)
(*)
|
|
|
|
|
(as adjusted)
(*)
|
|||||||
Net sales
|
$
|
655.4
|
|
|
$
|
666.5
|
|
|
1,822.9
|
|
|
$
|
1,907.1
|
|
|
Cost of sales
|
305.0
|
|
|
290.5
|
|
|
807.2
|
|
|
824.4
|
|
||||
Gross profit
|
350.4
|
|
|
376.0
|
|
|
1,015.7
|
|
|
1,082.7
|
|
||||
Selling, general and administrative expenses
|
340.8
|
|
|
362.3
|
|
|
1,087.1
|
|
|
1,074.5
|
|
||||
Acquisition and integration costs
|
3.4
|
|
|
12.7
|
|
|
12.0
|
|
|
40.2
|
|
||||
Restructuring charges and other, net
|
3.9
|
|
|
6.4
|
|
|
13.9
|
|
|
11.3
|
|
||||
Loss on disposal of minority investment
|
—
|
|
|
—
|
|
|
20.1
|
|
|
—
|
|
||||
Operating income (loss)
|
2.3
|
|
|
(5.4
|
)
|
|
(117.4
|
)
|
|
(43.3
|
)
|
||||
Other expenses:
|
|
|
|
|
|
|
|
||||||||
Interest expense
|
46.4
|
|
|
38.6
|
|
|
129.1
|
|
|
110.3
|
|
||||
Amortization of debt issuance costs
|
3.8
|
|
|
2.3
|
|
|
9.1
|
|
|
6.8
|
|
||||
Foreign currency losses (gains), net
|
1.1
|
|
|
(3.1
|
)
|
|
10.7
|
|
|
(16.8
|
)
|
||||
Miscellaneous, net
|
0.4
|
|
|
0.4
|
|
|
0.6
|
|
|
1.8
|
|
||||
Other expenses
|
51.7
|
|
|
38.2
|
|
|
$
|
149.5
|
|
|
102.1
|
|
|||
Loss from continuing operations before income taxes
|
(49.4
|
)
|
|
(43.6
|
)
|
|
(266.9
|
)
|
|
(145.4
|
)
|
||||
Benefit from income taxes
|
(38.7
|
)
|
|
(10.8
|
)
|
|
(43.1
|
)
|
|
(37.8
|
)
|
||||
Loss from continuing operations, net of taxes
|
(10.7
|
)
|
|
(32.8
|
)
|
|
(223.8
|
)
|
|
(107.6
|
)
|
||||
(Loss) income from discontinued operations, net of taxes
|
(0.4
|
)
|
|
0.4
|
|
|
(0.1
|
)
|
|
1.3
|
|
||||
Net loss
|
$
|
(11.1
|
)
|
|
$
|
(32.4
|
)
|
|
$
|
(223.9
|
)
|
|
$
|
(106.3
|
)
|
Other comprehensive (loss) income:
|
|
|
|
|
|
|
|
||||||||
Foreign currency translation adjustments, net of tax
(a)
|
(4.9
|
)
|
|
(1.2
|
)
|
|
(12.3
|
)
|
|
5.3
|
|
||||
Amortization of pension related costs, net of tax
(b)(c)
|
2.3
|
|
|
2.0
|
|
|
6.5
|
|
|
6.1
|
|
||||
Pension curtailment, net of tax
(d)
|
—
|
|
|
—
|
|
|
—
|
|
|
2.6
|
|
||||
Reclassification into earnings of accumulated losses from the de-designated 2013 Interest Rate Swap, net of tax
(e)
|
—
|
|
|
0.6
|
|
|
0.7
|
|
|
1.8
|
|
||||
Other comprehensive (loss) income, net
|
(2.6
|
)
|
|
1.4
|
|
|
(5.1
|
)
|
|
15.8
|
|
||||
Total comprehensive loss
|
$
|
(13.7
|
)
|
|
$
|
(31.0
|
)
|
|
$
|
(229.0
|
)
|
|
$
|
(90.5
|
)
|
|
|
|
|
|
|
|
|
||||||||
Basic (loss) earnings per common share:
|
|
|
|
|
|
|
|
||||||||
Continuing operations
|
$
|
(0.20
|
)
|
|
$
|
(0.62
|
)
|
|
$
|
(4.24
|
)
|
|
$
|
(2.04
|
)
|
Discontinued operations
|
(0.01
|
)
|
|
0.01
|
|
|
—
|
|
|
0.02
|
|
||||
Net loss
|
$
|
(0.21
|
)
|
|
$
|
(0.61
|
)
|
|
$
|
(4.24
|
)
|
|
$
|
(2.02
|
)
|
|
|
|
|
|
|
|
|
||||||||
Diluted (loss) earnings per common share:
|
|
|
|
|
|
|
|
||||||||
Continuing operations
|
$
|
(0.20
|
)
|
|
$
|
(0.62
|
)
|
|
$
|
(4.24
|
)
|
|
$
|
(2.04
|
)
|
Discontinued operations
|
(0.01
|
)
|
|
0.01
|
|
|
—
|
|
|
0.02
|
|
||||
Net loss
|
$
|
(0.21
|
)
|
|
$
|
(0.61
|
)
|
|
$
|
(4.24
|
)
|
|
$
|
(2.02
|
)
|
|
|
|
|
|
|
|
|
||||||||
Weighted average number of common shares outstanding:
|
|
|
|
|
|
|
|
||||||||
Basic
|
52,834,879
|
|
|
52,615,412
|
|
|
52,777,883
|
|
|
52,584,954
|
|
||||
Diluted
|
52,834,879
|
|
|
52,615,412
|
|
|
52,777,883
|
|
|
52,584,954
|
|
(*)
|
Adjusted as a result of the adoption of certain accounting pronouncements during 2018. See Note 1, "Description of Business and Summary of Significant Accounting Policies - Recently Adopted Accounting Pronouncements," for details of these adjustments.
|
(a)
|
Net of tax benefit of
nil
and $
0.2 million
for the
three months ended September 30,
2018
and
2017
, respectively, and tax expense of
nil
and $
1.5 million
for the
nine months ended September 30,
2018
and
2017
, respectively.
|
(b)
|
Net of tax expense of $
0.3 million
and
$0.4 million
for the
three months ended September 30,
2018
and
2017
, respectively, and
$0.8 million
and $
1.3 million
for the
nine months ended September 30,
2018
and
2017
, respectively.
|
(c)
|
This amount is included in the computation of net periodic benefit costs (income). See Note
10
, "Pension and Post-Retirement Benefits," for additional information regarding net periodic benefit costs (income).
|
(d)
|
Net of tax expense of
$0.3 million
for the
nine months ended September 30,
2017
.
|
(e)
|
Net of tax benefit of
nil
and
$0.4 million
for the
three months ended September 30,
2018
and
2017
, and
$0.5 million
and
$1.1 million
for the
nine months ended September 30,
2018
and
2017
, respectively.
|
|
Common Stock
|
|
Additional Paid-In Capital
|
|
Treasury Stock
|
|
Accumulated Deficit
|
|
Accumulated Other Comprehensive Loss
|
|
Total Stockholders’ Deficiency
|
||||||||||||
Balance, January 1, 2018
|
$
|
0.5
|
|
|
$
|
1,040.0
|
|
|
$
|
(21.7
|
)
|
|
$
|
(1,560.8
|
)
|
|
$
|
(228.4
|
)
|
|
$
|
(770.4
|
)
|
Treasury stock acquired, at cost
(a)
|
—
|
|
|
—
|
|
|
(3.6
|
)
|
|
—
|
|
|
—
|
|
|
(3.6
|
)
|
||||||
Stock-based compensation amortization
|
—
|
|
|
14.8
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
14.8
|
|
||||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(223.9
|
)
|
|
—
|
|
|
(223.9
|
)
|
||||||
Other comprehensive loss, net
(b)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(5.1
|
)
|
|
(5.1
|
)
|
||||||
Balance, September 30, 2018
|
$
|
0.5
|
|
|
$
|
1,054.8
|
|
|
$
|
(25.3
|
)
|
|
$
|
(1,784.7
|
)
|
|
$
|
(233.5
|
)
|
|
$
|
(988.2
|
)
|
(a)
|
Pursuant to the share withholding provisions of the Fourth Amended and Restated Revlon, Inc. Stock Plan (the "Stock Plan"), the Company withheld an aggregate of
167,297
shares of Revlon Class A Common Stock during the
nine months ended September 30,
2018
to satisfy certain minimum statutory tax withholding requirements related to the vesting of restricted shares for certain senior executives. These withheld shares were recorded as treasury stock using the cost method, at a weighted-average price per share of
$21.42
during the
nine months ended September 30,
2018
, based on the closing price of Revlon Class A Common Stock as reported on the New York Stock Exchange (the "NYSE") consolidated tape on each respective vesting date, for a total of
$3.6 million
. See Note 15, "Stock Compensation Plan" to the Consolidated Financial Statements in Revlon's Annual Report on Form 10-K for the fiscal year ended December 31, 2017, filed with the SEC on March 15, 2018 (the "2017 Form 10-K"), for details regarding restricted stock awards under the Stock Plan.
|
(b)
|
See Note
12
, "Accumulated Other Comprehensive Loss," regarding the changes in the accumulated balances for each component of other comprehensive loss during the
nine months ended September 30,
2018
.
|
|
Nine Months Ended September 30,
|
||||||
|
2018
|
|
2017
|
||||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
|
|
|
||||
Net loss
|
$
|
(223.9
|
)
|
|
$
|
(106.3
|
)
|
Adjustments to reconcile net loss to net cash used in operating activities:
|
|
|
|
||||
Depreciation and amortization
|
119.4
|
|
|
111.7
|
|
||
Foreign currency losses (gains) from re-measurement
|
10.7
|
|
|
(20.8
|
)
|
||
Amortization of debt discount
|
0.9
|
|
|
0.9
|
|
||
Stock-based compensation amortization
|
14.8
|
|
|
5.9
|
|
||
Benefit from deferred income taxes
|
(61.5
|
)
|
|
(53.2
|
)
|
||
Amortization of debt issuance costs
|
9.1
|
|
|
6.8
|
|
||
Non-cash loss on disposal of minority investment
|
18.6
|
|
|
—
|
|
||
Loss on sale of certain assets
|
0.6
|
|
|
1.5
|
|
||
Pension and other post-retirement cost
|
2.0
|
|
|
1.9
|
|
||
Change in assets and liabilities:
|
|
|
|
||||
Increase in trade receivables
|
(7.0
|
)
|
|
(25.1
|
)
|
||
Increase in inventories
|
(100.3
|
)
|
|
(121.6
|
)
|
||
Increase in prepaid expenses and other current assets
|
(60.5
|
)
|
|
(13.1
|
)
|
||
Increase in accounts payable
|
39.3
|
|
|
36.4
|
|
||
Decrease in accrued expenses and other current liabilities
|
(1.6
|
)
|
|
(51.8
|
)
|
||
Pension and other post-retirement plan contributions
|
(6.1
|
)
|
|
(5.8
|
)
|
||
Purchases of permanent displays
|
(57.0
|
)
|
|
(37.3
|
)
|
||
Other, net
|
5.8
|
|
|
(4.3
|
)
|
||
Net cash used in operating activities
|
(296.7
|
)
|
|
(274.2
|
)
|
||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
|
|
|
||||
Capital expenditures
|
(41.6
|
)
|
|
(69.5
|
)
|
||
Net cash used in investing activities
|
(41.6
|
)
|
|
(69.5
|
)
|
||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
|
|
|
||||
Net increase in short-term borrowings and overdraft
|
2.3
|
|
|
1.2
|
|
||
Net borrowings under the 2016 Revolving Credit Facility
|
251.3
|
|
|
243.9
|
|
||
Net borrowings under the 2018 Foreign Asset-Based Term Loan
|
89.4
|
|
|
—
|
|
||
Repayments under the 2016 Term Loan Facility
|
(13.5
|
)
|
|
(13.5
|
)
|
||
Payment of financing costs
|
(9.4
|
)
|
|
(1.1
|
)
|
||
Tax withholdings related to net share settlements of restricted stock units and awards
|
(3.6
|
)
|
|
(2.5
|
)
|
||
Other financing activities
|
0.1
|
|
|
(1.3
|
)
|
||
Net cash provided by financing activities
|
316.6
|
|
|
226.7
|
|
||
Effect of exchange rate changes on cash, cash equivalents and restricted cash
|
(3.2
|
)
|
|
9.4
|
|
||
Net decrease in cash, cash equivalents and restricted cash
|
(24.9
|
)
|
|
(107.6
|
)
|
||
Cash, cash equivalents and restricted cash at beginning of period
(a)
|
87.4
|
|
|
186.8
|
|
||
Cash, cash equivalents and restricted cash at end of period
(a)
|
$
|
62.5
|
|
|
$
|
79.2
|
|
Supplemental schedule of cash flow information:
|
|
|
|
||||
Cash paid during the period for:
|
|
|
|
||||
Interest
|
$
|
131.4
|
|
|
$
|
124.5
|
|
Income taxes, net of refunds
|
11.7
|
|
|
11.1
|
|
|
Restructuring Charges and Other, Net
|
|
|
|
|
|
|
||||||||||||||||
|
Employee Severance and Other Personnel Benefits
|
|
Lease Termination and Other Costs
|
|
Total Restructuring Charges
|
|
Inventory Adjustments
(b)
|
|
Other Related Charges
(c)
|
|
Total Restructuring and Related Charges
|
||||||||||||
Charges incurred through December 31, 2017
|
$
|
62.8
|
|
|
$
|
5.0
|
|
|
$
|
67.8
|
|
|
$
|
1.4
|
|
|
$
|
3.0
|
|
|
$
|
72.2
|
|
Charges incurred during the nine months ended September 30, 2018
|
12.7
|
|
|
(1.1
|
)
|
(a)
|
11.6
|
|
|
0.4
|
|
|
—
|
|
|
12.0
|
|
||||||
Cumulative charges incurred through September 30, 2018
|
$
|
75.5
|
|
|
$
|
3.9
|
|
|
$
|
79.4
|
|
|
$
|
1.8
|
|
|
$
|
3.0
|
|
|
$
|
84.2
|
|
|
|
Charges incurred during the nine months ended September 30, 2018
|
|
Cumulative charges incurred through September 30, 2018
|
||||
Revlon
|
|
$
|
8.6
|
|
|
$
|
33.2
|
|
Elizabeth Arden
|
|
0.4
|
|
|
13.2
|
|
||
Portfolio
|
|
0.8
|
|
|
14.2
|
|
||
Fragrances
|
|
1.8
|
|
|
18.8
|
|
||
Total
|
|
$
|
11.6
|
|
|
$
|
79.4
|
|
|
|
|
|
|
|
|
Utilized, Net
|
|
|
||||||||||||||
Liability
Balance at January 1, 2018
|
|
Expense (Income), Net
|
|
Foreign Currency Translation
|
|
Cash
|
|
Non-cash
|
|
Liability Balance at September 30, 2018
|
|||||||||||||
EA Integration Restructuring Program:
(a)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Employee severance and other personnel benefits
|
$
|
25.8
|
|
|
$
|
12.7
|
|
|
$
|
(0.2
|
)
|
|
$
|
(17.6
|
)
|
|
$
|
—
|
|
|
$
|
20.7
|
|
Other
|
3.9
|
|
|
(0.7
|
)
|
|
—
|
|
|
(0.8
|
)
|
|
—
|
|
|
2.4
|
|
||||||
Total EA Integration Restructuring Program
|
29.7
|
|
|
12.0
|
|
|
(0.2
|
)
|
|
(18.4
|
)
|
|
—
|
|
|
23.1
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Other individually immaterial actions:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Employee severance and other personnel benefits
|
2.5
|
|
|
2.3
|
|
|
—
|
|
|
(2.5
|
)
|
|
—
|
|
|
2.3
|
|
||||||
Other
|
1.7
|
|
|
—
|
|
|
(0.1
|
)
|
|
—
|
|
|
—
|
|
|
1.6
|
|
||||||
Total other individually immaterial actions
|
4.2
|
|
|
2.3
|
|
|
(0.1
|
)
|
|
(2.5
|
)
|
|
—
|
|
|
3.9
|
|
||||||
Total restructuring reserve
|
$
|
33.9
|
|
|
$
|
14.3
|
|
|
$
|
(0.3
|
)
|
|
$
|
(20.9
|
)
|
|
$
|
—
|
|
|
$
|
27.0
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Net sales
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
(Loss) income from discontinued operations, before taxes
|
(0.4
|
)
|
|
0.7
|
|
|
(0.1
|
)
|
|
1.6
|
|
||||
Provision for income taxes
|
—
|
|
|
0.3
|
|
|
—
|
|
|
0.3
|
|
||||
(Loss) income from discontinued operations, net of taxes
|
(0.4
|
)
|
|
0.4
|
|
|
(0.1
|
)
|
|
1.3
|
|
|
September 30,
|
|
December 31,
|
||||
|
2018
|
|
2017
|
||||
Cash and cash equivalents
|
$
|
1.1
|
|
|
$
|
1.3
|
|
Trade receivables, net
|
0.2
|
|
|
0.2
|
|
||
Total current assets
|
1.3
|
|
|
1.5
|
|
||
Total assets
|
$
|
1.3
|
|
|
$
|
1.5
|
|
|
|
|
|
||||
Accounts payable
|
$
|
0.5
|
|
|
$
|
0.5
|
|
Accrued expenses and other
|
3.3
|
|
|
3.5
|
|
||
Total current liabilities
|
3.8
|
|
|
4.0
|
|
||
Total liabilities
|
$
|
3.8
|
|
|
$
|
4.0
|
|
|
September 30,
|
|
December 31,
|
||||
|
2018
|
|
2017
|
||||
Raw materials and supplies
|
$
|
160.4
|
|
|
$
|
123.4
|
|
Work-in-process
|
11.0
|
|
|
22.0
|
|
||
Finished goods
|
416.2
|
|
|
352.5
|
|
||
|
$
|
587.6
|
|
|
$
|
497.9
|
|
|
Revlon
|
|
Portfolio
|
|
Elizabeth Arden
|
|
Fragrances
|
|
Total
|
||||||||||
Balance at January 1, 2018
|
$
|
265.3
|
|
|
$
|
189.5
|
|
|
$
|
116.9
|
|
|
$
|
120.8
|
|
|
$
|
692.5
|
|
Foreign currency translation adjustment
|
(0.2
|
)
|
|
(0.2
|
)
|
|
—
|
|
|
—
|
|
|
(0.4
|
)
|
|||||
Balance at September 30, 2018
|
$
|
265.1
|
|
|
$
|
189.3
|
|
|
$
|
116.9
|
|
|
$
|
120.8
|
|
|
$
|
692.1
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cumulative goodwill impairment charges
(a)
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
37.2
|
|
|
September 30, 2018
|
||||||||||||
|
Gross Carrying Amount
|
|
Accumulated Amortization
|
|
Net Carrying Amount
|
|
Weighted-Average Useful Life (in Years)
|
||||||
Finite-lived intangible assets:
|
|
|
|
|
|
|
|
||||||
Trademarks and licenses
|
$
|
272.3
|
|
|
$
|
(87.8
|
)
|
|
$
|
184.5
|
|
|
13
|
Customer relationships
|
249.0
|
|
|
(58.3
|
)
|
|
190.7
|
|
|
12
|
|||
Patents and internally-developed intellectual property
|
20.9
|
|
|
(9.7
|
)
|
|
11.2
|
|
|
6
|
|||
Distribution rights
|
31.0
|
|
|
(3.6
|
)
|
|
27.4
|
|
|
16
|
|||
Other
|
1.3
|
|
|
(0.9
|
)
|
|
0.4
|
|
|
1
|
|||
Total finite-lived intangible assets
|
$
|
574.5
|
|
|
$
|
(160.3
|
)
|
|
$
|
414.2
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Indefinite-lived intangible assets:
|
|
|
|
|
|
|
|
||||||
Trade names
|
$
|
145.9
|
|
|
N/A
|
|
|
$
|
145.9
|
|
|
|
|
Total indefinite-lived intangible assets
|
$
|
145.9
|
|
|
N/A
|
|
|
$
|
145.9
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Total intangible assets
|
$
|
720.4
|
|
|
$
|
(160.3
|
)
|
|
$
|
560.1
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
December 31, 2017
|
||||||||||||
|
Gross Carrying Amount
|
|
Accumulated Amortization
|
|
Net Carrying Amount
|
|
Weighted-Average Useful Life (in Years)
|
||||||
Finite-lived intangible assets:
|
|
|
|
|
|
|
|
||||||
Trademarks and licenses
|
$
|
271.4
|
|
|
$
|
(72.8
|
)
|
|
$
|
198.6
|
|
|
13
|
Customer relationships
|
250.6
|
|
|
(46.8
|
)
|
|
203.8
|
|
|
13
|
|||
Patents and internally-developed intellectual property
|
20.8
|
|
|
(8.4
|
)
|
|
12.4
|
|
|
7
|
|||
Distribution rights
|
31.0
|
|
|
(2.3
|
)
|
|
28.7
|
|
|
17
|
|||
Other
|
1.3
|
|
|
(0.6
|
)
|
|
0.7
|
|
|
2
|
|||
Total finite-lived intangible assets
|
$
|
575.1
|
|
|
$
|
(130.9
|
)
|
|
$
|
444.2
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Indefinite-lived intangible assets:
|
|
|
|
|
|
|
|
||||||
Trade names
|
$
|
147.9
|
|
|
N/A
|
|
|
$
|
147.9
|
|
|
|
|
Total indefinite-lived intangible assets
|
$
|
147.9
|
|
|
N/A
|
|
|
$
|
147.9
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Total intangible assets
|
$
|
723.0
|
|
|
$
|
(130.9
|
)
|
|
$
|
592.1
|
|
|
|
|
Estimated Amortization Expense
|
||
2018
|
$
|
9.6
|
|
2019
|
37.8
|
|
|
2020
|
37.1
|
|
|
2021
|
36.1
|
|
|
2022
|
34.7
|
|
|
Thereafter
|
258.9
|
|
|
Total
|
$
|
414.2
|
|
|
September 30, 2018
|
|
December 31, 2017
|
||||
Advertising and promotional costs
|
$
|
84.2
|
|
|
$
|
84.0
|
|
Sales returns and allowances
|
70.0
|
|
|
61.7
|
|
||
Compensation and related benefits
|
63.0
|
|
|
59.6
|
|
||
Taxes
|
40.9
|
|
|
48.4
|
|
||
Restructuring reserve
|
26.5
|
|
|
33.3
|
|
||
Interest
|
19.1
|
|
|
23.8
|
|
||
Other
|
107.9
|
|
|
102.0
|
|
||
Total
|
$
|
411.6
|
|
|
$
|
412.8
|
|
|
September 30, 2018
|
|
December 31, 2017
|
||||
2016 Term Loan Facility: 2016 Term Loan due 2023, net of discounts and debt issuance costs
(a)
|
$
|
1,727.4
|
|
|
$
|
1,735.9
|
|
2016 Revolving Credit Facility due 2021, net of debt issuance costs
(b)
|
402.2
|
|
|
152.1
|
|
||
5.75% Senior Notes due 2021, net of debt issuance costs
(c)
|
496.2
|
|
|
495.1
|
|
||
6.25% Senior Notes due 2024, net of debt issuance costs
(d)
|
441.1
|
|
|
440.3
|
|
||
2018 Foreign Asset-Based Term Loan Credit Agreement due 2021, net of debt issuance costs
(e)
|
84.3
|
|
|
—
|
|
||
Spanish Government Loan due 2025
|
0.5
|
|
|
0.5
|
|
||
|
$
|
3,151.7
|
|
|
$
|
2,823.9
|
|
Less current portion
(*)
|
(420.3
|
)
|
|
(170.2
|
)
|
||
|
$
|
2,731.4
|
|
|
$
|
2,653.7
|
|
|
|
|
|
||||
Short-term borrowings
(f)
|
$
|
21.4
|
|
|
$
|
12.4
|
|
|
Commitment
|
|
Borrowing Base
|
|
Aggregate principal amount outstanding at September 30, 2018
|
|
Availability at September 30, 2018
|
||||||||
Tranche A of the 2016 Revolving Credit Facility
|
$
|
400.0
|
|
|
$
|
433.8
|
|
|
$
|
366.8
|
|
|
(a)
N/A
|
|
|
Tranche B of the 2016 Revolving Credit Facility
|
41.5
|
|
|
44.3
|
|
|
41.5
|
|
|
N/A
|
|
||||
Total Tranche A & B of the 2016 Revolving Credit Facility
(a)
|
$
|
441.5
|
|
|
$
|
478.1
|
|
|
$
|
408.3
|
|
|
$
|
1.0
|
|
2018 Senior Line of Credit Facility
|
50.0
|
|
|
N/A
|
|
|
11.0
|
|
|
39.0
|
|
•
|
Level 1: Fair valuing the asset or liability using observable inputs, such as quoted prices in active markets for identical assets or liabilities;
|
•
|
Level 2: Fair valuing the asset or liability using inputs other than quoted prices that are observable for the applicable asset or liability, either directly or indirectly, such as quoted prices for similar (as opposed to identical) assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active; and
|
•
|
Level 3: Fair valuing the asset or liability using unobservable inputs that reflect the Company’s own assumptions regarding the applicable asset or liability.
|
|
September 30, 2018
|
||||||||||||||
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Derivatives:
|
|
|
|
|
|
|
|
||||||||
FX Contracts
(a)
|
$
|
0.1
|
|
|
$
|
—
|
|
|
$
|
0.1
|
|
|
$
|
—
|
|
Total assets at fair value
|
$
|
0.1
|
|
|
$
|
—
|
|
|
$
|
0.1
|
|
|
$
|
—
|
|
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Derivatives:
|
|
|
|
|
|
|
|
||||||||
FX Contracts
(a)
|
$
|
0.1
|
|
|
$
|
—
|
|
|
$
|
0.1
|
|
|
$
|
—
|
|
Total liabilities at fair value
|
$
|
0.1
|
|
|
$
|
—
|
|
|
$
|
0.1
|
|
|
$
|
—
|
|
|
December 31, 2017
|
||||||||||||||
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Derivatives:
|
|
|
|
|
|
|
|
||||||||
FX Contracts
(a)
|
$
|
0.6
|
|
|
$
|
—
|
|
|
$
|
0.6
|
|
|
$
|
—
|
|
Total assets at fair value
|
$
|
0.6
|
|
|
$
|
—
|
|
|
$
|
0.6
|
|
|
$
|
—
|
|
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Derivatives:
|
|
|
|
|
|
|
|
||||||||
FX Contracts
(a)
|
$
|
1.9
|
|
|
$
|
—
|
|
|
$
|
1.9
|
|
|
$
|
—
|
|
2013 Interest Rate Swap
(b)
|
0.9
|
|
|
—
|
|
|
0.9
|
|
|
—
|
|
||||
Total liabilities at fair value
|
$
|
2.8
|
|
|
$
|
—
|
|
|
$
|
2.8
|
|
|
$
|
—
|
|
|
September 30, 2018
|
||||||||||||||||||
|
Fair Value
|
|
|
||||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
|
Carrying Value
|
||||||||||
Liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Long-term debt, including current portion
(a)
|
$
|
—
|
|
|
$
|
2,539.3
|
|
|
$
|
—
|
|
|
$
|
2,539.3
|
|
|
$
|
3,151.7
|
|
|
December 31, 2017
|
||||||||||||||||||
|
Fair Value
|
|
|
||||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
|
Carrying Value
|
||||||||||
Liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Long-term debt, including current portion
(a)
|
$
|
—
|
|
|
$
|
2,131.5
|
|
|
$
|
—
|
|
|
$
|
2,131.5
|
|
|
$
|
2,823.9
|
|
|
Fair Values of Derivative Instruments
|
||||||||||||||||||
|
Assets
|
|
Liabilities
|
||||||||||||||||
|
Balance Sheet
|
|
September 30,
2018 |
|
December 31,
2017 |
|
Balance Sheet
|
|
September 30,
2018 |
|
December 31,
2017 |
||||||||
|
Classification
|
|
Fair Value
|
|
Fair Value
|
|
Classification
|
|
Fair Value
|
|
Fair Value
|
||||||||
Derivative financial instruments:
|
|
|
|
|
|
|
|
|
|||||||||||
FX Contracts
(a)
|
Prepaid expenses and other
|
|
$
|
0.1
|
|
|
$
|
0.6
|
|
|
Accrued Expenses and other
|
|
$
|
0.1
|
|
|
$
|
1.9
|
|
2013 Interest Rate Swap
(b)
|
Prepaid expenses and other
|
|
—
|
|
|
—
|
|
|
Accrued expenses and other
|
|
—
|
|
|
0.9
|
|
|
Amount of Gain Recognized in Other Comprehensive (Loss) Income
|
||||||||||||||
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
|||||||||||||
2018
|
|
2017
|
|
2018
|
|
2017
|
|||||||||
Derivatives previously designated as hedging instruments:
|
|
|
|
|
|
|
|
||||||||
2013 Interest Rate Swap, net of tax
(a)
|
$
|
—
|
|
|
$
|
0.6
|
|
|
$
|
0.7
|
|
|
$
|
1.8
|
|
|
Pension Plans |
|
Other
Post-Retirement Benefit Plans
|
||||||||||||
|
Three Months Ended September 30,
|
||||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Net periodic benefit costs:
|
|
|
|
|
|
|
|
||||||||
Service cost
|
$
|
0.5
|
|
|
$
|
0.6
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Interest cost
|
4.6
|
|
|
4.9
|
|
|
0.1
|
|
|
0.1
|
|
||||
Expected return on plan assets
|
(6.9
|
)
|
|
(7.1
|
)
|
|
—
|
|
|
—
|
|
||||
Amortization of actuarial loss
|
2.4
|
|
|
2.3
|
|
|
0.1
|
|
|
—
|
|
||||
Total net periodic benefit costs
|
$
|
0.6
|
|
|
$
|
0.7
|
|
|
$
|
0.2
|
|
|
$
|
0.1
|
|
|
Pension Plans
|
|
Other
Post-Retirement Benefit Plans |
||||||||||||
|
Nine Months Ended September 30,
|
||||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Net periodic benefit costs:
|
|
|
|
|
|
|
|
||||||||
Service cost
|
$
|
1.5
|
|
|
$
|
1.9
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Interest cost
|
13.9
|
|
|
14.7
|
|
|
0.3
|
|
|
0.3
|
|
||||
Expected return on plan assets
|
(20.8
|
)
|
|
(21.4
|
)
|
|
—
|
|
|
—
|
|
||||
Amortization of actuarial loss
|
6.9
|
|
|
7.1
|
|
|
0.3
|
|
|
0.2
|
|
||||
Curtailment gain
(a)
|
—
|
|
|
(0.8
|
)
|
|
—
|
|
|
—
|
|
||||
Total net periodic benefit costs prior to allocation
|
$
|
1.5
|
|
|
$
|
1.5
|
|
|
$
|
0.6
|
|
|
$
|
0.5
|
|
Portion allocated to Revlon Holdings
|
(0.1
|
)
|
|
(0.1
|
)
|
|
—
|
|
|
—
|
|
||||
Total net periodic benefit costs
|
$
|
1.4
|
|
|
$
|
1.4
|
|
|
$
|
0.6
|
|
|
$
|
0.5
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Net periodic benefit costs:
|
|
|
|
|
|
|
|
||||||||
Cost of sales
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Selling, general and administrative expense
|
0.5
|
|
|
0.7
|
|
|
1.5
|
|
|
1.9
|
|
||||
Miscellaneous, net
|
0.3
|
|
|
0.1
|
|
|
0.5
|
|
|
—
|
|
||||
Total net periodic benefit costs
(a)
|
$
|
0.8
|
|
|
$
|
0.8
|
|
|
$
|
2.0
|
|
|
$
|
1.9
|
|
•
|
reducing the U.S. federal corporate tax rate;
|
•
|
requiring a one-time transition tax on certain unrepatriated earnings of foreign subsidiaries;
|
•
|
imposing a new limitation on the deductibility of interest;
|
•
|
a general elimination of U.S. federal income taxes on dividends from foreign subsidiaries;
|
•
|
a new provision designed to tax global intangible low-taxed income ("GILTI");
|
•
|
increased limitations on the deductibility of certain executive compensation; and
|
•
|
changes to net operating loss carry-forward periods and annual utilization.
|
|
Foreign Currency Translation
|
|
Actuarial (Loss) Gain on Post-retirement Benefits
|
|
Deferred Gain (Loss) - Hedging
|
|
Other
|
|
Accumulated Other Comprehensive Loss
|
||||||||||
Balance at January 1, 2018
|
$
|
(15.0
|
)
|
|
$
|
(212.4
|
)
|
|
$
|
(0.7
|
)
|
|
$
|
(0.3
|
)
|
|
$
|
(228.4
|
)
|
Currency translation adjustment
|
(12.3
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(12.3
|
)
|
|||||
Amortization of pension related costs, net of tax of $(0.8) million
(a)
|
—
|
|
|
6.5
|
|
|
—
|
|
|
—
|
|
|
6.5
|
|
|||||
Amortization of deferred losses related to the de-designated 2013 Interest Rate Swap, net of tax of $0.5 million
(b)
|
—
|
|
|
—
|
|
|
0.7
|
|
|
—
|
|
|
0.7
|
|
|||||
Other comprehensive (loss) income
|
$
|
(12.3
|
)
|
|
$
|
6.5
|
|
|
$
|
0.7
|
|
|
$
|
—
|
|
|
$
|
(5.1
|
)
|
Balance at September 30, 2018
|
$
|
(27.3
|
)
|
|
$
|
(205.9
|
)
|
|
$
|
—
|
|
|
$
|
(0.3
|
)
|
|
$
|
(233.5
|
)
|
|
|
|
|
|
2013
Interest Rate Swap
|
||
Beginning accumulated losses at January 1, 2018
|
|
$
|
(0.7
|
)
|
Reclassifications into earnings (net of $0.5 million tax benefit)
(a)
|
|
0.7
|
|
|
Ending accumulated losses at September 30, 2018
|
|
$
|
—
|
|
|
|
2013
Interest Rate Swap
|
||
Beginning accumulated losses at June 30, 2017
|
|
$
|
(1.8
|
)
|
Reclassifications into earnings (net of $0.4 million tax benefit)
(a)
|
|
0.6
|
|
|
Ending accumulated losses at September 30, 2017
|
|
$
|
(1.2
|
)
|
|
|
2013
Interest Rate Swap
|
||
Beginning accumulated losses at January 1, 2017
|
|
$
|
(3.0
|
)
|
Reclassifications into earnings (net of $1.1 million tax benefit)
(a)
|
|
1.8
|
|
|
Ending accumulated losses at September 30, 2017
|
|
$
|
(1.2
|
)
|
•
|
Revlon
- The Revlon segment is comprised of the Company's flagship Revlon brands. Revlon segment products are primarily marketed, distributed and sold in the mass retail channel, large volume retailers, chain drug and food stores, chemist shops, hypermarkets, general merchandise stores, e-commerce sites, television shopping, department stores, professional hair and nail salons, one-stop shopping beauty retailers, specialty cosmetic stores and perfumeries in the U.S. and internationally under brands such as
Revlon
in color cosmetics;
Revlon ColorSilk
and
Revlon Professional
in hair color;
Revlon
in beauty tools; and
Revlon
in nail color.
|
•
|
Elizabeth Arden
- The Elizabeth Arden segment is comprised of the Company's Elizabeth Arden branded products. The Elizabeth Arden segment markets, distributes and sells fragrances, skin care and color cosmetics primarily to prestige retailers, department and specialty stores, perfumeries, boutiques, e-commerce sites, the mass retail channel, travel retailers and distributors, as well as direct sales to consumers via its Elizabeth Arden branded retail stores and ElizabethArden.com e-commerce business, in the U.S. and internationally, under brands such as
Elizabeth Arden Ceramide, Prevage, Eight Hour, SUPERSTART, Visible Difference
and
Skin Illuminating
in the Elizabeth Arden skin care brands; and
Elizabeth Arden White Tea, Elizabeth Arden Red Door, Elizabeth Arden 5th Avenue
and
Elizabeth Arden Green Tea
in Elizabeth Arden fragrances.
|
•
|
Portfolio
- The Company’s Portfolio segment markets, distributes and sells a comprehensive line of premium, specialty and mass products primarily to the mass retail channel, hair and nail salons and professional salon distributors in the U.S. and internationally and large volume retailers, specialty and department stores under brands such as
Almay
and
SinfulColors
in color cosmetics;
CND
in nail polishes and nail enhancements, including
CND Shellac
and
CND Vinylux
nail polishes;
Cutex
nail care products;
Pure Ice
in nail polishes;
American Crew
in men’s grooming products; and
Mitchum
in anti-perspirant deodorants. The Portfolio segment also includes a multi-cultural hair care line consisting of
Creme of Nature
hair care products, which are sold in both professional salons and in large volume retailers and other retailers, primarily in the U.S.; and a body care line under the
Natural Honey
brand and hair color
|
•
|
Fragrances
- The Fragrances segment includes the development, marketing and distribution of certain owned and licensed fragrances as well as the distribution of prestige fragrance brands owned by third parties. These products are typically sold to retailers in the U.S. and internationally, including prestige retailers, specialty stores, e-commerce sites, the mass retail channel, travel retailers and other international retailers. The owned and licensed fragrances include brands such as
Juicy Couture, John Varvatos, All Saints, La Perla, Wildfox, Charlie, Curve, Elizabeth Taylor
,
Britney Spears
,
Christina Aguilera
,
Shawn
Mendes
,
Halston,
Ed Hardy
,
Geoffrey Beene
,
Alfred Sung
,
Giorgio Beverly Hills
,
Lucky Brand
,
Paul Sebastian
,
White Shoulders
and
Jennifer Aniston
.
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Segment Net Sales:
|
|
|
|
|
|
|
|
||||||||
Revlon
|
$
|
249.5
|
|
|
$
|
254.5
|
|
|
$
|
736.9
|
|
|
$
|
787.8
|
|
Elizabeth Arden
|
122.1
|
|
|
104.8
|
|
|
333.9
|
|
|
301.6
|
|
||||
Portfolio
|
138.4
|
|
|
147.9
|
|
|
420.5
|
|
|
437.9
|
|
||||
Fragrances
|
145.4
|
|
|
159.3
|
|
|
331.6
|
|
|
379.8
|
|
||||
Total
|
$
|
655.4
|
|
|
$
|
666.5
|
|
|
$
|
1,822.9
|
|
|
$
|
1,907.1
|
|
|
|
|
|
|
|
|
|
||||||||
Segment Profit:
|
|
|
|
|
|
|
|
||||||||
Revlon
|
$
|
36.8
|
|
|
$
|
22.4
|
|
|
$
|
75.6
|
|
|
$
|
98.1
|
|
Elizabeth Arden
|
6.6
|
|
|
1.6
|
|
|
2.3
|
|
|
2.3
|
|
||||
Portfolio
|
2.1
|
|
|
7.7
|
|
|
(5.8
|
)
|
|
7.7
|
|
||||
Fragrances
|
26.9
|
|
|
22.0
|
|
|
41.2
|
|
|
38.7
|
|
||||
Total
|
$
|
72.4
|
|
|
$
|
53.7
|
|
|
$
|
113.3
|
|
|
$
|
146.8
|
|
|
|
|
|
|
|
|
|
||||||||
Reconciliation:
|
|
|
|
|
|
|
|
||||||||
Total Segment Profit
|
$
|
72.4
|
|
|
$
|
53.7
|
|
|
$
|
113.3
|
|
|
146.8
|
|
|
Less:
|
|
|
|
|
|
|
|
||||||||
Depreciation and amortization
|
40.1
|
|
|
37.9
|
|
|
119.4
|
|
|
111.7
|
|
||||
Non-cash stock compensation expense
|
6.3
|
|
|
1.5
|
|
|
14.8
|
|
|
5.9
|
|
||||
Non-Operating items:
|
|
|
|
|
|
|
|
|
|
|
|||||
Restructuring and related charges
|
3.8
|
|
|
6.6
|
|
|
14.8
|
|
|
12.3
|
|
||||
Acquisition and integration costs
|
3.4
|
|
|
12.7
|
|
|
12.0
|
|
|
40.2
|
|
||||
Loss on disposal of minority investment
|
—
|
|
|
—
|
|
|
20.1
|
|
|
—
|
|
||||
Oxford SAP disruption-related charges
|
16.5
|
|
|
—
|
|
|
49.6
|
|
|
—
|
|
||||
Elizabeth Arden 2016 Business Transformation Program
|
—
|
|
|
0.1
|
|
|
—
|
|
|
0.8
|
|
||||
Elizabeth Arden inventory purchase accounting adjustment, cost of sales
|
—
|
|
|
—
|
|
|
—
|
|
|
17.2
|
|
||||
Deferred compensation
|
—
|
|
|
0.3
|
|
|
—
|
|
|
2.0
|
|
||||
Operating income (loss)
|
2.3
|
|
|
(5.4
|
)
|
|
(117.4
|
)
|
|
(43.3
|
)
|
||||
Less:
|
|
|
|
|
|
|
|
|
|||||||
Interest Expense
|
46.4
|
|
|
38.6
|
|
|
129.1
|
|
|
110.3
|
|
||||
Amortization of debt issuance costs
|
3.8
|
|
|
2.3
|
|
|
9.1
|
|
|
6.8
|
|
||||
Foreign currency losses (gains), net
|
1.1
|
|
|
(3.1
|
)
|
|
10.7
|
|
|
(16.8
|
)
|
||||
Miscellaneous, net
|
0.4
|
|
|
0.4
|
|
|
0.6
|
|
|
1.8
|
|
||||
Loss from continuing operations before income taxes
|
$
|
(49.4
|
)
|
|
$
|
(43.6
|
)
|
|
$
|
(266.9
|
)
|
|
$
|
(145.4
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
|
Three Months Ended September 30, 2018
|
|
Nine Months Ended September 30, 2018
|
||||||||||||||||||||||||||||||||||||
|
Revlon
|
|
Elizabeth Arden
|
|
Portfolio
|
|
Fragrances
|
|
Total
|
|
Revlon
|
|
Elizabeth Arden
|
|
Portfolio
|
|
Fragrances
|
|
Total
|
||||||||||||||||||||
Geographic Area:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Net Sales
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
North America
|
$
|
123.1
|
|
|
$
|
40.3
|
|
|
$
|
88.1
|
|
|
$
|
99.3
|
|
|
$
|
350.8
|
|
|
$
|
388.2
|
|
|
$
|
96.2
|
|
|
$
|
264.8
|
|
|
$
|
216.9
|
|
|
$
|
966.1
|
|
EMEA*
|
57.9
|
|
|
48.3
|
|
|
40.5
|
|
|
33.2
|
|
|
179.9
|
|
|
166.5
|
|
|
141.4
|
|
|
126.0
|
|
|
81.6
|
|
|
515.5
|
|
||||||||||
Asia
|
28.6
|
|
|
23.2
|
|
|
1.1
|
|
|
3.4
|
|
|
56.3
|
|
|
78.5
|
|
|
71.6
|
|
|
3.1
|
|
|
9.9
|
|
|
163.1
|
|
||||||||||
Latin America*
|
19.9
|
|
|
3.2
|
|
|
6.0
|
|
|
3.4
|
|
|
32.5
|
|
|
49.3
|
|
|
7.9
|
|
|
16.8
|
|
|
10.5
|
|
|
84.5
|
|
||||||||||
Pacific*
|
20.0
|
|
|
7.1
|
|
|
2.7
|
|
|
6.1
|
|
|
35.9
|
|
|
54.4
|
|
|
16.8
|
|
|
9.8
|
|
|
12.7
|
|
|
93.7
|
|
||||||||||
|
$
|
249.5
|
|
|
$
|
122.1
|
|
|
$
|
138.4
|
|
|
$
|
145.4
|
|
|
$
|
655.4
|
|
|
$
|
736.9
|
|
|
$
|
333.9
|
|
|
$
|
420.5
|
|
|
$
|
331.6
|
|
|
$
|
1,822.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||
|
Three Months Ended September 30, 2017
|
|
Nine Months Ended September 30, 2017
|
||||||||||||||||||||||||||||||||||||
|
Revlon
|
|
Elizabeth Arden
|
|
Portfolio
|
|
Fragrances
|
|
Total
|
|
Revlon
|
|
Elizabeth Arden
|
|
Portfolio
|
|
Fragrances
|
|
Total
|
||||||||||||||||||||
Geographic Area:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Net Sales
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
North America
|
$
|
116.8
|
|
|
$
|
37.0
|
|
|
$
|
81.5
|
|
|
$
|
108.6
|
|
|
$
|
343.9
|
|
|
$
|
411.9
|
|
|
$
|
99.6
|
|
|
$
|
248.4
|
|
|
$
|
242.5
|
|
|
1,002.4
|
|
|
EMEA*
|
59.7
|
|
|
40.6
|
|
|
52.5
|
|
|
38.1
|
|
|
190.9
|
|
|
170.0
|
|
|
124.5
|
|
|
148.9
|
|
|
102.0
|
|
|
545.4
|
|
||||||||||
Asia
|
30.2
|
|
|
16.6
|
|
|
2.0
|
|
|
3.0
|
|
|
51.8
|
|
|
81.9
|
|
|
53.7
|
|
|
7.1
|
|
|
11.3
|
|
|
154.0
|
|
||||||||||
Latin America*
|
23.4
|
|
|
3.5
|
|
|
8.2
|
|
|
4.1
|
|
|
39.2
|
|
|
62.4
|
|
|
7.9
|
|
|
23.5
|
|
|
11.9
|
|
|
105.7
|
|
||||||||||
Pacific*
|
24.4
|
|
|
7.1
|
|
|
3.7
|
|
|
5.5
|
|
|
40.7
|
|
|
61.6
|
|
|
15.9
|
|
|
10.0
|
|
|
12.1
|
|
|
99.6
|
|
||||||||||
|
$
|
254.5
|
|
|
$
|
104.8
|
|
|
$
|
147.9
|
|
|
$
|
159.3
|
|
|
$
|
666.5
|
|
|
$
|
787.8
|
|
|
$
|
301.6
|
|
|
$
|
437.9
|
|
|
$
|
379.8
|
|
|
$
|
1,907.1
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||||||||||
Classes of similar products:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Net sales:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Color cosmetics
|
$
|
216.4
|
|
|
33%
|
|
$
|
230.3
|
|
|
35%
|
|
$
|
631.1
|
|
|
35%
|
|
$
|
710.5
|
|
|
37%
|
Fragrance
|
191.7
|
|
|
29%
|
|
199.1
|
|
|
30%
|
|
448.5
|
|
|
25%
|
|
492.0
|
|
|
26%
|
||||
Hair care
|
129.6
|
|
|
20%
|
|
127.5
|
|
|
19%
|
|
391.0
|
|
|
21%
|
|
387.5
|
|
|
20%
|
||||
Beauty care
|
49.7
|
|
|
8%
|
|
57.6
|
|
|
9%
|
|
147.5
|
|
|
8%
|
|
161.1
|
|
|
8%
|
||||
Skin care
|
68.0
|
|
|
10%
|
|
52.0
|
|
|
8%
|
|
204.8
|
|
|
11%
|
|
156.0
|
|
|
8%
|
||||
|
$
|
655.4
|
|
|
|
|
$
|
666.5
|
|
|
|
|
$
|
1,822.9
|
|
|
|
|
$
|
1,907.1
|
|
|
|
|
September 30, 2018
|
|
December 31, 2017
|
||||||||
Long-lived assets, net:
|
|
|
|
|
|
|
|||||
United States
|
$
|
1,447.3
|
|
|
84%
|
|
$
|
1,480.1
|
|
|
83%
|
International
|
280.8
|
|
|
16%
|
|
295.6
|
|
|
17%
|
||
|
$
|
1,728.1
|
|
|
|
$
|
1,775.7
|
|
|
|
|
Three months ended September 30,
|
|
Nine months ended September 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Numerator:
|
|
|
|
|
|
|
|
||||||||
Loss from continuing operations, net of taxes
|
$
|
(10.7
|
)
|
|
$
|
(32.8
|
)
|
|
$
|
(223.8
|
)
|
|
$
|
(107.6
|
)
|
(Loss) income from discontinued operations, net of taxes
|
(0.4
|
)
|
|
0.4
|
|
|
(0.1
|
)
|
|
1.3
|
|
||||
Net loss
|
$
|
(11.1
|
)
|
|
$
|
(32.4
|
)
|
|
$
|
(223.9
|
)
|
|
$
|
(106.3
|
)
|
Denominator:
|
|
|
|
|
|
|
|
||||||||
Weighted-average common shares outstanding – Basic
|
52,834,879
|
|
|
52,615,412
|
|
|
52,777,883
|
|
|
52,584,954
|
|
||||
Effect of dilutive restricted stock
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Weighted-average common shares outstanding – Diluted
|
52,834,879
|
|
|
52,615,412
|
|
|
52,777,883
|
|
|
52,584,954
|
|
||||
Basic (loss) earnings per common share:
|
|
|
|
|
|
|
|
||||||||
Continuing operations
|
$
|
(0.20
|
)
|
|
$
|
(0.62
|
)
|
|
$
|
(4.24
|
)
|
|
$
|
(2.04
|
)
|
Discontinued operations
|
(0.01
|
)
|
|
0.01
|
|
|
—
|
|
|
0.02
|
|
||||
Net loss per common share
|
$
|
(0.21
|
)
|
|
$
|
(0.61
|
)
|
|
$
|
(4.24
|
)
|
|
$
|
(2.02
|
)
|
Diluted (loss) earnings per common share:
|
|
|
|
|
|
|
|
|
|||||||
Continuing operations
|
$
|
(0.20
|
)
|
|
$
|
(0.62
|
)
|
|
$
|
(4.24
|
)
|
|
$
|
(2.04
|
)
|
Discontinued operations
|
(0.01
|
)
|
|
0.01
|
|
|
—
|
|
|
0.02
|
|
||||
Net loss per common share
|
$
|
(0.21
|
)
|
|
$
|
(0.61
|
)
|
|
$
|
(4.24
|
)
|
|
$
|
(2.02
|
)
|
|
|
|
|
|
|
|
|
||||||||
Unvested restricted stock and restricted stock unit awards under the Stock Plan
(a)
|
197,667
|
|
|
19,506
|
|
|
165,961
|
|
|
19,486
|
|
(a)
|
These are outstanding common stock equivalents that were not included in the computation of diluted earnings per common share because their inclusion would have had an anti-dilutive effect.
|
|
Time-Based RSUs
|
|
Weighted-Average Grant Date Fair Value per RSU
|
||
2018
|
405,505
|
|
|
19.05
|
|
2017
|
162,947
|
|
|
19.70
|
|
|
Performance-Based RSUs
|
|
Weighted-Average Grant Date Fair Value per RSU
|
||
2018
|
405,505
|
|
|
19.05
|
|
2017
|
162,947
|
|
|
19.70
|
|
•
|
Optimizing Global Supply Chain
: Realizing manufacturing efficiencies and rationalizing the Company's global warehouse network and office locations to drive greater efficiency, lower its cost base and enhance the Company's speed-to-market capabilities for new innovations;
|
•
|
Enhancing In-Market Execution
: Optimizing the Company's commercial and organizational structures to create more efficient global and regional capabilities;
|
•
|
Reducing Overhead Costs and Streamlining Functions:
Streamlining functions and workflows by leveraging technology and shared services and standardizing and simplifying the Company's business processes, leading to greater agility and faster decision-making.
|
•
|
a
$27.9 million
increase in the benefit from income taxes, primarily due to: (i) increased loss from continuing operations; (ii) the mix and level of earnings; and (iii) the net impact of changes resulting from the enactment of the Tax Cuts and Jobs Act of 2017 (the “Tax Act”), including (a) the reduction of the U.S. federal income tax rate (which provided for less of a benefit on the Company’s year-to-date loss), (b) the U.S. tax on the Company’s foreign earnings under the GILTI provisions of the Tax Act (adjusted to account for new interpretive regulations issued by the IRS in the third quarter of 2018 (the "New IRS Regs")), (c) the limitation on interest deductions (which resulted in a deferred deduction on which the Company has a full valuation allowance) and (d) a reduced deduction for executive compensation under Section 162(m) of the Internal Revenue Code ("Section 162(m)");
|
•
|
$21.5 million
of lower selling, general and administrative ("SG&A") expenses, primarily driven by lower brand support expenses driven by the re-phasing of certain marketing initiatives, lower general and administrative expenses and favorable foreign currency translation, partially offset by higher costs related to product displays, higher severance due to changes in senior executive management and higher distribution costs due to geographic mix; and
|
•
|
a
$9.3 million
decline in acquisition and integration costs;
|
•
|
$25.6 million
of lower gross profit, primarily due to higher cost of sales as a result of increased manufacturing costs and obsolescence;
|
•
|
a
$7.8 million
increase in interest expense, primarily due to higher average interest rates and higher debt balances resulting from the Asset-Based Term Facility, as defined herein, entered into during the third quarter of 2018, as well as higher borrowings under the 2016 Revolving Credit Facility; and
|
•
|
$4.2 million
of unfavorable variance in foreign currency, resulting from
$1.1 million
in foreign currency losses during the
third quarter
of
2018
, as compared to
$3.1 million
of foreign currency gains during the
third quarter
of
2017
.
|
•
|
$67.0 million
of lower gross profit, primarily due to lower net sales;
|
•
|
$27.5 million
of unfavorable variance in foreign currency, resulting from
$10.7 million
in foreign currency losses during
the first nine months
of
2018
, compared to
$16.8 million
in foreign currency gains during
the first nine months
of
2017
;
|
•
|
a
$20.1 million
loss, of which $18.6 million was non-cash, related to the write-off of the Company’s minority investment in a licensee after agreeing to wind-down the contract and revert the trademark rights to the Company following a brief transition period;
|
•
|
a
$18.8 million
increase in interest expense, primarily due to higher average interest rates and higher debt balances resulting from the Asset-Based Term Facility entered into during the third quarter of 2018, as well as higher borrowings under the 2016 Revolving Credit Facility; and
|
•
|
$12.6 million
of higher SG&A expenses, primarily driven by unfavorable currency translation, higher costs related to product displays, higher severance due to changes in senior executive management and higher distribution costs due to geographic mix, partially offset by lower brand support expenses, lower recurring expenses and lower incentive compensation;
|
•
|
a
$28.2 million
decrease in acquisition and integration costs; and
|
•
|
a
$5.3 million
increase in the benefit from income taxes, primarily due to: (i) increased loss from continuing operations; (ii) the mix and level of earnings; and (iii) the net impact of changes resulting from the enactment of the Tax Act, including (a) the reduction of the U.S. federal income tax rate (which provided for less of a benefit on the Company’s year-to-date loss), (b) the U.S. tax on the Company’s foreign earnings under the GILTI provisions of the Tax Act (adjusted to account for the New IRS Regs), (c) the limitation on interest deductions (which resulted in a deferred deduction on which the Company has a full valuation allowance) and (d) a reduced deduction for executive compensation under Section 162(m), partially offset by a reduction in the liability that had been established in prior periods pursuant to Accounting Principles Board 23, "Indefinite Reinvestment Assertion" ("APB 23").
|
•
|
Revlon
- The Revlon segment is comprised of the Company's flagship Revlon brands. Revlon segment products are primarily marketed, distributed and sold in the mass retail channel, large volume retailers, chain drug and food stores, chemist shops, hypermarkets, general merchandise stores, e-commerce sites, television shopping, department stores, professional hair and nail salons, one-stop shopping beauty retailers, specialty cosmetic stores and perfumeries in the U.S. and internationally under brands such as
Revlon
in color cosmetics;
Revlon ColorSilk
and
Revlon Professional
in hair color;
Revlon
in beauty tools; and
Revlon
in nail color.
|
•
|
Elizabeth Arden
- The Elizabeth Arden segment is comprised of the Company's Elizabeth Arden branded products. The Elizabeth Arden segment markets, distributes and sells fragrances, skin care and color cosmetics primarily to prestige retailers, department and specialty stores, perfumeries, boutiques, e-commerce sites, the mass retail channel, travel retailers and distributors, as well as direct sales to consumers via its Elizabeth Arden branded retail stores and ElizabethArden.com e-commerce business under brands such as
Elizabeth Arden Ceramide, Prevage, Eight Hour, SUPERSTART, Visible Difference
and
Skin Illuminating
in the Elizabeth Arden skin care brands; and
Elizabeth Arden White Tea, Elizabeth Arden Red Door, Elizabeth Arden 5th Avenue
and
Elizabeth Arden Green Tea
in Elizabeth Arden fragrances.
|
•
|
Portfolio
- The Company’s Portfolio segment markets, distributes and sells a comprehensive line of premium, specialty and mass products primarily to the mass retail channel, hair and nail salons and professional salon distributors in the U.S. and internationally and large volume retailers, specialty and department stores under brands such as
Almay
and
SinfulColors
in color cosmetics;
CND
in nail polishes and nail enhancements, including
CND Shellac
and
CND Vinylux
nail polishes;
Cutex
in nail care products;
Pure Ice
in nail polishes;
American Crew
in men’s grooming products; and
Mitchum
in anti-perspirant deodorants. The Portfolio segment also includes a multi-cultural hair care line consisting of
Creme of Nature
hair care products, which are sold in both professional salons and in large volume retailers and other retailers, primarily in the U.S.; and a body care line under the
Natural Honey
brand and hair color
|
•
|
Fragrances
- The Fragrances segment includes the development, marketing and distribution of certain owned and licensed fragrances, as well as the distribution of prestige fragrance brands owned by third parties. These products are typically sold to retailers in the U.S. and internationally, including prestige retailers, specialty stores, e-commerce sites, the mass retail channel, travel retailers and other international retailers. The owned and licensed fragrances include brands such as
Juicy Couture, John Varvatos, All Saints, La Perla, Wildfox, Charlie, Curve, Elizabeth Taylor
,
Britney Spears
,
Christina Aguilera
,
Shawn
Mendes
,
Halston,
Ed Hardy
,
Geoffrey Beene
,
Alfred Sung
,
Giorgio Beverly Hills
,
Lucky Brand
,
Paul Sebastian
,
White Shoulders
and
Jennifer Aniston
.
|
|
Net Sales
|
|
Segment Profit
|
||||||||||||||||||||||||||||||||||||||||
|
Three Months Ended September 30,
|
|
Change
|
|
XFX Change
(a)
|
|
Three Months Ended September 30,
|
|
Change
|
|
XFX Change
(a)
|
||||||||||||||||||||||||||||||||
|
2018
|
|
2017
|
|
$
|
|
%
|
|
$
|
|
%
|
|
2018
|
|
2017
|
|
$
|
|
%
|
|
$
|
|
%
|
||||||||||||||||||||
Revlon
|
$
|
249.5
|
|
|
$
|
254.5
|
|
|
$
|
(5.0
|
)
|
|
(2.0
|
)%
|
|
$
|
0.1
|
|
|
—
|
%
|
|
$
|
36.8
|
|
|
$
|
22.4
|
|
|
$
|
14.4
|
|
|
64.3
|
%
|
|
$
|
15.2
|
|
|
67.9
|
%
|
Elizabeth Arden
|
122.1
|
|
|
104.8
|
|
|
17.3
|
|
|
16.5
|
%
|
|
19.4
|
|
|
18.5
|
%
|
|
6.6
|
|
|
1.6
|
|
|
5.0
|
|
|
N.M.
|
|
|
5.6
|
|
|
N.M.
|
|
||||||||
Portfolio
|
138.4
|
|
|
147.9
|
|
|
(9.5
|
)
|
|
(6.4
|
)%
|
|
(6.7
|
)
|
|
(4.5
|
)%
|
|
2.1
|
|
|
7.7
|
|
|
(5.6
|
)
|
|
(72.7
|
)%
|
|
(5.6
|
)
|
|
(72.7
|
)%
|
||||||||
Fragrance
|
145.4
|
|
|
159.3
|
|
|
(13.9
|
)
|
|
(8.7
|
)%
|
|
(12.3
|
)
|
|
(7.7
|
)%
|
|
26.9
|
|
|
22.0
|
|
|
4.9
|
|
|
22.3
|
%
|
|
5.2
|
|
|
23.6
|
%
|
||||||||
Total
|
$
|
655.4
|
|
|
$
|
666.5
|
|
|
$
|
(11.1
|
)
|
|
(1.7
|
)%
|
|
$
|
0.5
|
|
|
0.1
|
%
|
|
$
|
72.4
|
|
|
$
|
53.7
|
|
|
$
|
18.7
|
|
|
34.8
|
%
|
|
$
|
20.4
|
|
|
38.0
|
%
|
|
Net Sales
|
|
Segment Profit
|
||||||||||||||||||||||||||||||||||||||||
|
Nine Months Ended September 30,
|
|
Change
|
|
XFX Change
(a)
|
|
Nine Months Ended September 30,
|
|
Change
|
|
XFX Change
(a)
|
||||||||||||||||||||||||||||||||
|
2018
|
|
2017
|
|
$
|
|
%
|
|
$
|
|
%
|
|
2018
|
|
2017
|
|
$
|
|
%
|
|
$
|
|
%
|
||||||||||||||||||||
Revlon
|
$
|
736.9
|
|
|
$
|
787.8
|
|
|
$
|
(50.9
|
)
|
|
(6.5
|
)%
|
|
$
|
(56.3
|
)
|
|
(7.1
|
)%
|
|
$
|
75.6
|
|
|
$
|
98.1
|
|
|
$
|
(22.5
|
)
|
|
(22.9
|
)%
|
|
$
|
(22.2
|
)
|
|
(22.6
|
)%
|
Elizabeth Arden
|
333.9
|
|
|
301.6
|
|
|
32.3
|
|
|
10.7
|
%
|
|
26.2
|
|
|
8.7
|
%
|
|
2.3
|
|
|
2.3
|
|
|
—
|
|
|
—
|
%
|
|
—
|
|
|
—
|
%
|
||||||||
Portfolio
|
420.5
|
|
|
437.9
|
|
|
(17.4
|
)
|
|
(4.0
|
)%
|
|
(20.1
|
)
|
|
(4.6
|
)%
|
|
(5.8
|
)
|
|
7.7
|
|
|
(13.5
|
)
|
|
(175.3
|
)%
|
|
(13.9
|
)
|
|
(180.5
|
)%
|
||||||||
Fragrance
|
331.6
|
|
|
379.8
|
|
|
(48.2
|
)
|
|
(12.7
|
)%
|
|
(50.6
|
)
|
|
(13.3
|
)%
|
|
41.2
|
|
|
38.7
|
|
|
2.5
|
|
|
6.5
|
%
|
|
2.6
|
|
|
6.7
|
%
|
||||||||
Total
|
$
|
1,822.9
|
|
|
$
|
1,907.1
|
|
|
$
|
(84.2
|
)
|
|
(4.4
|
)%
|
|
$
|
(100.8
|
)
|
|
(5.3
|
)%
|
|
$
|
113.3
|
|
|
$
|
146.8
|
|
|
$
|
(33.5
|
)
|
|
(22.8
|
)%
|
|
$
|
(33.5
|
)
|
|
(22.8
|
)%
|
|
Three Months Ended September 30,
|
|
Change
|
|
XFX Change
(a)
|
||||||||||||||||
|
2018
|
|
2017
|
|
$
|
|
%
|
|
$
|
|
%
|
||||||||||
Revlon
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
North America
|
$
|
123.1
|
|
|
$
|
116.8
|
|
|
$
|
6.3
|
|
|
5.4
|
%
|
|
$
|
6.8
|
|
|
5.8
|
%
|
International
|
126.4
|
|
|
137.7
|
|
|
(11.3
|
)
|
|
(8.2
|
)%
|
|
(6.7
|
)
|
|
(4.9
|
)%
|
||||
Elizabeth Arden
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
North America
|
$
|
40.3
|
|
|
$
|
37.0
|
|
|
$
|
3.3
|
|
|
8.9
|
%
|
|
$
|
3.8
|
|
|
10.3
|
%
|
International
|
81.8
|
|
|
67.8
|
|
|
14.0
|
|
|
20.6
|
%
|
|
15.6
|
|
|
23.0
|
%
|
||||
Portfolio
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
North America
|
$
|
88.1
|
|
|
$
|
81.5
|
|
|
$
|
6.6
|
|
|
8.1
|
%
|
|
$
|
6.9
|
|
|
8.5
|
%
|
International
|
50.3
|
|
|
66.4
|
|
|
(16.1
|
)
|
|
(24.2
|
)%
|
|
(13.6
|
)
|
|
(20.5
|
)%
|
||||
Fragrance
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
North America
|
$
|
99.3
|
|
|
$
|
108.6
|
|
|
$
|
(9.3
|
)
|
|
(8.6
|
)%
|
|
$
|
(9.0
|
)
|
|
(8.3
|
)%
|
International
|
46.1
|
|
|
50.7
|
|
|
(4.6
|
)
|
|
(9.1
|
)%
|
|
(3.3
|
)
|
|
(6.5
|
)%
|
||||
Total Net Sales
|
$
|
655.4
|
|
|
$
|
666.5
|
|
|
$
|
(11.1
|
)
|
|
(1.7
|
)%
|
|
$
|
0.5
|
|
|
0.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Nine Months Ended September 30,
|
|
Change
|
|
XFX Change
(a)
|
||||||||||||||||
|
2018
|
|
2017
|
|
$
|
|
%
|
|
$
|
|
%
|
||||||||||
Revlon
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
North America
|
$
|
388.2
|
|
|
$
|
411.9
|
|
|
$
|
(23.7
|
)
|
|
(5.8
|
)%
|
|
$
|
(24.0
|
)
|
|
(5.8
|
)%
|
International
|
348.7
|
|
|
375.9
|
|
|
(27.2
|
)
|
|
(7.2
|
)%
|
|
(32.3
|
)
|
|
(8.6
|
)%
|
||||
Elizabeth Arden
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
North America
|
$
|
96.2
|
|
|
$
|
99.6
|
|
|
$
|
(3.4
|
)
|
|
(3.4
|
)%
|
|
$
|
(3.5
|
)
|
|
(3.5
|
)%
|
International
|
237.7
|
|
|
202.0
|
|
|
35.7
|
|
|
17.7
|
%
|
|
29.7
|
|
|
14.7
|
%
|
||||
Portfolio
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
North America
|
$
|
264.8
|
|
|
$
|
248.4
|
|
|
$
|
16.4
|
|
|
6.6
|
%
|
|
$
|
16.2
|
|
|
6.5
|
%
|
International
|
155.7
|
|
|
189.5
|
|
|
(33.8
|
)
|
|
(17.8
|
)%
|
|
(36.3
|
)
|
|
(19.2
|
)%
|
||||
Fragrance
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
North America
|
$
|
216.9
|
|
|
$
|
242.5
|
|
|
$
|
(25.6
|
)
|
|
(10.6
|
)%
|
|
$
|
(25.5
|
)
|
|
(10.5
|
)%
|
International
|
114.7
|
|
|
137.3
|
|
|
(22.6
|
)
|
|
(16.5
|
)%
|
|
(25.1
|
)
|
|
(18.3
|
)%
|
||||
Total Net Sales
|
$
|
1,822.9
|
|
|
$
|
1,907.1
|
|
|
$
|
(84.2
|
)
|
|
(4.4
|
)%
|
|
$
|
(100.8
|
)
|
|
(5.3
|
)%
|
|
Three Months Ended September 30,
|
|
|
|
Nine Months Ended September 30,
|
|
|
||||||||||||||||
|
2018
|
|
2017
|
|
Change
|
|
2018
|
|
2017
|
|
Change
|
||||||||||||
Gross profit
|
$
|
350.4
|
|
|
$
|
376.0
|
|
|
$
|
(25.6
|
)
|
|
$
|
1,015.7
|
|
|
$
|
1,082.7
|
|
|
$
|
(67.0
|
)
|
Percentage of net sales
|
53.5
|
%
|
|
56.4
|
%
|
|
(2.9
|
)%
|
|
55.7
|
%
|
|
56.8
|
%
|
|
(1.1
|
)%
|
•
|
the impact of additional costs related to the service level disruptions at the Company's Oxford, N.C. manufacturing facility, which decreased gross margin by 4.4 percentage points;
|
•
|
higher inventory obsolescence reserves, which decreased gross margin by 2.2 percentage points;
|
•
|
unfavorable foreign currency fluctuations, which decreased gross margin by 2.0 percentage points; and
|
•
|
higher manufacturing costs, which decreased gross margin by 1.3 percentage points;
|
•
|
lower sales returns reserves, which increased gross margin by 3.4 percentage points;
|
•
|
cost reductions associated with insourcing production capabilities, which increased gross margin by 2.3 percentage points; and
|
•
|
additional inventory costs in the third quarter of 2017 related to the increase in the fair value of inventory acquired in the Elizabeth Arden Acquisition, that did not recur in the third quarter of 2018, resulting in an increase in gross margin of 1.1 percentage points.
|
•
|
the impact of additional costs related to the service level disruptions at the Company's Oxford, N.C. manufacturing facility, which decreased gross margin by 10.2 percentage points;
|
•
|
higher inventory obsolescence reserves, which decreased gross margin by 4.0 percentage points;
|
•
|
higher sales allowances, which decreased gross margin by 1.2 percentage points; and
|
•
|
unfavorable product mix, which increased gross margin by 0.9 percentage points;
|
•
|
cost reductions associated with insourcing production capabilities, which increased gross margin by 4.9 percentage points;
|
•
|
additional inventory costs in the first nine months of 2017 related to the increase in the fair value of inventory acquired in the Elizabeth Arden Acquisition, that did not recur in the first nine months of 2018, resulting in an increase in gross margin of 3.5 percentage points;
|
|
Three Months Ended September 30,
|
|
|
|
Nine Months Ended September 30,
|
|
|
||||||||||||||||
|
2018
|
|
2017
|
|
Change
|
|
2018
|
|
2017
|
|
Change
|
||||||||||||
SG&A expenses
|
$
|
340.8
|
|
|
$
|
362.3
|
|
|
$
|
(21.5
|
)
|
|
$
|
1,087.1
|
|
|
$
|
1,074.5
|
|
|
$
|
12.6
|
|
•
|
a $28.8 million decrease in brand support expenses driven by the re-phasing of certain marketing initiatives, primarily within the Revlon segment; and
|
•
|
$4.8 million of favorable FX impacts;
|
•
|
higher general and administrative expenses of approximately $3.5 million, primarily driven by higher incentive compensation, mainly due to timing, and higher severance costs, partially offset by lower travel expenses;
|
•
|
higher product display costs, primarily within the Revlon segment; and
|
•
|
higher distribution costs, primarily due to geographic mix.
|
•
|
$12.7 million of unfavorable FX impacts;
|
•
|
higher general and administrative expenses of approximately $11 million, primarily driven by higher severance costs and higher professional fees, partially offset by lower travel expenses and lower incentive compensation;
|
•
|
higher product display costs, primarily within the Revlon segment; and
|
•
|
higher distribution costs, primarily due to geographic mix;
|
•
|
a $29.3 million decrease in brand support expenses driven by the re-phasing of certain marketing initiatives, primarily within the Revlon segment.
|
|
Three Months Ended September 30,
|
|
|
|
Nine Months Ended September 30,
|
|
|
||||||||||||||||
|
2018
|
|
2017
|
|
Change
|
|
2018
|
|
2017
|
|
Change
|
||||||||||||
Acquisition Costs
|
$
|
—
|
|
|
$
|
0.8
|
|
|
$
|
(0.8
|
)
|
|
$
|
0.1
|
|
|
$
|
2.8
|
|
|
$
|
(2.7
|
)
|
Integration Costs
|
3.4
|
|
|
11.9
|
|
|
(8.5
|
)
|
|
11.9
|
|
|
37.4
|
|
|
(25.5
|
)
|
||||||
Total acquisition and integration costs
|
$
|
3.4
|
|
|
$
|
12.7
|
|
|
$
|
(9.3
|
)
|
|
$
|
12.0
|
|
|
$
|
40.2
|
|
|
$
|
(28.2
|
)
|
|
Three Months Ended September 30,
|
|
|
|
Nine Months Ended September 30,
|
|
|
||||||||||||||||
|
2018
|
|
2017
|
|
Change
|
|
2018
|
|
2017
|
|
Change
|
||||||||||||
Restructuring charges and other, net
|
$
|
3.9
|
|
|
$
|
6.4
|
|
|
$
|
(2.5
|
)
|
|
$
|
13.9
|
|
|
$
|
11.3
|
|
|
$
|
2.6
|
|
|
Three Months Ended September 30,
|
|
|
|
Nine Months Ended September 30,
|
|
|
||||||||||||||||
|
2018
|
|
2017
|
|
Change
|
|
2018
|
|
2017
|
|
Change
|
||||||||||||
Loss on disposal of minority investment
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
20.1
|
|
|
$
|
—
|
|
|
$
|
20.1
|
|
|
Three Months Ended September 30,
|
|
|
|
Nine Months Ended September 30,
|
|
|
||||||||||||||||
|
2018
|
|
2017
|
|
Change
|
|
2018
|
|
2017
|
|
Change
|
||||||||||||
Interest expense
|
$
|
46.4
|
|
|
$
|
38.6
|
|
|
$
|
7.8
|
|
|
$
|
129.1
|
|
|
$
|
110.3
|
|
|
$
|
18.8
|
|
|
Three Months Ended September 30,
|
|
|
|
Nine Months Ended September 30,
|
|
|
||||||||||||||||
|
2018
|
|
2017
|
|
Change
|
|
2018
|
|
2017
|
|
Change
|
||||||||||||
Foreign currency losses (gains), net
|
$
|
1.1
|
|
|
$
|
(3.1
|
)
|
|
$
|
4.2
|
|
|
$
|
10.7
|
|
|
$
|
(16.8
|
)
|
|
$
|
27.5
|
|
|
Three Months Ended September 30,
|
|
|
|
Nine Months Ended September 30,
|
|
|
||||||||||||||||
|
2018
|
|
2017
|
|
Change
|
|
2018
|
|
2017
|
|
Change
|
||||||||||||
Benefit from income taxes
|
$
|
(38.7
|
)
|
|
$
|
(10.8
|
)
|
|
$
|
(27.9
|
)
|
|
$
|
(43.1
|
)
|
|
$
|
(37.8
|
)
|
|
$
|
(5.3
|
)
|
|
Nine Months Ended September 30,
|
||||||
|
2018
|
|
2017
|
||||
Net cash used in operating activities
|
$
|
(296.7
|
)
|
|
$
|
(274.2
|
)
|
Net cash used in investing activities
|
(41.6
|
)
|
|
(69.5
|
)
|
||
Net cash provided by financing activities
|
316.6
|
|
|
226.7
|
|
||
Effect of exchange rate changes on cash and cash equivalents
|
(3.2
|
)
|
|
9.4
|
|
||
Net decrease in cash, cash equivalents and restricted cash
|
(24.9
|
)
|
|
(107.6
|
)
|
||
Cash, cash equivalents and restricted cash at beginning of period
|
87.4
|
|
|
186.8
|
|
||
Cash, cash equivalents and restricted cash at end of period
|
$
|
62.5
|
|
|
$
|
79.2
|
|
•
|
$251.3 million
of borrowings under the 2016 Revolving Credit Facility; and
|
•
|
$89.4 million
of borrowings under the Asset-Based Term Facility;
|
•
|
$13.5 million
of repayments under the 2016 Term Loan Facility.
|
•
|
$243.9 million of borrowings under the 2016 Revolving Credit Facility;
|
•
|
$13.5 million of repayments under the 2016 Term Loan Facility.
|
|
Commitment
|
|
Borrowing Base
|
|
Aggregate principal amount outstanding at September 30, 2018
|
|
Availability at September 30, 2018
|
||||||||
Tranche A of the 2016 Revolving Credit Facility
|
$
|
400.0
|
|
|
$
|
433.8
|
|
|
$
|
366.8
|
|
|
(a)N/A
|
|
|
Tranche B of the 2016 Revolving Credit Facility
|
41.5
|
|
|
44.3
|
|
|
41.5
|
|
|
N/A
|
|
||||
Total Tranche A& B of the 2016 Revolving Credit Facility
(a)
|
441.5
|
|
|
478.1
|
|
|
408.3
|
|
|
$
|
1.0
|
|
|||
2018 Senior Line of Credit Facility
|
50.0
|
|
|
N/A
|
|
|
11.0
|
|
|
39.0
|
|
|
|
Payments Due by Period
|
||||||||||||||||||
Contractual Obligations
|
|
Total
|
|
Less than 1 year
|
|
1-3 years
|
|
4-5 years
|
|
After 5 years
|
||||||||||
Long-term debt, including current portion
|
|
$
|
3,212.2
|
|
|
$
|
412.8
|
|
|
$
|
36.2
|
|
|
$
|
625.6
|
|
|
$
|
2,137.6
|
|
Interest on long-term debt
|
|
822.4
|
|
|
41.5
|
|
|
369.0
|
|
|
287.6
|
|
|
124.3
|
|
(i)
|
the Company's future financial performance and/or sales growth;
|
(ii)
|
the effect on sales of decreased consumer spending in response to weak economic conditions or weakness in the consumption of beauty care products in one or more of the Company's segments; adverse changes in foreign currency exchange rates, foreign currency controls and/or government-mandated pricing controls; 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, whether due to shortages of raw materials or otherwise, changes in consumer purchasing habits, including with respect to retailer preferences and/or among sales channels, such as due to the consumption declines in core beauty categories in the mass retail channel in North America; inventory management by the Company's customers; inventory de-stocking by certain retail customers; space reconfigurations or reductions in display space by the Company's customers; retail store closures in the brick-and-mortar channels where the Company sells its products, as consumers continue to shift purchases to online and e-commerce channels; changes in pricing, marketing, advertising and/or promotional strategies by the Company's customers; less than anticipated results from the Company’s existing or new products or from its advertising, promotional, pricing and/or marketing plans; or if the Company’s expenses, including, without limitation, for pension expense under its benefit plans, acquisition and acquisition-related integration costs, capital expenditures, costs related to the Company’s synergy and integration programs in connection with the Elizabeth Arden Acquisition, restructuring and severance costs, costs related to litigation, advertising, promotional and marketing activities, or for sales returns related to any reduction of space by the Company's customers, product discontinuances or otherwise, exceed the anticipated level of expenses;
|
(iii)
|
the Company's belief that continuing to execute its business initiatives could include taking advantage of additional opportunities to reposition, repackage or reformulate one or more brands or product lines, launching additional new products, acquiring businesses or brands (including through licensing transactions, if any), divesting or discontinuing non-core business lines (which may include exiting certain territories), further refining its approach to retail merchandising and/or taking further actions to optimize its manufacturing, sourcing and organizational size and structure, including optimizing the Elizabeth Arden Acquisition, any of which, the intended purpose would be to create value through improving the Company's financial performance, could result in the Company making investments and/or recognizing charges related to executing against such opportunities, which activities may be funded with operating revenues, cash on hand, funds available under the 2016 Revolving Credit Facility, the 2018 Senior Line of Credit Facility and/or other permitted additional sources of capital, which actions could increase the Company's total debt;
|
(iv)
|
certain beliefs and expectations regarding the Company's progress in resolving customer service level disruptions resulting from the launch of its new ERP system;
|
(v)
|
the effect of restructuring activities, restructuring costs and charges, the timing of restructuring payments and the benefits from such activities, including, without limitation: (A) in connection with implementing the EA Integration Restructuring Program: (1) consolidating offices, eliminating certain duplicative activities and streamlining back-office support (which are designed to reduce the Company's SG&A expenses); and (2) recognizing approximately
$90 million
to
$95 million
of the EA Integration Restructuring Charges (all of which are expected to be cash payments), consisting of: (x) approximately
$70 million
to
$75 million
of employee-related costs, including severance, retention and other contractual termination benefits; (y) approximately
$10 million
of lease termination costs; and (z) approximately
$10 million
of other related charges; (B) the Company’s plans to initiate a new 2018 Optimization Program designed to streamline the Company’s operations, reporting structures and business processes, with the objective of maximizing productivity and improving profitability, cash flows and liquidity, with the major initiatives underlying such program including: (1) optimizing its global supply chain and realizing manufacturing efficiencies and rationalizing its global warehouse network and office locations to drive greater efficiency, lower its cost base and enhance its speed-to-market capabilities for new innovations; (2) enhancing in-market execution and optimizing its commercial and organizational structures to create more efficient global and regional capabilities; and (3) reducing overhead costs and streamlining functions and workflows by leveraging technology and shared services and standardizing and simplifying its business processes, leading to greater agility and faster decision-making; (C) the Company’s expectations regarding the amount and timing of the charges and payments related to the 2018 Optimization Program, including that: (1) it will recognize approximately $30 million to $40 million of total pre-tax restructuring and related charges, consisting of employee-related costs, such as severance, pension and other termination costs, as well as related third party expenses; (2) it will incur approximately $10 million of additional capital expenditures; (3) of the restructuring charges, it will record in the fourth quarter of 2018 an estimated pre-tax restructuring charge of approximately $8 million to $10 million, with the balance to be recognized in 2019; and (4) approximately 85% of the restructuring charges are to be paid in cash, with approximately $6 million to $8 million expected to be paid in 2018 and $20 million to $26 million in 2019; (D) the Company’s expectation that the actions to be implemented under the 2018 Optimization Program will be substantially completed by December 31, 2019; (E) the Company’s projection that the 2018 Optimization Program will result in annualized cost reductions in the range of approximately $125 million to $150 million by the end of 2019;
|
(vi)
|
the Company’s expectation that operating revenues, cash on hand (including, without limitation, cash provided by the Asset-Based Term Facility) and funds that may be available from time to time for borrowing under Products Corporation's 2016 Revolving Credit Facility, the 2018 Senior Line of Credit Facility and other permitted lines of credit will be sufficient to enable the Company to cover its operating expenses for 2018, including the cash requirements referred to in item (viii) below, and the Company's belief that (a) the cash generated by its domestic operations, cash on hand, availability under the 2016 Revolving Credit Facility, the 2018 Senior Line of Credit Facility and other permitted lines of credit, as well as the option to further settle intercompany loans and payables with certain foreign subsidiaries, should be sufficient to meet its domestic liquidity needs for at least the next 12 months and (b) restrictions and/or taxes on repatriation of foreign earnings will not have a material effect on the Company's liquidity during such period;
|
(vii)
|
the Company’s expected principal sources of funds, including operating revenues, cash on hand and funds available for borrowing under Products Corporation's 2016 Revolving Credit Facility, the 2018 Senior Line of Credit Facility and other permitted lines of credit, as well as the availability of funds from the Company taking certain measures, including, among other things, reducing discretionary spending;
|
(viii)
|
the Company's expected principal uses of funds, including amounts required for payments in connection with the Company’s synergy and integration programs related to the Elizabeth Arden Acquisition (including, without limitation, for the EA Integration Restructuring Program); payments in connection with the Company's purchases of permanent wall displays; capital expenditure requirements; debt service payments and costs; cash tax payments; pension and other post-retirement benefit plan contributions; payments in connection with the Company's restructuring programs; severance not otherwise included in the Company’s restructuring programs; business and/or brand acquisitions (including, without limitation, through licensing transactions, if any); debt and/or equity repurchases, if any; costs related to litigation; and payments in connection with discontinuing non-core business lines and/or exiting and/or entering certain territories and/or channels of trade (including, without limitation, that the Company may also, from time-to-time, seek to retire or purchase its outstanding debt obligations and/or equity in open market purchases, block trades, privately negotiated purchase transactions or otherwise and may seek to refinance some or all of its indebtedness based upon market conditions and that any such retirement or purchase of debt and/or equity may be funded with operating cash flows of the business or other sources and will depend upon prevailing market conditions, liquidity requirements, contractual restrictions and other factors, and the amounts involved may be material); and its estimates of the amount and timing of such operating and other expenses;
|
(ix)
|
matters concerning the impact on the Company from changes in interest rates and foreign exchange rates;
|
(x)
|
the Company's expectation to efficiently manage its working capital, including, among other things, initiatives intended to optimize inventory levels over time; centralized procurement to secure discounts and efficiencies; prudent management of trade receivables, accounts payable and controls on general and administrative spending; the effects of service level disruptions to the Company’s manufacturing operations as a result of the launch of its new ERP system and actions that the Company is taking to implement a service recovery plan; and the Company’s belief that in the ordinary course of business, its source or use of cash from operating activities may vary on a quarterly basis as a result of a number of factors, including the timing of working capital flows;
|
(xi)
|
the Company’s expectations regarding its future net periodic benefit cost for its U.S. and international defined benefit plans;
|
(xii)
|
the Company's expectation that its tax provision and effective tax rate in any individual quarter and year-to-date period will vary and may not be indicative of the Company's tax provision and effective tax rate for the full year and, with respect to the Tax Act, the Company’s expectation that it will not have a transition tax liability due to its deficit in foreign earnings as of the applicable measurement dates, that the Tax Act’s limitation on interest deductibility will not impact the Company’s 2018 federal cash taxes due to its net operating loss position, and that the Tax Act will not have a material impact on its cash taxes or liquidity in 2018, as well as the Company's expectations regarding whether it will be required to establish additional valuation allowances on its deferred tax assets;
|
(xiii)
|
the Company's belief that the allegations contained in the Third Consolidated Amended Class Action Complaint are without merit and its plans to continue to vigorously defend against them and its belief that the outcome of all pending legal proceedings in the aggregate is not reasonably likely to have a material adverse effect on the Company’s business, prospects, results of operations, financial condition and/or cash flows, but that in light of the uncertainties involved in legal proceedings generally, the ultimate outcome of a particular matter could be material to the Company’s operating results for a particular period depending on, among other things, the size of the loss or the nature of the liability imposed and the level of the Company’s income for that particular period;
|
(xiv)
|
certain estimates used by management in estimating the fair value of the assets acquired in the Elizabeth Arden Acquisition and in valuing other assets and liabilities; and
|
(xv)
|
the Company's expected benefits and other impacts from the Elizabeth Arden Acquisition.
|
(i)
|
unanticipated circumstances or results affecting the Company's financial performance and or sales growth, including: 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; the Company’s inability to address the pace and impact of the 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; the Company’s inability to drive a successful long-term omni-channel strategy and significantly increase its e-commerce penetration; difficulties, delays and/or the Company's inability to (in whole or in part) develop and implement effective content to enhance its online retail position, improve its consumer engagement across social media platform and/or transform its technology and data to support efficient management of its digital infrastructure; 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; decreased consumer spending in response to weak economic conditions or weakness in the consumption of beauty care products in one or more of the Company's segments; adverse changes in foreign currency exchange rates, foreign currency controls and/or government-mandated pricing controls; decreased sales of the Company's products as a result of increased competitive activities by the Company's competitors; decreased performance by third-party suppliers, whether due to shortages of raw materials or otherwise; and/or supply disruptions at the Company’s manufacturing facilities; 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 among sales channels, such as due to the consumption declines in core beauty categories in the mass retail channel in North America; lower than expected customer acceptance or consumer acceptance of, or less than anticipated results from, the Company’s existing or new products; higher than expected retail store closures in the brick-and-mortar channels where the Company sells its products, as consumers continue to shift purchases to online and e-commerce channels; higher than expected restructuring or severance costs, acquisition costs and/or acquisition-related integration costs and capital expenditures, including, without limitation, costs and expenses related to the EA Integration Restructuring Program; higher than expected pension expense and/or cash contributions under its benefit plans, costs related to litigation, 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, product discontinuances or otherwise or decreased sales of the Company’s existing or new products; actions by the Company’s customers, such as greater than expected inventory management and/or de-stocking, 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; and 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;
|
(ii)
|
in addition to the items discussed in (i) above, the effects of and changes in economic conditions (such as volatility in the financial markets, inflation, increasing interest rates, monetary conditions and foreign currency fluctuations, foreign currency controls and/or government-mandated pricing controls, as well as in trade, monetary, fiscal and tax policies in international markets) and political conditions (such as military actions and terrorist activities);
|
(iii)
|
unanticipated costs or difficulties or delays in completing projects associated with continuing to execute the Company’s business initiatives or lower than expected revenues or the inability to create value through improving our financial performance as a result of such initiatives, including lower than expected sales, or higher than expected costs, including as may arise from any additional repositioning, repackaging or reformulating of one or more brands or product lines, launching of new product lines, including higher than expected expenses, including for sales returns, for launching its new products, acquiring businesses or brands (including through licensing transactions, if any), divesting or discontinuing non-core business lines (which may include exiting certain territories or converting the Company's go-to-trade structure in certain countries to other business models), further refining its approach to retail merchandising and/or difficulties, delays or increased costs in connection with taking further actions to optimize the Company’s manufacturing, sourcing, supply chain or organizational size and structure, including optimizing the Elizabeth Arden Acquisition (including difficulties or delays in and/or the Company’s inability to optimally integrate the Elizabeth Arden business, more than expected costs to fully implement such integration or delays in fully implementing the integration and/or less than expected benefits from the EA Integration Restructuring Program, more than expected costs in implementing such program and/or difficulties or delays, in whole or in part, in executing the EA Integration Restructuring Program), as well as the unavailability of cash generated by operations, cash on hand and/or funds under the 2016 Revolving Credit Facility, the 2018 Senior Line of Credit Facility or from other permitted additional sources of capital to fund such potential activities, as well as the unavailability of funds due to potential mandatory repayment obligations under the Asset-Based Term Facility;
|
(iv)
|
difficulties, delays in and/or less than expected results from the Company’s efforts to resolve the customer service level disruptions resulting from the launch of its new ERP system, such as the Company’s inability to remedy the ERP systems issues in time to recover lost sales; the ERP implementation continuing to disrupt the Company's operations and its ability to fulfill customer orders; the Company incurring greater than expected expedited shipping fees and other unanticipated expenses in connection with the remedial actions; and/or greater than expected customer reaction to the service level disruptions that could lead to decreased shelf space or loss of sales;
|
(v)
|
difficulties, delays or unanticipated costs or charges or less than expected cost reductions and other benefits resulting from the Company's restructuring activities, such as (A) in connection with the EA Integration Restructuring Program: (1) difficulties, delays or the inability of the Company to successfully complete the EA Integration Restructuring Program, in whole or in part, which could result in less than expected operating and financial benefits from such actions; (2) difficulties, delays or the inability of the Company to realize, in whole or in part, the anticipated benefits from the EA Integration Restructuring Program, such as difficulties with, delays in or the Company’s inability to generate certain reductions in its SG&A and/or eliminate certain positions; (3) delays in completing the EA Integration Restructuring Program, which could reduce the benefits realized from such activities; (4) higher than anticipated restructuring charges and/or payments in connection with completing the EA Integration Restructuring Program and/or changes in the expected timing of such charges and/or payments; (5) greater than anticipated costs or charges or less than anticipated cost reductions or other benefits from the EA Integration Restructuring Program; and/or (6) the risk that such program may not satisfy the Company’s objectives; and (B) in connection with the 2018 Optimization Program: (1) difficulties with, delays in or the Company’s inability to successfully complete the actions underlying the 2018 Optimization Program, in whole or in part, which could result in less than expected operating and financial benefits from such actions, such as difficulties with, delays in or the Company’s inability to generate reductions in its cost base and/or overhead costs; (2) higher than anticipated restructuring charges and/or payments and/or changes in the expected timing of such charges and/or payments; (3) delays in completing the actions underlying the 2018 Optimization Program, which could reduce and/or defer the benefits expected to be realized from such activities; and/or (4) less than anticipated annualized cost reductions from the 2018 Optimization Program and/or changes in the timing of realizing such cost reductions, such as due to less than anticipated resources to fund such activities and/or more than expected costs to achieve the expected cost reductions;
|
(vi)
|
lower than expected operating revenues, cash on hand and/or funds available under the 2016 Revolving Credit Facility, the 2018 Senior Line of Credit Facility and/or other permitted lines of credit; higher than anticipated operating expenses, such as referred to in clause (viii) below; and/or less than anticipated cash generated by the Company's domestic operations or unanticipated restrictions or taxes on repatriation of foreign earnings;
|
(vii)
|
the unavailability of funds under Products Corporation's 2016 Revolving Credit Facility, the 2018 Senior Line of Credit Facility or other permitted lines of credit; the unavailability of funds under the Asset-Based Term Facility, such as due to reductions in the applicable borrowing base that could require certain mandatory prepayments; or the unavailability of funds from difficulties, delays in or the Company's inability to take other measures, such as reducing discretionary spending;
|
(viii)
|
higher than expected operating expenses, sales returns, working capital expenses, integration and/or synergy costs related to the Elizabeth Arden Acquisition, permanent wall display costs, capital expenditures, debt service payments, cash tax payments, cash pension plan contributions, other post-retirement benefit plan contributions and/or net periodic benefit costs for the pension and other post-retirement benefit plans, restructuring costs, (including, without limitation, in connection with implementing the EA Integration Restructuring Program), severance and discontinued operations not otherwise included in the Company’s restructuring programs, debt and/or equity repurchases, costs related to litigation and/or payments in connection with business and/or brand acquisitions (including, without limitation, through licensing transactions, if any), and discontinuing non-core business lines and/or exiting and/or entering certain territories and/or channels of trade;
|
(ix)
|
unexpected significant impacts on the Company from changes in interest rates or foreign exchange rates;
|
(x)
|
difficulties, delays or the inability of the Company to efficiently manage its cash and working capital;
|
(xi)
|
lower than expected returns on pension plan assets and/or lower discount rates, which could result in higher than expected cash contributions, higher net periodic benefit costs and/or less than expected net periodic benefit income;
|
(xii)
|
unexpected significant variances in the Company's tax provision, effective tax rate and/or unrecognized tax benefits, whether due to the enactment of the Tax Act or otherwise, such as due to the issuance of unfavorable guidance, interpretations, technical clarifications and/or technical corrections legislation by the U.S. Congress, the U.S. Treasury Department or the IRS, unexpected changes in foreign, state or local tax regimes in response to the Tax Act, and/or changes in estimates that may impact the calculation of the Company's tax provisions, as well as changes in circumstances that could adversely impact the Company's expectations regarding the establishment of additional valuation allowances on its deferred tax assets;
|
(xiii)
|
unanticipated adverse effects on the Company’s business, prospects, results of operations, financial condition and/or cash flows as a result of unexpected developments with respect to the Company's legal proceedings;
|
(xiv)
|
changes in the fair values of the assets acquired in the Elizabeth Arden Acquisition due to, among other things, unanticipated future performance of the acquired licenses and/or other brands; and/or
|
(xv)
|
difficulties with, delays in and/or the Company’s inability to achieve, in whole or in part, or within the expected timeframe the expected benefits from the Elizabeth Arden Acquisition, such as the Company being unable to successfully implement, in whole or in part, its integration strategies.
|
•
|
Optimizing Global Supply Chain
: Realizing manufacturing efficiencies and rationalizing the Company’s global warehouse network and office locations to drive greater efficiency, lower its cost base and enhance the Company’s speed-to-market capabilities for new innovations;
|
•
|
Enhancing In-Market Execution
: Optimizing the Company’s commercial and organizational structures to create more efficient global and regional capabilities;
|
•
|
Reducing Overhead Costs and Streamlining Functions:
Streamlining functions and workflows by leveraging technology and shared services and standardizing and simplifying the Company’s business processes, leading to greater agility and faster decision-making.
|
*4.1
|
|
*4.2
|
|
*4.3
|
|
*10.1
|
|
*10.2
|
|
*31.1
|
|
*31.2
|
|
*32.1
|
|
*32.2
|
|
*101.INS
|
XBRL Instance Document
|
*101.SCH
|
XBRL Taxonomy Extension Schema
|
*101.CAL
|
XBRL Taxonomy Extension Calculation Linkbase
|
*101.DEF
|
XBRL Taxonomy Extension Definition Linkbase
|
*101.LAB
|
XBRL Taxonomy Extension Label Linkbase
|
*101.PRE
|
XBRL Taxonomy Extension Presentation Linkbase
|
Revlon, Inc.
|
||||
(Registrant)
|
||||
|
|
|
|
|
By: /s/ Debra Perelman
|
|
By: /s/ Victoria Dolan
|
|
By: /s/ Wendel F. Kralovich
|
Debra Perelman
|
|
Victoria Dolan
|
|
Wendel F. Kralovich
|
President, Chief Executive Officer &
|
|
Chief Financial Officer
|
|
Senior Vice President,
|
Director
|
|
|
|
Chief Accounting Officer
|
|
|
|
|
& Corporate Controller
|
1 Year Revlon Chart |
1 Month Revlon Chart |
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