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Revlon Sees Strength in Americas for Q1 2013
Posted: April 25, 2013
Revlon, Inc. announced results for the first quarter ended March 31, 2013. First quarter 2013 results compared to first quarter 2012 include net sales of $331.9 million compared to $330.7 million. Excluding the unfavorable impact of foreign currency fluctuations of $5.9 million, first quarter 2013 net sales increased by 2.1%. Operating income was $47.3 million, which included an $8.3 million gain in SG&A related to the insurance settlement for loss of inventory due to the 2011 fire in Venezuela, compared to $44.3 million. And net loss of $6.9 million, or $0.13 per diluted share, compared to net income of $8.5 million, or $0.16 per diluted share. Net loss in 2013 included charges of $27.9 million ($16.9 million after tax) related to the 2013 refinancing of the company’s senior notes and the amendment of its bank term loan, and the $8.3 million gain on the insurance settlement noted above.
Commenting on the announcement, Revlon president and CEO Alan T. Ennis, said, “Our strategic goal is to drive profitable growth and, in the first quarter of 2013, we grew net sales by 2.1%. We introduced several successful, consumer-preferred products in the marketplace and we increased support behind our brands. Our SinfulColors acquisition performed very well, and we are on track with the integration of our more recently acquired Pure Ice brand, which is also performing well. Lastly, in the quarter, we improved our capital structure by refinancing our senior notes and amending our bank term loan, reducing interest rates and extending maturities on our debt.”
In the U.S., net sales in the first quarter of 2013 were $192.1 million, an increase of $7.4 million, or 4%, compared to $184.7 million in the same period last year. The increase was primarily driven by higher net sales of Revlon and SinfulColors color cosmetics and the inclusion of the net sales of Pure Ice, partially offset by lower net sales of Almay color cosmetics and Revlon ColorSilk hair color.
In Asia Pacific, net sales in the first quarter of 2013 were $53.6 million, a decrease of $2.5 million, or 4.5%, compared to $56.1 million in the same period last year. Excluding the unfavorable impact of foreign currency fluctuations, net sales decreased $1.1 million, or 2%, primarily due to lower net sales of Revlon color cosmetics in China, partially offset by higher net sales of Revlon color cosmetics in Japan and the introduction of SinfulColors color cosmetics in Australia.
In Europe, Middle East and Africa, net sales in the first quarter of 2013 were $40.7 million, a decrease of $5.1 million, or 11.1%, compared to $45.8 million in the same period last year. Excluding the unfavorable impact of foreign currency fluctuations, net sales decreased $1.9 million, or 4.1%, primarily due to lower net sales of both Revlon color cosmetics and other beauty care products in France. The unfavorable impact of foreign currency fluctuations on net sales in the first quarter was primarily the result of the weaker South African rand versus the U.S. dollar as the rand declined 13.5% against the U.S. dollar year-over-year.
In Latin America and Canada, net sales in the first quarter of 2013 were $45.5 million, an increase of $1.4 million, or 3.2%, compared to$44.1 million in the same period last year. Excluding the unfavorable impact of foreign currency fluctuations, net sales increased $2.7 million, or 6.1%. This increase was primarily due to higher net sales of Revlon color cosmetics throughout the region and higher net sales of other beauty care products in Argentina. Net sales in Venezuela were essentially unchanged compared to the same period last year as higher selling prices reflecting market conditions and inflation were largely offset by lower sales volumes. Net sales in Argentina benefited from higher selling prices reflecting market conditions and inflation, which accounted for approximately one-third of the $2.7 million net sales increase in the region.