Revlon, Inc. announced that its board of directors approved a reverse split of Revlon's Class A and Class B common stock at a 1-for-10 split ratio. The company has also provided preliminary financial results for the first quarter 2008—reporting net sales of approximately $320 million (compared to $328.6 million in the first quarter of 2007), operating income of approximately $30 million (compared to $3 million reported in the first quarter of 2007) and a net loss of approximately $5 million, compared to a net loss of $35.2 million reported in the first quarter of 2007.
"We believe that a reverse stock split is in the best interest of our stockholders because we expect it will allow our stock to be more attractive to a broader range of institutional and other investors, would reduce certain of our costs, such as listing fees, and would be intended to satisfy our compliance with the NYSE's price criteria for continued listing," said David Kennedy, president and CEO, Revlon. "Our strong preliminary financial results for the first quarter of 2008 continue to build upon our performance in 2007, which was our best year in many years. These results continue to validate our strategy, and we remain committed to our focus on increasing the value of our company by building the Revlon brand and generating profitable sales growth and positive free cash flow."
According to the company, net sales benefited from the initial shipments related to the launch of Revlon Colorist hair color, which was the primary driver of the change in net sales year-over-year. Improvements were primarily driven by continuing cost improvements and the non-recurrence of brand support related to the launch of Revlon Colorist hair color in the first quarter of 2007.