Revlon, Inc. announced results for the third quarter ended Sept. 30, 2010. Third quarter 2010 results compared to third quarter 2009 are as follows:
- Net sales of $319.0 million compared to $326.2 million, a decrease of 2.2%. Excluding unfavorable foreign currency fluctuations of $5.8 million, net sales were essentially unchanged.
- Operating income of $39.3 million compared to $50.3 million.
- Net income of $12.5 million, or $0.24 per diluted share, compared to $23.1 million, or $0.45 per diluted share.
- Adjusted EBITDA1 of $54.3 million compared to $66.5 million.
- Free cash flow2 of $5.1 million compared to $54.1 million. The third quarter of 2009 benefited from favorable changes in working capital, primarily accounts receivable and inventory.
Commenting on the announcement, Revlon president and CEO Alan T. Ennis, said, "We continue to focus on building our strong brands and improving our organizational capability. In the third quarter, our innovative new product launches performed well, namely Revlon Grow Luscious mascara, Revlon Just Bitten lip stain + balm, and our Almay franchise extensions. Our net sales during the third quarter were essentially unchanged year over year; we delivered growth in many of our markets globally, offsetting a decline in the U.S. In 2010, we continue to generate strong cash flow and have maintained highly competitive operating income margins while increasing brand investment."
Ennis concluded, "We remain focused on delivering profitable net sales growth in all of our markets. We recently strengthened our senior management team, including the appointment of Julia Goldin as global chief marketing officer. Under Julia's leadership, coupled with our competitive pipeline of consumer-preferred new products planned for 2011 and beyond, we see a tremendous opportunity to further integrate marketing strategy and execution across all brands and regions."
In the United States, net sales in the third quarter of 2010 were $166.7 million, a decrease of $17.0 million, or 9.3%, compared to $183.7 million in the same period last year. The decrease in net sales was primarily driven by Revlon color cosmetics and Almay color cosmetics.
In Asia-Pacific, net sales in the third quarter of 2010 were $54.5 million, an increase of $2.8 million or 5.4%, compared to $51.7 million in the same period last year. Excluding the favorable impact of foreign currency fluctuations, net sales were essentially unchanged year-over-year. Lower net sales of Revlon color cosmetics in Australia and Japan were offset by higher net sales of Revlon color cosmetics and other beauty care products throughout the rest of the region.
In Europe, Middle East and Africa, net sales in the third quarter of 2010 were $50.6 million, an increase of $6.0 million or 13.5%, compared to $44.6 million in the same period last year. Excluding the unfavorable impact of foreign currency fluctuations, net sales increased $6.6 million, or 14.8%. The increase was primarily due to higher net sales of color cosmetics and fragrances in the U.K. and South Africa.
In Latin America, net sales in the third quarter of 2010 were $29.3 million, essentially unchanged year-over-year. Excluding the unfavorable impact of foreign currency fluctuations (including the unfavorable impact of the January 2010 devaluation of Venezuela's local currency relative to the U.S. dollar), net sales in Latin America increased $9.2 million, or 31.7%. The increase was primarily due to higher net sales of Revlon color cosmetics and Revlon ColorSilk hair color in both Venezuela and certain distributor markets. Higher selling prices in Venezuela, reflecting market conditions and inflation, accounted for approximately half of the $9.2 million net sales increase in the region.
In Canada, net sales in the third quarter of 2010 were $17.9 million, an increase of $0.7 million or 4.1%, compared to $17.2 million in the same period last year. Excluding the favorable impact of foreign currency fluctuations, net sales were essentially unchanged year-over-year.