|
|
x
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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__
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
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13-3662955
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification No.)
|
|
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1 New York Plaza, New York, New York
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10004
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(Address of principal executive offices)
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(Zip Code)
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Large accelerated filer
¨
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Accelerated filer
x
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Non-accelerated filer
¨
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Smaller reporting company
¨
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(Do not check if a smaller reporting company)
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|
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PART I - Financial Information
|
||
Item 1.
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Financial Statements
|
|
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Consolidated Balance Sheets as of September 30, 2014 (Unaudited) and December 31, 2013
|
|
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Unaudited Consolidated Statements of Income and Comprehensive Income for the Three and Nine Months Ended September 30, 2014 and 2013
|
|
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Unaudited Consolidated Statement of Stockholders' Deficiency for the Nine Months Ended September 30, 2014
|
|
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Unaudited Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2014 and 2013
|
|
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Notes to Unaudited Consolidated Financial Statements
|
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Item 2.
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Management's Discussion and Analysis of Financial Condition and Results of Operations
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Item 3.
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Quantitative and Qualitative Disclosures About Market Risk
|
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Item 4.
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Controls and Procedures
|
|
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PART II - Other Information
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||
Item 1.
|
Legal Proceedings
|
|
Item 1A.
|
Risk Factors
|
|
Item 6.
|
Exhibits
|
|
|
Signatures
|
|
September 30,
2014 |
|
December 31, 2013
(a)
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||||
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(Unaudited)
|
|
|
||||
ASSETS
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
178.4
|
|
|
$
|
244.1
|
|
Trade receivables, less allowance for doubtful accounts of $6.1 and $4.2 as of September 30, 2014 and December 31, 2013, respectively
|
256.0
|
|
|
253.5
|
|
||
Inventories
|
187.2
|
|
|
175.0
|
|
||
Deferred income taxes – current
|
61.8
|
|
|
65.1
|
|
||
Prepaid expenses and other
|
61.5
|
|
|
61.4
|
|
||
Total current assets
|
744.9
|
|
|
799.1
|
|
||
Property, plant and equipment, net of accumulated depreciation of $244.5 and $243.1 as of September 30, 2014 and December 31, 2013, respectively
|
209.1
|
|
|
195.9
|
|
||
Deferred income taxes – noncurrent
|
38.6
|
|
|
65.7
|
|
||
Goodwill
|
466.8
|
|
|
472.3
|
|
||
Intangible assets, net of accumulated amortization of $34.6 and $19.0 as of September 30, 2014 and December 31, 2013, respectively
|
336.1
|
|
|
360.1
|
|
||
Other assets
|
117.1
|
|
|
123.8
|
|
||
Total assets
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$
|
1,912.6
|
|
|
$
|
2,016.9
|
|
|
|
|
|
||||
LIABILITIES AND STOCKHOLDERS’ DEFICIENCY
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Short-term borrowings
|
$
|
7.9
|
|
|
$
|
7.9
|
|
Current portion of long-term debt
|
7.0
|
|
|
65.4
|
|
||
Accounts payable
|
167.7
|
|
|
165.7
|
|
||
Accrued expenses and other
|
261.4
|
|
|
313.7
|
|
||
Total current liabilities
|
444.0
|
|
|
552.7
|
|
||
Long-term debt
|
1,858.3
|
|
|
1,862.3
|
|
||
Long-term pension and other post-retirement plan liabilities
|
96.4
|
|
|
118.3
|
|
||
Other long-term liabilities
|
84.5
|
|
|
80.1
|
|
||
Commitments and contingencies
|
|
|
|
|
|
||
Stockholders’ deficiency:
|
|
|
|
||||
Class A Common Stock, par value $0.01 per share; 900,000,000 shares authorized; 53,925,029 and 53,231,651 shares issued as of September 30, 2014 and December 31, 2013, respectively
|
0.5
|
|
|
0.5
|
|
||
Additional paid-in capital
|
1,019.0
|
|
|
1,015.3
|
|
||
Treasury stock, at cost: 754,853 shares of Class A Common Stock as of September 30, 2014 and December 31, 2013, respectively
|
(9.8
|
)
|
|
(9.8
|
)
|
||
Accumulated deficit
|
(1,414.5
|
)
|
|
(1,452.7
|
)
|
||
Accumulated other comprehensive loss
|
(165.8
|
)
|
|
(149.8
|
)
|
||
Total stockholders’ deficiency
|
(570.6
|
)
|
|
(596.5
|
)
|
||
Total liabilities and stockholders’ deficiency
|
$
|
1,912.6
|
|
|
$
|
2,016.9
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
September 30,
|
|
September 30,
|
||||||||||||
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Net sales
|
$
|
472.3
|
|
|
$
|
333.1
|
|
|
$
|
1,440.0
|
|
|
$
|
1,003.7
|
|
Cost of sales
|
164.6
|
|
|
121.1
|
|
|
495.3
|
|
|
358.1
|
|
||||
Gross profit
|
307.7
|
|
|
212.0
|
|
|
944.7
|
|
|
645.6
|
|
||||
Selling, general and administrative expenses
|
251.8
|
|
|
164.1
|
|
|
761.6
|
|
|
482.0
|
|
||||
Acquisition and integration costs
|
0.9
|
|
|
5.9
|
|
|
5.4
|
|
|
6.3
|
|
||||
Restructuring charges and other, net
|
0.8
|
|
|
(1.5
|
)
|
|
18.1
|
|
|
1.8
|
|
||||
Operating income
|
54.2
|
|
|
43.5
|
|
|
159.6
|
|
|
155.5
|
|
||||
Other expenses, net:
|
|
|
|
|
|
|
|
||||||||
Interest expense
|
20.6
|
|
|
16.2
|
|
|
63.9
|
|
|
50.8
|
|
||||
Interest expense – preferred stock dividends
|
—
|
|
|
1.7
|
|
|
—
|
|
|
4.9
|
|
||||
Amortization of debt issuance costs
|
1.3
|
|
|
1.3
|
|
|
4.1
|
|
|
3.8
|
|
||||
Loss on early extinguishment of debt
|
—
|
|
|
0.2
|
|
|
2.0
|
|
|
28.1
|
|
||||
Foreign currency losses, net
|
9.3
|
|
|
0.4
|
|
|
17.9
|
|
|
3.2
|
|
||||
Miscellaneous, net
|
0.1
|
|
|
0.6
|
|
|
0.2
|
|
|
0.8
|
|
||||
Other expenses, net
|
31.3
|
|
|
20.4
|
|
|
88.1
|
|
|
91.6
|
|
||||
Income from continuing operations before income taxes
|
22.9
|
|
|
23.1
|
|
|
71.5
|
|
|
63.9
|
|
||||
Provision for income taxes
|
8.7
|
|
|
12.1
|
|
|
34.2
|
|
|
30.3
|
|
||||
Income from continuing operations, net of taxes
|
14.2
|
|
|
11.0
|
|
|
37.3
|
|
|
33.6
|
|
||||
Income (loss) from discontinued operations, net of taxes
|
0.4
|
|
|
(1.5
|
)
|
|
0.9
|
|
|
(6.3
|
)
|
||||
Net income
|
$
|
14.6
|
|
|
$
|
9.5
|
|
|
$
|
38.2
|
|
|
$
|
27.3
|
|
Other comprehensive (loss) income:
|
|
|
|
|
|
|
|
|
|
||||||
Currency translation adjustment, net of tax
(a)
|
(18.3
|
)
|
|
1.1
|
|
|
(17.1
|
)
|
|
(3.6
|
)
|
||||
Amortization of pension related costs, net of tax
(b)(d)
|
1.1
|
|
|
2.0
|
|
|
3.4
|
|
|
5.8
|
|
||||
Revaluation of derivative financial instruments, net of tax
(c)
|
0.6
|
|
|
—
|
|
|
(2.3
|
)
|
|
—
|
|
||||
Other comprehensive (loss) income
|
(16.6
|
)
|
|
3.1
|
|
|
(16.0
|
)
|
|
2.2
|
|
||||
Total comprehensive (loss) income
|
$
|
(2.0
|
)
|
|
$
|
12.6
|
|
|
$
|
22.2
|
|
|
$
|
29.5
|
|
|
|
|
|
|
|
|
|
||||||||
Basic earnings (loss) per common share:
|
|
|
|
|
|
|
|
||||||||
Continuing operations
|
$
|
0.27
|
|
|
$
|
0.21
|
|
|
$
|
0.71
|
|
|
$
|
0.64
|
|
Discontinued operations
|
0.01
|
|
|
(0.03
|
)
|
|
0.02
|
|
|
(0.12
|
)
|
||||
Net income
|
$
|
0.28
|
|
|
$
|
0.18
|
|
|
$
|
0.73
|
|
|
$
|
0.52
|
|
|
|
|
|
|
|
|
|
|
|||||||
Diluted earnings (loss) per common share:
|
|
|
|
|
|
|
|
|
|||||||
Continuing operations
|
$
|
0.27
|
|
|
$
|
0.21
|
|
|
$
|
0.71
|
|
|
$
|
0.64
|
|
Discontinued operations
|
0.01
|
|
|
(0.03
|
)
|
|
0.02
|
|
|
(0.12
|
)
|
||||
Net income
|
$
|
0.28
|
|
|
$
|
0.18
|
|
|
$
|
0.73
|
|
|
$
|
0.52
|
|
|
|
|
|
|
|
|
|
|
|||||||
Weighted average number of common shares outstanding:
|
|
|
|
|
|
|
|
|
|||||||
Basic
|
52,356,798
|
|
|
52,356,798
|
|
|
52,356,798
|
|
|
52,356,798
|
|
||||
Diluted
|
52,414,963
|
|
|
52,356,798
|
|
|
52,389,935
|
|
|
52,356,798
|
|
(a)
|
Net of tax expense (benefit) of
$0.2 million
and
$0.9 million
for the
three months ended September 30, 2014
and
2013
, respectively, and
$(0.4) million
and
$3.2 million
for the
nine months ended September 30, 2014
and
2013
, respectively.
|
(b)
|
Net of tax benefit of
nil
and
$(0.2) million
for the
three months ended September 30, 2014
and 2013, respectively, and
nil
and
$(0.9) million
for the nine months ended
September 30, 2014
and
2013
, respectively.
|
(c)
|
Net of tax expense (benefit) of
$0.4 million
and
$(1.4) million
for the three and nine months ended
September 30, 2014
, respectively.
|
(d)
|
This other comprehensive income component is included in the computation of net periodic benefit (income) costs. See Note 5, “Pension and Post-Retirement Benefits,” for additional information regarding net periodic benefit (income) costs.
|
|
Common Stock
|
|
Additional Paid-In-Capital
|
|
Treasury Stock
|
|
Accumulated Deficit
|
|
Accumulated Other Comprehensive Loss
|
|
Total Stockholders’ Deficiency
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Balance, January 1, 2014
|
$
|
0.5
|
|
|
$
|
1,015.3
|
|
|
$
|
(9.8
|
)
|
|
$
|
(1,452.7
|
)
|
|
$
|
(149.8
|
)
|
|
$
|
(596.5
|
)
|
Stock-based compensation amortization
|
|
|
|
3.7
|
|
|
|
|
|
|
|
|
|
|
|
3.7
|
|
||||||
Net income
|
|
|
|
|
|
|
38.2
|
|
|
|
|
38.2
|
|
||||||||||
Other comprehensive income, net
(a)
|
|
|
|
|
|
|
|
|
(16.0
|
)
|
|
(16.0
|
)
|
||||||||||
Balance, September 30, 2014
|
$
|
0.5
|
|
|
$
|
1,019.0
|
|
|
$
|
(9.8
|
)
|
|
$
|
(1,414.5
|
)
|
|
$
|
(165.8
|
)
|
|
$
|
(570.6
|
)
|
(a)
|
See Note 12, “Accumulated Other Comprehensive Loss,” regarding the changes in the accumulated balances for each component of other comprehensive income during the
nine months ended September 30, 2014
.
|
|
Nine Months Ended September 30,
|
||||||
|
2014
|
|
2013
|
||||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
|
|
|
||||
Net income
|
$
|
38.2
|
|
|
$
|
27.3
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
||||
Depreciation and amortization
|
76.4
|
|
|
51.4
|
|
||
Foreign currency loss from Venezuela re-measurement
|
6.0
|
|
|
0.6
|
|
||
Amortization of debt discount
|
1.0
|
|
|
1.2
|
|
||
Stock-based compensation amortization
|
3.7
|
|
|
—
|
|
||
Provision for deferred income taxes
|
28.0
|
|
|
19.6
|
|
||
Loss on early extinguishment of debt
|
2.0
|
|
|
28.1
|
|
||
Amortization of debt issuance costs
|
4.1
|
|
|
3.8
|
|
||
Insurance proceeds for property, plant and equipment
|
—
|
|
|
(13.1
|
)
|
||
Gain on sale of certain assets
|
(0.4
|
)
|
|
(3.1
|
)
|
||
Pension and other post-retirement income
|
(3.9
|
)
|
|
(0.2
|
)
|
||
Change in assets and liabilities:
|
|
|
|
|
|||
(Increase) decrease in trade receivables
|
(16.4
|
)
|
|
16.9
|
|
||
Increase in inventories
|
(17.9
|
)
|
|
(31.3
|
)
|
||
Increase in prepaid expenses and other current assets
|
(1.6
|
)
|
|
(7.3
|
)
|
||
Increase in accounts payable
|
10.3
|
|
|
4.2
|
|
||
Decrease in accrued expenses and other current liabilities
|
(32.8
|
)
|
|
(42.4
|
)
|
||
Pension and other post-retirement plan contributions
|
(16.4
|
)
|
|
(16.0
|
)
|
||
Purchases of permanent displays
|
(33.1
|
)
|
|
(30.1
|
)
|
||
Other, net
|
(0.5
|
)
|
|
(3.8
|
)
|
||
Net cash provided by operating activities
|
46.7
|
|
|
5.8
|
|
||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
|
|
|
||||
Capital expenditures
|
(30.3
|
)
|
|
(17.9
|
)
|
||
Insurance proceeds for property, plant and equipment
|
—
|
|
|
13.1
|
|
||
Proceeds from the sale of certain assets
|
0.9
|
|
|
3.4
|
|
||
Net cash used in investing activities
|
(29.4
|
)
|
|
(1.4
|
)
|
||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
|
|
|
||||
Net (decrease) increase in short-term borrowings and overdraft
|
(3.1
|
)
|
|
0.2
|
|
||
Repayment under the Amended and Restated Senior Subordinated Term Loan
|
(58.4
|
)
|
|
—
|
|
||
Repayments under the Acquisition Term Loan
|
(5.3
|
)
|
|
—
|
|
||
Proceeds from the issuance of the 5¾% Senior Notes
|
—
|
|
|
500.0
|
|
||
Repayment of the 9¾% Senior Secured Notes
|
—
|
|
|
(330.0
|
)
|
||
Repayments under the 2011 Term Loan
|
—
|
|
|
(113.0
|
)
|
||
Payment of financing costs
|
(1.8
|
)
|
|
(32.7
|
)
|
||
Other financing activities
|
(2.1
|
)
|
|
(1.8
|
)
|
||
Net cash (used in) provided by financing activities
|
(70.7
|
)
|
|
22.7
|
|
||
Effect of exchange rate changes on cash and cash equivalents
|
(12.3
|
)
|
|
(4.1
|
)
|
||
Net (decrease) increase in cash and cash equivalents
|
(65.7
|
)
|
|
23.0
|
|
||
Cash and cash equivalents at beginning of period
|
244.1
|
|
|
116.3
|
|
||
Cash and cash equivalents at end of period
|
$
|
178.4
|
|
|
$
|
139.3
|
|
Supplemental schedule of cash flow information:
|
|
|
|
||||
Cash paid during the period for:
|
|
|
|
||||
Interest
|
$
|
72.7
|
|
|
$
|
56.2
|
|
Income taxes, net of refunds
|
16.8
|
|
|
10.7
|
|
||
Preferred stock dividends
|
—
|
|
|
4.6
|
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
Acquisition costs
|
$
|
0.1
|
|
|
$
|
5.9
|
|
|
$
|
0.5
|
|
|
$
|
6.3
|
|
Integration costs
|
0.8
|
|
|
—
|
|
|
4.9
|
|
|
—
|
|
||||
Total acquisition and integration costs
|
$
|
0.9
|
|
|
$
|
5.9
|
|
|
$
|
5.4
|
|
|
$
|
6.3
|
|
|
Amounts Previously Recognized as of October 9, 2013 (Provisional)
(a)
|
|
Measurement Period Adjustments
|
|
Amounts Recognized as of Acquisition Date (Adjusted)
|
||||||
Cash and cash equivalents
|
$
|
36.9
|
|
|
$
|
—
|
|
|
$
|
36.9
|
|
Trade receivables
|
83.9
|
|
|
—
|
|
|
83.9
|
|
|||
Inventories
|
75.1
|
|
|
—
|
|
|
75.1
|
|
|||
Prepaid expenses and other
|
31.3
|
|
|
—
|
|
|
31.3
|
|
|||
Property, plant and equipment
|
96.7
|
|
|
—
|
|
|
96.7
|
|
|||
Intangible assets
(b)
|
292.7
|
|
|
5.4
|
|
|
298.1
|
|
|||
Goodwill
(b)(c)
|
255.7
|
|
|
(2.4
|
)
|
|
253.3
|
|
|||
Deferred tax asset - noncurrent
|
53.1
|
|
|
—
|
|
|
53.1
|
|
|||
Other assets
(c)
|
1.9
|
|
|
3.9
|
|
|
5.8
|
|
|||
Total assets acquired
|
927.3
|
|
|
6.9
|
|
|
934.2
|
|
|||
Accounts payable
|
48.0
|
|
|
—
|
|
|
48.0
|
|
|||
Accrued expenses and other
|
65.6
|
|
|
—
|
|
|
65.6
|
|
|||
Long-term debt
|
0.9
|
|
|
—
|
|
|
0.9
|
|
|||
Long-term pension and other benefit plan liabilities
|
4.5
|
|
|
—
|
|
|
4.5
|
|
|||
Deferred tax liability
(b)
|
123.3
|
|
|
2.1
|
|
|
125.4
|
|
|||
Other long-term liabilities
(c)
|
20.5
|
|
|
4.8
|
|
|
25.3
|
|
|||
Total liabilities assumed
|
262.8
|
|
|
6.9
|
|
|
269.7
|
|
|||
Total consideration
|
$
|
664.5
|
|
|
$
|
—
|
|
|
$
|
664.5
|
|
|
Fair Values at October 9, 2013
|
|
Weighted Average Useful Life (in years)
|
||
Trade names, indefinite-lived
|
$
|
108.6
|
|
|
Indefinite
|
Trade names, finite-lived
|
109.4
|
|
|
5 - 20
|
|
Customer relationships
|
62.4
|
|
|
15 - 20
|
|
License agreement
|
4.1
|
|
|
10
|
|
Internally-developed IP
|
13.6
|
|
|
10
|
|
Total acquired intangible assets
|
$
|
298.1
|
|
|
|
|
Unaudited Pro Forma Results
|
||||||
|
Three Months Ended
September 30, 2013 |
|
Nine Months Ended September 30, 2013
|
||||
Net sales
|
$
|
473.9
|
|
|
$
|
1,408.1
|
|
Income from continuing operations, before income taxes
|
43.9
|
|
|
92.8
|
|
1.
|
$
12.5 million
and
$4.9 million
of non-restructuring integration costs recognized in 2013 and for the
nine months ended September 30, 2014
, respectively. Such costs have been reflected within acquisition and integration costs in the Company's Consolidated Statements of Income and Comprehensive Income and are related to combining Colomer’s operations into the Company’s business;
|
2.
|
Expected integration-related capital expenditures of approximately
$7 million
,
$3.3 million
of which has been paid in the
nine months ended September 30, 2014
, approximately
$1.9 million
is expected to be paid during the remainder of 2014 and the remaining balance in 2015; and
|
3.
|
The Company expects total restructuring and related charges of approximately
$26 million
,
$17.1 million
of which was recognized for the
nine months ended September 30, 2014
. Approximately
$4 million
of charges are expected to be recognized during the remainder of 2014 and any remaining charges to be recognized in 2015. A summary of the restructuring and related charges incurred through
September 30, 2014
and expected to be incurred for the Integration Program, are as follows:
|
|
Restructuring Charges and Other, Net
|
|
|
|
|
|
|
||||||||||||||||
|
Employee Severance and Other Personnel Benefits
|
|
Other
|
|
Total Restructuring Charges
|
|
Inventory Write-offs and Other Manufacturing-Related Costs (a)
|
|
Other Charges (b)
|
|
Total Restructuring and Related Charges
|
||||||||||||
Charges incurred through the nine months ended September 30, 2014
|
$
|
15.2
|
|
|
$
|
1.2
|
|
|
$
|
16.4
|
|
|
$
|
0.2
|
|
|
$
|
0.5
|
|
|
$
|
17.1
|
|
Total expected charges
|
$
|
17.5
|
|
|
$
|
3.0
|
|
|
$
|
20.5
|
|
|
$
|
2.0
|
|
|
$
|
3.5
|
|
|
$
|
26.0
|
|
(a)
|
Inventory write-offs and other manufacturing-related costs are recorded within cost of sales within the Company’s Consolidated Statements of Income and Comprehensive Income.
|
(b)
|
Other charges are recorded within SG&A expenses within the Company’s Consolidated Statements of Income and Comprehensive Income.
|
|
Restructuring Charges and Other, Net
|
|
|
|
|
|
|
|
|
||||||||||||||||||
|
Employee Severance and Other Personnel Benefits
|
|
Other
|
|
Total Restructuring Charges
|
|
Allowances and Returns
|
|
Inventory Write-offs
|
|
Other Charges
|
|
Total Restructuring and Related Charges
|
||||||||||||||
Charges incurred through December 31, 2013
|
$
|
9.1
|
|
|
$
|
0.5
|
|
|
$
|
9.6
|
|
|
$
|
7.4
|
|
|
$
|
4.0
|
|
|
$
|
0.4
|
|
|
$
|
21.4
|
|
Adjustments recorded for the nine months ended September 30, 2014
(a)
|
(0.5
|
)
|
|
(0.2
|
)
|
|
(0.7
|
)
|
|
(0.9
|
)
|
|
(0.9
|
)
|
|
—
|
|
|
(2.5
|
)
|
|||||||
Cumulative charges incurred through September 30, 2014
|
$
|
8.6
|
|
|
$
|
0.3
|
|
|
$
|
8.9
|
|
|
$
|
6.5
|
|
|
$
|
3.1
|
|
|
$
|
0.4
|
|
|
$
|
18.9
|
|
Total expected charges
|
$
|
8.6
|
|
|
$
|
0.3
|
|
|
$
|
8.9
|
|
|
$
|
6.5
|
|
|
$
|
3.1
|
|
|
$
|
0.4
|
|
|
$
|
18.9
|
|
(a)
|
Of the
$2.5 million
adjustments for the nine months ended September 30, 2014 related to the December 2013 Program,
$2.3 million
relates to the Company's exit of its business operations in China and is recorded within income (loss) from discontinued operations, net of taxes. See Note 4, "Discontinued Operations," for further discussion. The remaining
$0.2 million
is recorded in restructuring charges and other, net within income from continuing operations, net of taxes.
|
|
|
|
|
|
|
|
Utilized, Net
|
|
|
||||||||||||||
Balance
Beginning of Year
|
|
(Income) Expense, Net
|
|
Foreign Currency Translation
|
|
Cash
|
|
Non-cash
|
|
Balance End of Year
|
|||||||||||||
Integration Program:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Employee severance and other personnel benefits
|
$
|
—
|
|
|
$
|
15.2
|
|
|
$
|
—
|
|
|
$
|
(5.1
|
)
|
|
$
|
—
|
|
|
$
|
10.1
|
|
Other
|
—
|
|
|
1.2
|
|
|
—
|
|
|
(1.0
|
)
|
|
—
|
|
|
0.2
|
|
||||||
December 2013 Program:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Employee severance and other personnel benefits
|
9.0
|
|
|
(0.5
|
)
|
|
(0.2
|
)
|
|
(7.3
|
)
|
|
0.2
|
|
|
1.2
|
|
||||||
Other
|
0.5
|
|
|
(0.2
|
)
|
|
—
|
|
|
(0.3
|
)
|
|
—
|
|
|
—
|
|
||||||
September 2012 Program:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Employee severance and other personnel benefits
|
2.7
|
|
|
—
|
|
|
(0.1
|
)
|
|
(2.4
|
)
|
|
|
|
|
0.2
|
|
||||||
Other
|
1.5
|
|
|
—
|
|
|
—
|
|
|
(0.8
|
)
|
|
—
|
|
|
0.7
|
|
||||||
2014 Other Immaterial Actions:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Employee severance and other personnel benefits
|
—
|
|
|
2.2
|
|
|
(0.1
|
)
|
|
(1.8
|
)
|
|
—
|
|
|
0.3
|
|
||||||
Other
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Total restructuring reserve
|
$
|
13.7
|
|
|
$
|
17.9
|
|
|
$
|
(0.4
|
)
|
|
$
|
(18.7
|
)
|
|
$
|
0.2
|
|
|
$
|
12.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Gain on sale of equipment for 2014 Other Immaterial Actions
|
|
|
(0.3
|
)
|
|
|
|
|
|
|
|
|
|||||||||||
Portion of restructuring benefits recorded within income (loss) from discontinued operations
(a)
|
|
|
0.5
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total restructuring charges and other, net, from continuing operations
|
|
|
$
|
18.1
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
Net sales
(a)
|
$
|
—
|
|
|
$
|
6.3
|
|
|
$
|
2.6
|
|
|
$
|
17.7
|
|
Income (loss) from discontinued operations, before taxes
|
0.4
|
|
|
(1.6
|
)
|
|
1.1
|
|
|
(6.7
|
)
|
||||
Provision for income taxes
|
—
|
|
|
0.1
|
|
|
0.2
|
|
|
0.4
|
|
||||
Income (loss) from discontinued operations, net of taxes
|
0.4
|
|
|
(1.5
|
)
|
|
0.9
|
|
|
(6.3
|
)
|
|
September 30,
2014 |
|
December 31, 2013
|
||||
Cash and cash equivalents
|
$
|
3.4
|
|
|
$
|
0.9
|
|
Trade receivables, net
|
0.2
|
|
|
1.9
|
|
||
Inventories
|
—
|
|
|
—
|
|
||
Other current assets
|
0.1
|
|
|
—
|
|
||
Total current assets
|
3.7
|
|
|
2.8
|
|
||
Total assets
|
$
|
3.7
|
|
|
$
|
2.8
|
|
|
|
|
|
||||
Accounts payable
|
$
|
1.5
|
|
|
$
|
4.7
|
|
Accrued expenses and other
|
4.0
|
|
|
27.6
|
|
||
Total current liabilities
|
5.5
|
|
|
32.3
|
|
||
Other long-term liabilities
|
—
|
|
|
2.8
|
|
||
Total liabilities
|
$
|
5.5
|
|
|
$
|
35.1
|
|
|
Pension Plans |
|
Other
Post-Retirement Benefit Plans |
||||||||||||
|
Three Months Ended September 30,
|
|
Three Months Ended September 30,
|
||||||||||||
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
Net periodic benefit (income) costs:
|
|
||||||||||||||
Service cost
|
$
|
0.2
|
|
|
$
|
0.3
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Interest cost
|
7.5
|
|
|
6.9
|
|
|
0.2
|
|
|
0.1
|
|
||||
Expected return on plan assets
|
(10.3
|
)
|
|
(9.6
|
)
|
|
—
|
|
|
—
|
|
||||
Amortization of actuarial loss
|
1.1
|
|
|
2.1
|
|
|
—
|
|
|
0.1
|
|
||||
|
(1.5
|
)
|
|
(0.3
|
)
|
|
0.2
|
|
|
0.2
|
|
||||
Portion allocated to Revlon Holdings
|
(0.1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
|
$
|
(1.6
|
)
|
|
$
|
(0.3
|
)
|
|
$
|
0.2
|
|
|
$
|
0.2
|
|
|
Pension Plans |
|
Other
Post-Retirement Benefit Plans |
||||||||||||
|
Nine Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
Net periodic benefit (income) costs:
|
|
||||||||||||||
Service cost
|
$
|
0.6
|
|
|
$
|
0.7
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Interest cost
|
22.6
|
|
|
20.7
|
|
|
0.5
|
|
|
0.4
|
|
||||
Expected return on plan assets
|
(31.0
|
)
|
|
(28.7
|
)
|
|
—
|
|
|
—
|
|
||||
Amortization of actuarial loss
|
3.3
|
|
|
6.4
|
|
|
0.1
|
|
|
0.3
|
|
||||
|
(4.5
|
)
|
|
(0.9
|
)
|
|
0.6
|
|
|
0.7
|
|
||||
Portion allocated to Revlon Holdings
|
(0.1
|
)
|
|
(0.1
|
)
|
|
—
|
|
|
—
|
|
||||
|
$
|
(4.6
|
)
|
|
$
|
(1.0
|
)
|
|
$
|
0.6
|
|
|
$
|
0.7
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
Net periodic benefit (income) costs:
|
|
|
|
|
|
|
|
||||||||
Cost of sales
|
$
|
(1.2
|
)
|
|
$
|
(0.6
|
)
|
|
$
|
(3.0
|
)
|
|
$
|
(1.5
|
)
|
Selling, general and administrative expense
|
(0.2
|
)
|
|
0.6
|
|
|
(0.5
|
)
|
|
1.8
|
|
||||
Inventories
|
—
|
|
|
(0.1
|
)
|
|
(0.5
|
)
|
|
(0.6
|
)
|
||||
|
$
|
(1.4
|
)
|
|
$
|
(0.1
|
)
|
|
$
|
(4.0
|
)
|
|
$
|
(0.3
|
)
|
•
|
Consumer
- The Consumer segment is comprised of the Company's consumer brands, which primarily include
Revlon
,
Almay
,
SinfulColors
and
Pure Ice
in cosmetics;
Revlon ColorSilk
in women’s hair color;
Revlon
in beauty tools; and
Mitchum
in anti-perspirant deodorants. The Company’s principal customers for its consumer products include the mass retail channel, consisting of large mass volume retailers and chain drug and food stores in the U.S. and internationally, as well as certain department stores and other specialty stores, such as perfumeries, outside the U.S. The Consumer segment also includes a skincare and hair color line sold in the mass retail channel, primarily in Spain, which were acquired as part of the Colomer Acquisition.
|
•
|
Professional
- The Professional segment is comprised primarily of the brands which the Company acquired in the Colomer Acquisition, which include
Revlon Professional
in hair color and hair care;
CND
-branded products
in nail polishes and nail enhancements; and
American Crew
in men’s grooming products, all of which are sold worldwide in the professional salon channel. The Company’s principal customers for its professional products include hair and nail salons and distributors in the U.S. and internationally. The Professional segment also includes a multi-cultural line consisting of
Creme of Nature
hair care products sold in the mass retail channel and in professional salons, primarily in the U.S.
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2014
(a)
|
|
2013
|
|
2014
(a)
|
|
2013
|
||||||||
Segment Net Sales:
|
|
|
|
|
|
|
|
||||||||
Consumer
|
$
|
348.2
|
|
|
$
|
333.1
|
|
|
$
|
1,055.0
|
|
|
$
|
1,003.7
|
|
Professional
|
124.1
|
|
|
—
|
|
|
385.0
|
|
|
—
|
|
||||
Total
|
$
|
472.3
|
|
|
$
|
333.1
|
|
|
$
|
1,440.0
|
|
|
$
|
1,003.7
|
|
|
|
|
|
|
|
|
|
||||||||
Segment Profit:
|
|
|
|
|
|
|
|
||||||||
Consumer
|
$
|
78.1
|
|
|
$
|
78.9
|
|
|
$
|
232.0
|
|
|
$
|
240.2
|
|
Professional
|
25.2
|
|
|
—
|
|
|
88.5
|
|
|
—
|
|
||||
Total
|
$
|
103.3
|
|
|
$
|
78.9
|
|
|
$
|
320.5
|
|
|
$
|
240.2
|
|
|
|
|
|
|
|
|
|
||||||||
Reconciliation:
|
|
|
|
|
|
|
|
||||||||
Segment Profit
|
$
|
103.3
|
|
|
$
|
78.9
|
|
|
$
|
320.5
|
|
|
$
|
240.2
|
|
Less:
|
|
|
|
|
|
|
|
||||||||
Unallocated corporate expenses
|
18.3
|
|
|
15.3
|
|
|
54.0
|
|
|
48.5
|
|
||||
Depreciation and amortization
|
25.6
|
|
|
17.4
|
|
|
76.4
|
|
|
51.4
|
|
||||
Non-cash stock compensation expense
|
3.2
|
|
|
—
|
|
|
3.7
|
|
|
—
|
|
||||
Non-recurring items:
|
|
|
|
|
|
|
|
||||||||
Restructuring and related charges
|
1.1
|
|
|
(1.4
|
)
|
|
18.8
|
|
|
2.2
|
|
||||
Acquisition and integration costs
|
0.9
|
|
|
5.9
|
|
|
5.4
|
|
|
6.3
|
|
||||
Inventory purchase accounting adjustment, cost of sales
|
—
|
|
|
—
|
|
|
2.6
|
|
|
—
|
|
||||
Gain from insurance proceeds related to Venezuela fire
|
—
|
|
|
—
|
|
|
—
|
|
|
(26.4
|
)
|
||||
Accrual for clean-up costs related to destroyed facility in Venezuela
|
—
|
|
|
—
|
|
|
—
|
|
|
4.5
|
|
||||
Shareholder litigation recoveries
|
—
|
|
|
(1.8
|
)
|
|
—
|
|
|
(1.8
|
)
|
||||
Operating Income
|
54.2
|
|
|
43.5
|
|
|
159.6
|
|
|
155.5
|
|
||||
Less:
|
|
|
|
|
|
|
|
||||||||
Interest Expense
|
20.6
|
|
|
16.2
|
|
|
63.9
|
|
|
50.8
|
|
||||
Interest Expense - Preferred Stock
|
—
|
|
|
1.7
|
|
|
—
|
|
|
4.9
|
|
||||
Amortization of debt issuance costs
|
1.3
|
|
|
1.3
|
|
|
4.1
|
|
|
3.8
|
|
||||
Loss on early extinguishment of debt
|
—
|
|
|
0.2
|
|
|
2.0
|
|
|
28.1
|
|
||||
Foreign currency losses (gains), net
|
9.3
|
|
|
0.4
|
|
|
17.9
|
|
|
3.2
|
|
||||
Miscellaneous, net
|
0.1
|
|
|
0.6
|
|
|
0.2
|
|
|
0.8
|
|
||||
Income from continuing operations before income taxes
|
$
|
22.9
|
|
|
$
|
23.1
|
|
|
$
|
71.5
|
|
|
$
|
63.9
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||||||||||
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||||||||||
Geographic area:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Net sales:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
United States
|
$
|
243.8
|
|
|
52%
|
|
$
|
185.8
|
|
|
56%
|
|
$
|
749.2
|
|
|
52%
|
|
$
|
581.8
|
|
|
58%
|
Outside of the United States
|
228.5
|
|
|
48%
|
|
147.3
|
|
|
44%
|
|
690.8
|
|
|
48%
|
|
421.9
|
|
|
42%
|
||||
|
$
|
472.3
|
|
|
|
|
$
|
333.1
|
|
|
|
|
$
|
1,440.0
|
|
|
|
|
$
|
1,003.7
|
|
|
|
|
September 30,
2014 |
|
December 31,
2013 |
||||||||
Long-lived assets, net:
|
|
|
|
|
|
|
|||||
United States
|
$
|
847.6
|
|
|
75%
|
|
$
|
837.0
|
|
|
73%
|
Outside of the United States
|
281.5
|
|
|
25%
|
|
315.1
|
|
|
27%
|
||
|
$
|
1,129.1
|
|
|
|
$
|
1,152.1
|
|
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||||||||||
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||||||||||
Classes of similar products:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Net sales:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Color cosmetics
|
$
|
242.6
|
|
|
51%
|
|
$
|
212.3
|
|
|
64%
|
|
$
|
763.5
|
|
|
53%
|
|
$
|
662.1
|
|
|
66%
|
Hair care
|
132.8
|
|
|
28%
|
|
43.1
|
|
|
13%
|
|
405.5
|
|
|
28%
|
|
131.0
|
|
|
13%
|
||||
Beauty care and fragrance
|
96.9
|
|
|
21%
|
|
77.7
|
|
|
23%
|
|
271.0
|
|
|
19%
|
|
210.6
|
|
|
21%
|
||||
|
$
|
472.3
|
|
|
|
|
$
|
333.1
|
|
|
|
|
$
|
1,440.0
|
|
|
|
|
$
|
1,003.7
|
|
|
|
|
September 30, 2014
|
|
December 31,
2013 |
||||
Raw materials and supplies
|
$
|
53.7
|
|
|
$
|
50.8
|
|
Work-in-process
|
13.4
|
|
|
12.8
|
|
||
Finished goods
|
120.1
|
|
|
111.4
|
|
||
|
$
|
187.2
|
|
|
$
|
175.0
|
|
|
Consumer
|
|
Professional
|
|
Total
|
||||||
Balance at December 31, 2013 before Measurement Period Adjustments
(a)
|
$
|
217.9
|
|
|
$
|
256.8
|
|
|
$
|
474.7
|
|
Measurement Period Adjustments
|
—
|
|
|
(2.4
|
)
|
|
(2.4
|
)
|
|||
Balance at December 31, 2013
|
217.9
|
|
|
254.4
|
|
|
472.3
|
|
|||
Foreign currency translation adjustment
|
—
|
|
|
(5.5
|
)
|
|
(5.5
|
)
|
|||
Balance at September 30, 2014
|
$
|
217.9
|
|
|
$
|
248.9
|
|
|
$
|
466.8
|
|
|
September 30, 2014
|
||||||||||
|
Gross Carrying Amount
|
|
Accumulated Amortization
|
|
Net Carrying Amount
|
||||||
Finite-lived intangible assets:
|
|
|
|
|
|
||||||
Trademarks and Licenses
|
$
|
140.6
|
|
|
$
|
(20.8
|
)
|
|
$
|
119.8
|
|
Customer relationships
|
110.0
|
|
|
(11.8
|
)
|
|
98.2
|
|
|||
Patents and Internally-Developed IP
|
16.1
|
|
|
(2.0
|
)
|
|
14.1
|
|
|||
Total finite-lived intangible assets
|
$
|
266.7
|
|
|
$
|
(34.6
|
)
|
|
$
|
232.1
|
|
|
|
|
|
|
|
||||||
Indefinite-lived intangible assets:
|
|
|
|
|
|
||||||
Trade Names
|
$
|
104.0
|
|
|
|
|
$
|
104.0
|
|
||
Total indefinite-lived intangible assets
|
$
|
104.0
|
|
|
|
|
$
|
104.0
|
|
||
|
|
|
|
|
|
||||||
Total intangible assets
|
$
|
370.7
|
|
|
$
|
(34.6
|
)
|
|
$
|
336.1
|
|
|
|
|
|
|
|
||||||
|
December 31, 2013
(a)
|
||||||||||
|
Gross Carrying Amount
|
|
Accumulated Amortization
|
|
Net Carrying Amount
|
||||||
Finite-lived intangible assets:
|
|
|
|
|
|
||||||
Trademarks and Licenses
|
$
|
142.1
|
|
|
$
|
(11.0
|
)
|
|
$
|
131.1
|
|
Customer relationships
|
111.5
|
|
|
(6.7
|
)
|
|
104.8
|
|
|||
Patents and Internally-Developed IP
|
15.8
|
|
|
(1.3
|
)
|
|
14.5
|
|
|||
Total finite-lived intangible assets
|
$
|
269.4
|
|
|
$
|
(19.0
|
)
|
|
$
|
250.4
|
|
|
|
|
|
|
|
||||||
Indefinite-lived intangible assets:
|
|
|
|
|
|
||||||
Trade Names
|
$
|
109.7
|
|
|
|
|
$
|
109.7
|
|
||
Total indefinite-lived intangible assets
|
$
|
109.7
|
|
|
|
|
$
|
109.7
|
|
||
|
|
|
|
|
|
||||||
Total intangible assets
|
$
|
379.1
|
|
|
$
|
(19.0
|
)
|
|
$
|
360.1
|
|
|
September 30,
2014 |
|
December 31,
2013 |
||||
|
|
||||||
Sales returns and allowances
|
$
|
61.3
|
|
|
$
|
91.5
|
|
Compensation and related benefits
|
71.2
|
|
|
74.5
|
|
||
Advertising and promotional costs
|
48.1
|
|
|
42.9
|
|
||
Taxes
|
20.9
|
|
|
28.5
|
|
||
Interest
|
3.8
|
|
|
13.8
|
|
||
Restructuring reserve
|
12.2
|
|
|
13.7
|
|
||
Other
|
43.9
|
|
|
48.8
|
|
||
|
$
|
261.4
|
|
|
$
|
313.7
|
|
|
September 30,
2014 |
|
December 31, 2013
|
||||
Amended Term Loan Facility: Acquisition Term Loan due 2019, net of discounts
(a)
|
$
|
693.3
|
|
|
$
|
698.3
|
|
Amended Term Loan Facility: 2011 Term Loan due 2017, net of discounts
(a)
|
671.3
|
|
|
670.1
|
|
||
Amended Revolving Credit Facility
(b)
|
—
|
|
|
—
|
|
||
5¾% Senior Notes due 2021
(c)
|
500.0
|
|
|
500.0
|
|
||
Amended and Restated Senior Subordinated Term Loan due 2014
(d)
|
—
|
|
|
58.4
|
|
||
Spanish Government Loan due 2025
(e)
|
0.7
|
|
|
0.9
|
|
||
|
1,865.3
|
|
|
1,927.7
|
|
||
Less current portion
|
(7.0
|
)
|
|
(65.4
|
)
|
||
|
$
|
1,858.3
|
|
|
$
|
1,862.3
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
Numerator:
|
|
|
|
|
|
|
|
||||||||
Income from continuing operations, net of taxes
|
$
|
14.2
|
|
|
$
|
11.0
|
|
|
$
|
37.3
|
|
|
$
|
33.6
|
|
Income (loss) from discontinued operations, net of taxes
|
0.4
|
|
|
(1.5
|
)
|
|
0.9
|
|
|
(6.3
|
)
|
||||
Net income
|
$
|
14.6
|
|
|
$
|
9.5
|
|
|
$
|
38.2
|
|
|
$
|
27.3
|
|
Denominator:
|
|
|
|
|
|
|
|
||||||||
Weighted average common shares outstanding – Basic
|
52,356,798
|
|
|
52,356,798
|
|
|
52,356,798
|
|
|
52,356,798
|
|
||||
Effect of dilutive restricted stock
|
58,165
|
|
|
—
|
|
|
33,137
|
|
|
—
|
|
||||
Weighted average common shares outstanding – Diluted
|
52,414,963
|
|
|
52,356,798
|
|
|
52,389,935
|
|
|
52,356,798
|
|
||||
Basic earnings (loss) per common share:
|
|
|
|
|
|
|
|
||||||||
Continuing operations
|
$
|
0.27
|
|
|
$
|
0.21
|
|
|
$
|
0.71
|
|
|
$
|
0.64
|
|
Discontinued operations
|
0.01
|
|
|
(0.03
|
)
|
|
0.02
|
|
|
(0.12
|
)
|
||||
Net income
|
$
|
0.28
|
|
|
$
|
0.18
|
|
|
$
|
0.73
|
|
|
$
|
0.52
|
|
Diluted earnings (loss) per common share:
|
|
|
|
|
|
|
|
|
|||||||
Continuing operations
|
$
|
0.27
|
|
|
$
|
0.21
|
|
|
$
|
0.71
|
|
|
$
|
0.64
|
|
Discontinued operations
|
0.01
|
|
|
(0.03
|
)
|
|
0.02
|
|
|
(0.12
|
)
|
||||
Net income
|
$
|
0.28
|
|
|
$
|
0.18
|
|
|
$
|
0.73
|
|
|
$
|
0.52
|
|
|
Foreign Currency Translation
|
|
Actuarial (Loss) Gain on Post-retirement Benefits
|
|
Deferred Gain (Loss) - Hedging
|
|
Accumulated Other Comprehensive Loss
|
||||||||
Balance, January 1, 2014
|
$
|
19.2
|
|
|
$
|
(170.5
|
)
|
|
$
|
1.5
|
|
|
$
|
(149.8
|
)
|
Currency translation adjustment, net of tax benefit of $0.4 million
|
(17.1
|
)
|
|
—
|
|
|
—
|
|
|
(17.1
|
)
|
||||
Amortization of pension related costs, net of tax of nil
(a)
|
—
|
|
|
3.4
|
|
|
—
|
|
|
3.4
|
|
||||
Revaluation of derivative financial instrument, net of tax benefit of $1.4 million
(b)
|
—
|
|
|
—
|
|
|
(2.3
|
)
|
|
(2.3
|
)
|
||||
Other comprehensive income (loss)
|
(17.1
|
)
|
|
3.4
|
|
|
(2.3
|
)
|
|
(16.0
|
)
|
||||
Balance, September 30, 2014
|
$
|
2.1
|
|
|
$
|
(167.1
|
)
|
|
$
|
(0.8
|
)
|
|
$
|
(165.8
|
)
|
(a)
|
Amount represents the change in accumulated other comprehensive loss as a result of the amortization of unrecognized prior service costs and actuarial losses (gains) arising during each year related to the Company’s pension and other post-retirement plans. See Note 5, “Pension and Post-retirement Benefits,” for further discussion of the Company’s pension and other post-retirement plans.
|
(b)
|
For the
nine months ended September 30, 2014
, the 2013 Interest Rate Swap (as hereinafter defined) was deemed effective and therefore the changes in fair value related to the 2013 Interest Rate Swap are recorded in other comprehensive income. See Note 14, "Financial Instruments," for further discussion of the 2013 Interest Rate Swap.
|
•
|
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.
|
|
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)
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
2013 Interest Rate Swap
(b)
|
1.2
|
|
|
—
|
|
|
1.2
|
|
|
—
|
|
||||
Total liabilities at fair value
|
$
|
1.2
|
|
|
$
|
—
|
|
|
$
|
1.2
|
|
|
$
|
—
|
|
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Derivatives:
|
|
|
|
|
|
|
|
||||||||
FX Contracts
(a)
|
$
|
1.0
|
|
|
$
|
—
|
|
|
$
|
1.0
|
|
|
$
|
—
|
|
2013 Interest Rate Swap
(b)
|
2.5
|
|
|
—
|
|
|
2.5
|
|
|
—
|
|
||||
Total assets at fair value
|
$
|
3.5
|
|
|
$
|
—
|
|
|
$
|
3.5
|
|
|
$
|
—
|
|
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Derivatives:
|
|
|
|
|
|
|
|
||||||||
FX Contracts
(a)
|
$
|
0.2
|
|
|
$
|
—
|
|
|
$
|
0.2
|
|
|
$
|
—
|
|
Total liabilities at fair value
|
$
|
0.2
|
|
|
$
|
—
|
|
|
$
|
0.2
|
|
|
$
|
—
|
|
(a)
|
The fair value of the Company’s foreign currency forward exchange contracts ("FX Contracts") was measured based on observable market transactions of spot and forward rates on the respective dates. See Note 14, “Financial Instruments.”
|
(b)
|
The fair value of the Company's 2013 Interest Rate Swap was measured based on the implied forward rates from the U.S. Dollar three-month LIBOR yield curve on the respective dates. See Note 14, “Financial Instruments.”
|
|
Fair Value
|
|
|
||||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
|
Carrying Value
|
||||||||||
Liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Long-term debt, including current portion
|
$
|
—
|
|
|
$
|
1,837.3
|
|
|
$
|
—
|
|
|
$
|
1,837.3
|
|
|
$
|
1,865.3
|
|
|
Fair Value
|
|
|
||||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
|
Carrying Value
|
||||||||||
Liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Long-term debt, including current portion
|
$
|
—
|
|
|
$
|
1,931.9
|
|
|
$
|
—
|
|
|
$
|
1,931.9
|
|
|
$
|
1,927.7
|
|
(a)
|
Fair Values of Derivative Financial Instruments in Consolidated Balance Sheets:
|
|
Fair Values of Derivative Instruments
|
||||||||||||||||||
|
Assets
|
|
Liabilities
|
||||||||||||||||
|
Balance Sheet
|
|
September 30,
2014 |
|
December 31,
2013 |
|
Balance Sheet
|
|
September 30,
2014 |
|
December 31,
2013 |
||||||||
|
Classification
|
|
Fair Value
|
|
Fair Value
|
|
Classification
|
|
Fair Value
|
|
Fair Value
|
||||||||
Derivatives designated as hedging instruments:
|
|
|
|
|
|
|
|
|
|||||||||||
2013 Interest Rate Swap
(i)
|
Prepaid expenses and other
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Accrued expenses and other
|
|
$
|
1.0
|
|
|
$
|
—
|
|
|
Other assets
|
|
—
|
|
|
2.5
|
|
|
Other long-term liabilities
|
|
0.2
|
|
|
—
|
|
||||
Derivatives not designated as hedging instruments:
|
|
|
|
|
|
|
|
|
|||||||||||
FX Contracts
(ii)
|
Prepaid expenses and other
|
|
$
|
0.6
|
|
|
$
|
1.0
|
|
|
Accrued Expenses
|
|
$
|
—
|
|
|
$
|
0.2
|
|
|
Amount of Gain (Loss) Recognized in Other Comprehensive Income
|
|||||||||||||||
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||||
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||||
Derivatives designated as hedging instruments:
|
|
|
|
|
|
|
|
|||||||||
2013 Interest Rate Swap, net of tax
(a)
|
$
|
0.6
|
|
|
$
|
—
|
|
|
$
|
(2.3
|
)
|
|
$
|
—
|
|
(a)
|
Net of tax expense (benefit) of
$0.4 million
and
$(1.4) million
for the three and nine months ended
September 30, 2014
, respectively.
|
|
Income Statement Classification
|
|
Amount of Gain (Loss) Recognized in Net Income
|
|||||||||||||||
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
|||||||||||||||
|
2014
|
|
2013
|
|
2014
|
|
2013
|
|||||||||||
Derivatives not designated as hedging instruments:
|
|
|
|
|
|
|
|
|
||||||||||
FX Contracts
|
Foreign currency losses (gains), net
|
|
$
|
1.5
|
|
|
$
|
(1.0
|
)
|
|
$
|
0.2
|
|
|
$
|
1.3
|
|
1.
|
Manage financial drivers for value creation.
We are focused on gross profit margin expansion, which includes optimizing price, as well as allocating sales allowances to maximize our return on trade spending. We also continue to focus on reducing costs across our global supply chain. In addition, we are focused on eliminating non-value added general and administrative costs in order to fund reinvestment to facilitate growth.
|
2.
|
Grow our global brands through exceptional innovation and effective brand support
. We are focused on creating fewer, bigger and better innovations across our brands that are relevant, unique, impactful and distinctive. We want to continue to build strong brands by focusing on high-quality, consumer-preferred offerings; effective consumer communication; increased levels of effective advertising and promotion; and superb execution and collaboration with our customers.
|
3.
|
Pursue growth opportunities.
We are focused on pursuing organic growth opportunities within our existing brand portfolio and existing channels, as well as seeking acquisition opportunities that complement our portfolio. We are also focused on exploring opportunities to expand our geographical presence in key markets, as appropriate.
|
4.
|
Improve cash flow.
We are focused on improving our cash flows through, among other things, continued effective management of our working capital and by focusing on appropriate return on capital spending.
|
•
|
$95.7 million
of higher gross profit due to a
$139.2 million
increase in consolidated net sales, partially offset by a
$43.5 million
increase in cost of sales, both of which were primarily driven by the inclusion of net sales and cost of sales as a result of the Colomer Acquisition;
|
•
|
$87.7 million
of higher selling general and administrative ("SG&A") expenses primarily driven by the inclusion of SG&A expenses as a result of the Colomer Acquisition.
|
•
|
$299.1 million
of higher gross profit due to a
$436.3 million
increase in consolidated net sales, partially offset by a
$137.2 million
increase in cost of sales, both of which were primarily driven by the inclusion of net sales and cost of sales as a result of the Colomer Acquisition; and
|
•
|
a $
28.1 million
aggregate loss on early extinguishment of debt recognized in the first nine months of 2013 primarily due to the 2013 Senior Notes Refinancing (as hereinafter defined), compared to an aggregate loss on early extinguishment of debt of
$2.0 million
in the first nine months of 2014 primarily due to the February 2014 Term Loan Amendment (as hereinafter defined);
|
•
|
$279.6 million
of higher SG&A expenses primarily driven by the inclusion of SG&A expenses as a result of the Colomer Acquisition;
|
•
|
$16.3 million
of higher restructuring charges and other, net related to continuing operations, primarily related to the Integration Program (as hereinafter defined);
|
•
|
$14.7 million
of higher foreign currency losses, net, partially due to the $6.0 million foreign currency loss recognized in the first nine months of 2014 as a result of the re-measurement of Revlon Venezuela's balance sheet; and
|
•
|
$13.1 million
of higher interest expense primarily due to higher average debt as a result of the Colomer Acquisition.
|
•
|
Restructuring and related costs
: The Company expects total restructuring and related charges for the Integration Program of approximately
$26 million
. During the first nine months of 2014, the Company recorded charges totaling
$17.1 million
related to restructuring and related actions under the Integration Program, of which
$16.4 million
was recorded in restructuring charges and other, net,
$0.2 million
was recorded in cost of sales and
$0.5 million
was recorded in SG&A expenses. Approximately
$4 million
of charges are expected to be recognized during the remainder of 2014 and any remaining charges to be recognized in 2015. The Company expects cash payments related to the restructuring and related charges in connection with the Integration Program will total approximately
$25 million
, of which
$6.4 million
was paid in the first nine months of 2014, approximately
$7 million
is expected to be paid during the remainder of 2014, with the majority of the remaining balance expected to be paid in 2015.
|
•
|
Non-restructuring integration costs
: $
12.5 million
and
$4.9 million
of non-restructuring integration costs recognized in 2013 and for the first nine months of 2014, respectively. Such costs have been reflected within acquisition and integration costs in the Company's Consolidated Statements of Income and Comprehensive Income related to combining Colomer’s operations into the Company’s business.
|
•
|
Capital Expenditures
: Expected integration-related capital expenditures of approximately
$7 million
,
$3.3 million
of which was paid in the first nine months of 2014. The Company expects approximately
$1.9 million
to be paid during the remainder of 2014, with the remaining balance expected to be paid in 2015.
|
•
|
February 2014 Term Loan Amendment
:
In February 2014, Products Corporation entered into an amendment (the “February 2014 Term Loan Amendment”) to its amended term loan agreement, which is comprised of (i) the
$675.0 million
term loan due November 19, 2017 (the "2011 Term Loan") and (ii) the $700.0 million term loan due October 8, 2019 (the "Acquisition Term Loan"), which has
$694.8 million
in aggregate principal balance outstanding as of September 30, 2014 (together, the "Amended Term Loan Agreement"). The February 2014 Term Loan Amendment reduced the interest rates applicable to Eurodollar Loans under the 2011 Term Loan to the Eurodollar Rate plus
2.5%
per annum, with the Eurodollar Rate not to be less than
0.75%
, and interest rates applicable to Alternate Base Rate Loans under the 2011 Term Loan to the Alternate Base Rate plus
1.5%
, with the Alternate Base Rate not to be less than
1.75%
.
|
•
|
Repayment of Non-Contributed Loan
:
On May 1, 2014, Products Corporation used available cash on hand to optionally prepay in full the remaining $
58.4 million
principal amount outstanding under the non-contributed loan portion of the Amended and Restated Senior Subordinated Term Loan Agreement (the "Non-Contributed Loan") that remained owing from Products Corporation to various third parties. The Non-Contributed Loan would have otherwise matured on October 8, 2014.
|
•
|
The Consumer segment is comprised of the Company's consumer brands, which primarily include
Revlon
,
Almay
,
SinfulColors
and
Pure Ice
in color cosmetics;
Revlon ColorSilk
in women’s hair color;
Revlon
in beauty tools; and
Mitchum
in anti-perspirant deodorants. The Company’s principal customers for its consumer products include the mass retail channel in the U.S. and internationally, consisting of large mass volume retailers and chain drug and food stores in the U.S., as well as certain department stores and other specialty stores, such as perfumeries, outside the U.S. The Consumer segment also includes a skincare line and a hair color line sold in the mass retail channel, primarily in Spain, which was acquired as part of the Colomer Acquisition.
|
•
|
The Professional segment is comprised primarily of the brands which the Company acquired in the Colomer Acquisition, which include
Revlon Professional
in hair color and hair care;
CND
-
branded products
in nail polishes
|
|
Net Sales
|
|
Segment Profit
|
|||||||||||||||||||||||||||||||||
|
Three Months Ended September 30,
|
|
Change
|
|
XFX Change
(a)
|
|
Three Months Ended September 30,
|
|
Change
|
|||||||||||||||||||||||||||
|
2014
|
|
2013
|
|
$
|
|
%
|
|
$
|
|
%
|
|
2014
|
|
2013
|
|
$
|
|
%
|
|||||||||||||||||
Consumer
|
$
|
348.2
|
|
|
$
|
333.1
|
|
|
$
|
15.1
|
|
|
4.5
|
%
|
|
$
|
25.2
|
|
|
7.6
|
%
|
|
$
|
78.1
|
|
|
$
|
78.9
|
|
|
$
|
(0.8
|
)
|
|
(1.0
|
)%
|
Professional
|
124.1
|
|
|
—
|
|
|
124.1
|
|
|
—
|
|
|
124.1
|
|
|
—
|
|
|
25.2
|
|
|
—
|
|
|
25.2
|
|
|
—
|
|
|||||||
Total Net Sales
|
$
|
472.3
|
|
|
$
|
333.1
|
|
|
$
|
139.2
|
|
|
41.8
|
%
|
|
$
|
149.3
|
|
|
44.8
|
%
|
|
$
|
103.3
|
|
|
$
|
78.9
|
|
|
$
|
24.4
|
|
|
30.9
|
%
|
|
Net Sales
|
|
Segment Profit
|
|||||||||||||||||||||||||||||||||
|
Nine Months Ended September 30,
|
|
Change
|
|
XFX Change
(a)
|
|
Nine Months Ended September 30,
|
|
Change
|
|||||||||||||||||||||||||||
|
2014
|
|
2013
|
|
$
|
|
%
|
|
$
|
|
%
|
|
2014
|
|
2013
|
|
$
|
|
%
|
|||||||||||||||||
Consumer
|
$
|
1,055.0
|
|
|
$
|
1,003.7
|
|
|
$
|
51.3
|
|
|
5.1
|
%
|
|
$
|
77.2
|
|
|
7.7
|
%
|
|
$
|
232.0
|
|
|
$
|
240.2
|
|
|
$
|
(8.2
|
)
|
|
(3.4
|
)%
|
Professional
|
385.0
|
|
|
—
|
|
|
385.0
|
|
|
—
|
|
|
385.0
|
|
|
—
|
|
|
88.5
|
|
|
—
|
|
|
88.5
|
|
|
—
|
|
|||||||
Total Net Sales
|
$
|
1,440.0
|
|
|
$
|
1,003.7
|
|
|
$
|
436.3
|
|
|
43.5
|
%
|
|
$
|
462.2
|
|
|
46.0
|
%
|
|
$
|
320.5
|
|
|
$
|
240.2
|
|
|
$
|
80.3
|
|
|
33.4
|
%
|
|
Three Months Ended September 30,
|
|
Change
|
|
XFX Change
(a)
|
||||||||||||||||
|
2014
|
|
2013
|
|
$
|
|
%
|
|
$
|
|
%
|
||||||||||
United States
|
$
|
243.8
|
|
|
$
|
185.8
|
|
|
$
|
58.0
|
|
|
31.2
|
%
|
|
$
|
58.0
|
|
|
31.2
|
%
|
International
|
228.5
|
|
|
147.3
|
|
|
81.2
|
|
|
55.1
|
%
|
|
91.3
|
|
|
62.0
|
%
|
||||
Total Net Sales
|
$
|
472.3
|
|
|
$
|
333.1
|
|
|
$
|
139.2
|
|
|
41.8
|
%
|
|
$
|
149.3
|
|
|
44.8
|
%
|
|
Nine Months Ended September 30,
|
|
Change
|
|
XFX Change
(a)
|
||||||||||||||||
|
2014
|
|
2013
|
|
$
|
|
%
|
|
$
|
|
%
|
||||||||||
United States
|
$
|
749.2
|
|
|
$
|
581.8
|
|
|
$
|
167.4
|
|
|
28.8
|
%
|
|
$
|
167.4
|
|
|
28.8
|
%
|
International
|
690.8
|
|
|
421.9
|
|
|
268.9
|
|
|
63.7
|
%
|
|
294.8
|
|
|
69.9
|
%
|
||||
Total Net Sales
|
$
|
1,440.0
|
|
|
$
|
1,003.7
|
|
|
$
|
436.3
|
|
|
43.5
|
%
|
|
$
|
462.2
|
|
|
46.0
|
%
|
|
Three Months Ended September 30,
|
|
|
|
Nine Months Ended September 30,
|
|
|
||||||||||||||||
|
2014
|
|
2013
|
|
Change
|
|
2014
|
|
2013
|
|
Change
|
||||||||||||
Gross profit
|
$
|
307.7
|
|
|
$
|
212.0
|
|
|
$
|
95.7
|
|
|
$
|
944.7
|
|
|
$
|
645.6
|
|
|
$
|
299.1
|
|
Percentage of net sales
|
65.1
|
%
|
|
63.6
|
%
|
|
1.5
|
%
|
|
65.6
|
%
|
|
64.3
|
%
|
|
1.3
|
%
|
•
|
the inclusion of gross profit from the October 2013 Colomer Acquisition, which increased gross profit by $94.3 million and increased gross profit as a percentage of net sales by 0.2 percentage points;
|
•
|
the favorable impact of returns accrual adjustments made in the third quarter 2014, due to lower expected discontinued products in the future related to the Company's strategy to focus on fewer, bigger and better innovations, which increased gross profit by $8.1 million and increased gross profit as a percentage of net sales by 0.8 percentage points; and
|
•
|
favorable sales mix within the Consumer segment, which increased gross profit by $3.0 million and increased gross profit as a percentage of net sales by 0.9 percentage points;
|
•
|
unfavorable foreign currency fluctuations, which reduced gross profit by $7.1 million, with a de minimis impact to gross profit as a percentage of net sales; and
|
•
|
higher allowances, which reduced gross profit by $2.7 million and decreased gross profit as a percentage of net sales by 0.4 percentage points.
|
•
|
the inclusion of gross profit from the October 2013 Colomer Acquisition, which increased gross profit by $295.6 million and increased gross profit as a percentage of net sales by 0.8 percentage points;
|
•
|
the favorable impact of returns accrual adjustments in the first nine months of 2014, net of related inventory write-off charges, due to lower expected discontinued products in the future related to the Company's strategy to focus on fewer, bigger and better innovations, which increased gross profit by $12.1 million and increased gross profit as a percentage of net sales by 0.2 percentage points;
|
•
|
favorable volume, which increased gross profit by $8.5 million, with no impact on gross profit as a percentage of net sales; and
|
•
|
favorable sales mix within the Consumer segment, which increased gross profit by $8.1 million and increased gross profit as a percentage of net sales by 0.8 percentage points;
|
•
|
unfavorable foreign currency fluctuations, which reduced gross profit by $19.4 million and reduced gross profit as a percentage of net sales by 0.3 percentage points; and
|
•
|
higher allowances, which reduced gross profit by $6.8 million and decreased gross profit as a percentage of net sales by 0.3 percentage points.
|
|
Three Months Ended September 30,
|
|
|
|
Nine Months Ended September 30,
|
|
|
||||||||||||||||
|
2014
|
|
2013
|
|
Change
|
|
2014
|
|
2013
|
|
Change
|
||||||||||||
SG&A expenses
|
$
|
251.8
|
|
|
$
|
164.1
|
|
|
$
|
(87.7
|
)
|
|
$
|
761.6
|
|
|
$
|
482.0
|
|
|
$
|
(279.6
|
)
|
•
|
the inclusion of SG&A expenses as a result of the Colomer Acquisition, commencing on the Acquisition Date, which contributed $70.7 million to the increase in SG&A expenses;
|
•
|
$12.4 million of higher general and administrative expenses, primarily due to higher incentive compensation expense driven by a lower accrual in the third quarter of 2013 based on the Company's anticipated achievement for full year 2013 at that time, and higher stock-based compensation, as well as higher occupancy costs due to overlapping rents as a result of the Company's move to its new New York headquarters during the third quarter of 2014; and
|
•
|
$3.8 million of higher advertising expenses to support the Company's brands within the Consumer segment;
|
•
|
$3.5 million of favorable impact of foreign currency fluctuations.
|
•
|
the inclusion of SG&A expenses as a result of the Colomer Acquisition, commencing on the Acquisition Date, which contributed $222.6 million to the increase in SG&A expenses;
|
•
|
a $26.4 million gain from insurance proceeds in the first nine months of 2013 due to the settlement of the Company's claim for the loss of inventory from the fire that destroyed the Company's facility in Venezuela, partially offset by an accrual in the first nine months of 2013 of $4.5 million for estimated clean-up costs related to the destroyed facility, both of which did not recur in the first nine months of 2014;
|
•
|
$23.9 million of higher advertising expenses to support the Company's brands within the Consumer segment; and
|
•
|
$12.6 million of higher general and administrative expenses, primarily due to higher incentive compensation expense driven by a lower accrual in the first nine months of 2013 based on the Company's anticipated achievement for full year 2013 at that time, and higher stock-based compensation, as well as higher occupancy costs due to overlapping rents as a result of the Company's move to its new New York headquarters during the third quarter of 2014;
|
•
|
$10.2 million of favorable impact of foreign currency fluctuations.
|
|
Three Months Ended September 30,
|
|
|
|
Nine Months Ended September 30,
|
|
|
||||||||||||||||
|
2014
|
|
2013
|
|
Change
|
|
2014
|
|
2013
|
|
Change
|
||||||||||||
Acquisition and integration costs
|
$
|
0.9
|
|
|
$
|
5.9
|
|
|
$
|
5.0
|
|
|
$
|
5.4
|
|
|
$
|
6.3
|
|
|
$
|
0.9
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
Acquisition costs
|
$
|
0.1
|
|
|
$
|
5.9
|
|
|
$
|
0.5
|
|
|
$
|
6.3
|
|
Integration costs
|
0.8
|
|
|
—
|
|
|
4.9
|
|
|
—
|
|
||||
Total acquisition and integration costs
|
$
|
0.9
|
|
|
$
|
5.9
|
|
|
$
|
5.4
|
|
|
$
|
6.3
|
|
|
Three Months Ended September 30,
|
|
|
|
Nine Months Ended September 30,
|
|
|
||||||||||||||||
|
2014
|
|
2013
|
|
Change
|
|
2014
|
|
2013
|
|
Change
|
||||||||||||
Restructuring charges and other, net
|
$
|
0.8
|
|
|
$
|
(1.5
|
)
|
|
$
|
(2.3
|
)
|
|
$
|
18.1
|
|
|
$
|
1.8
|
|
|
$
|
(16.3
|
)
|
|
Three Months Ended September 30,
|
|
|
|
Nine Months Ended September 30,
|
|
|
||||||||||||||||
|
2014
|
|
2013
|
|
Change
|
|
2014
|
|
2013
|
|
Change
|
||||||||||||
Interest expense
|
$
|
20.6
|
|
|
$
|
16.2
|
|
|
$
|
(4.4
|
)
|
|
$
|
63.9
|
|
|
$
|
50.8
|
|
|
$
|
(13.1
|
)
|
Interest expense - preferred stock dividends
|
$
|
—
|
|
|
$
|
1.7
|
|
|
$
|
1.7
|
|
|
—
|
|
|
4.9
|
|
|
4.9
|
|
|
Three Months Ended September 30,
|
|
|
|
Nine Months Ended September 30,
|
|
|
||||||||||||||||
|
2014
|
|
2013
|
|
Change
|
|
2014
|
|
2013
|
|
Change
|
||||||||||||
Loss on early extinguishment of debt
|
$
|
—
|
|
|
$
|
0.2
|
|
|
$
|
0.2
|
|
|
$
|
2.0
|
|
|
$
|
28.1
|
|
|
$
|
26.1
|
|
|
Three Months Ended September 30,
|
|
|
|
Nine Months Ended September 30,
|
|
|
||||||||||||||||
|
2014
|
|
2013
|
|
Change
|
|
2014
|
|
2013
|
|
Change
|
||||||||||||
Foreign currency losses, net
|
$
|
9.3
|
|
|
$
|
0.4
|
|
|
$
|
(8.9
|
)
|
|
$
|
17.9
|
|
|
$
|
3.2
|
|
|
$
|
(14.7
|
)
|
•
|
the unfavorable impact of the revaluation of certain U.S. Dollar denominated intercompany payables during the third quarter of 2014, compared to the third quarter of 2013.
|
•
|
the unfavorable impact of the revaluation of certain U.S. Dollar denominated intercompany payables and foreign currency denominated intercompany receivables during the first nine months of 2014, compared to the first nine months of 2013; and
|
•
|
a $6.0 million foreign currency loss related to the required re-measurement of Revlon Venezuela's balance sheet during the second quarter of 2014.
|
|
Three Months Ended September 30,
|
|
|
|
Nine Months Ended September 30,
|
|
|
||||||||||||||||
|
2014
|
|
2013
|
|
Change
|
|
2014
|
|
2013
|
|
Change
|
||||||||||||
Provision for income taxes
|
$
|
8.7
|
|
|
$
|
12.1
|
|
|
$
|
3.4
|
|
|
$
|
34.2
|
|
|
$
|
30.3
|
|
|
$
|
(3.9
|
)
|
|
Nine Months Ended September 30,
|
||||||
|
2014
|
|
2013
|
||||
Net cash provided by operating activities
|
$
|
46.7
|
|
|
$
|
5.8
|
|
Net cash used in investing activities
|
(29.4
|
)
|
|
(1.4
|
)
|
||
Net cash (used in) provided by financing activities
|
(70.7
|
)
|
|
22.7
|
|
||
Effect of exchange rate changes on cash and cash equivalents
|
(12.3
|
)
|
|
(4.1
|
)
|
•
|
the repayment of the $58.4 million aggregate principal amount outstanding of the Non-Contributed Loan;
|
•
|
$5.3 million of scheduled amortization payments on the Acquisition Term Loan;
|
•
|
$3.1 million of short-term borrowings and overdraft; and
|
•
|
the payment of $1.8 million of financing costs primarily related to the February 2014 Term Loan Amendment.
|
•
|
Products Corporation's issuance of the $500.0 million aggregate principal amount of the 5¾% Senior Notes at par;
|
•
|
the repayment and redemption of all of the $330.0 million aggregate principal amount outstanding of Products Corporation's 9¾% Senior Secured Notes in connection with the 2013 Senior Notes Refinancing;
|
•
|
the repayment of the $113.0 million in principal on the 2011 Term Loan in connection with the consummation of the February 2013 Term Loan Amendments; and
|
•
|
the payment of $32.7 million of financing costs comprised of: (i) $17.5 million of redemption and tender offer premiums, as well as fees and expenses related to the repayment and redemption of all of the $330.0 million aggregate principal amount outstanding of the 9¾% Senior Secured Notes; (ii) $10.1 million of underwriters' fees and other fees in connection with the issuance of the 5¾% Senior Notes; (iii) $1.2 million of fees incurred in connection with the February 2013 Term Loan Amendments; (iv) $1.9 million of fees incurred in connection with the August 2013 Term Loan Amendments; (v) $1.6 million of fees incurred in connection with the Incremental Amendment; and (vi) $0.4 million of fees incurred in connection with the August 2013 Revolver Amendment.
|
|
|
Payments Due by Period
(dollars in millions) |
|||||||||||||
Contractual Obligations
|
|
Total
|
|
2014 Q4
|
|
2015-2016
|
|
2017-2018
|
|
After 2018
|
|||||
Interest on long-term debt
(a)
|
|
404.5
|
|
|
12.9
|
|
|
164.7
|
|
|
138.0
|
|
|
88.9
|
|
(a)
|
Consists of interest through the respective maturity dates on (i) the
$694.8 million
aggregate principal amount outstanding under the Acquisition Term Loan; (ii) the
$675.0 million
in aggregate principal amount outstanding under the 2011 Term Loan; and (iii) the $500.0 million in aggregate principal amount of the 5¾% Senior Notes, in each case, based on interest rates under such debt agreements as of
September 30, 2014
. For a discussion of the 2013 Interest Rate Swap, see "Interest Rate Swap Transaction" above.
|
|
Expected Maturity Date for the year ended December 31,
|
|
|
||||||||||||||||||||||||||||
|
(dollars in millions, except for rate information)
|
|
|
||||||||||||||||||||||||||||
|
2014
|
|
2015
|
|
2016
|
|
2017
|
|
2018
|
|
Thereafter
|
|
Total
|
|
Fair Value September 30, 2014
|
||||||||||||||||
Debt
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Short-term variable rate (various currencies)
|
$
|
6.1
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
6.1
|
|
|
$
|
6.1
|
|
||||||||||
Average interest rate
(a)
|
4.8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Short-term fixed rate (third party - EUR)
|
1.8
|
|
|
|
|
|
|
|
|
|
|
|
|
1.8
|
|
|
1.8
|
|
|||||||||||||
Average interest rate
|
11.9
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Long-term fixed rate – third party (USD)
|
|
|
|
|
|
|
|
|
|
|
$
|
500.0
|
|
|
500.0
|
|
|
490.0
|
|
||||||||||||
Average interest rate
|
|
|
|
|
|
|
|
|
|
|
5.75
|
%
|
|
|
|
|
|||||||||||||||
Long-term fixed rate – third party (EUR)
|
|
|
|
|
$
|
0.1
|
|
|
$
|
0.1
|
|
|
$
|
0.1
|
|
|
0.4
|
|
|
0.7
|
|
|
0.7
|
|
|||||||
Average interest rate
|
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
|
||||||||||||
Long-term variable rate – third party (USD)
|
1.8
|
|
(b)
|
$
|
7.0
|
|
|
7.0
|
|
|
682.0
|
|
|
7.0
|
|
|
665.0
|
|
|
1,369.8
|
|
|
1,346.6
|
|
|||||||
Average interest rate
(a)(c)
|
4.0
|
%
|
|
4.0
|
%
|
|
4.2
|
%
|
|
4.0
|
%
|
|
5.0
|
%
|
|
5.3
|
%
|
|
|
|
|
||||||||||
Total debt
|
$
|
9.7
|
|
|
$
|
7.0
|
|
|
$
|
7.1
|
|
|
$
|
682.1
|
|
|
$
|
7.1
|
|
|
$
|
1,165.4
|
|
|
$
|
1,878.4
|
|
|
$
|
1,845.2
|
|
(a)
|
Weighted average variable rates are based upon implied forward rates from the U.S. Dollar LIBOR and Euribor yield curves at
September 30, 2014
.
|
(b)
|
Includes quarterly amortization payments required under the Acquisition Term Loan.
|
(c)
|
At
September 30, 2014
, the Acquisition Term Loan bears interest at the Eurodollar Rate (as defined in the Amended Term Loan Agreement) plus 3.00% per annum (with the Eurodollar Rate not to be less than 1.00%). As a result of the February 2014 Term Loan Amendment, the 2011 Term Loan bears interest at the Eurodollar Rate plus 2.5% per annum (with the Eurodollar Rate not to be less than 0.75%). For discussion of the February 2014 Term Loan Amendment, which reduced interest rates on the 2011 Term Loan, refer to Note 10, "Long-Term Debt," to the Unaudited Consolidated Financial Statements in this Form 10-Q.
|
Forward Contracts (“FC”)
|
|
Average Contractual Rate
$/FC
|
|
Original US Dollar Notional Amount
|
|
Contract Value
September 30, 2014
|
|
Asset Fair Value September 30, 2014
|
||||||
Sell Australian Dollars/Buy USD
|
|
0.8999
|
|
$
|
5.9
|
|
|
$
|
6.1
|
|
|
$
|
0.2
|
|
Sell Canadian Dollars/Buy USD
|
|
0.9101
|
|
5.4
|
|
|
5.5
|
|
|
0.1
|
|
|||
Sell Japanese Yen/Buy USD
|
|
0.0097
|
|
3.6
|
|
|
3.8
|
|
|
0.2
|
|
|||
Buy Australian Dollars/Sell NZ Dollars
|
|
1.0850
|
|
1.8
|
|
|
1.9
|
|
|
0.1
|
|
|||
Sell South African Rand/Buy USD
|
|
0.0907
|
|
1.3
|
|
|
1.3
|
|
|
—
|
|
|||
Sell New Zealand Dollars/Buy USD
|
|
0.8137
|
|
0.6
|
|
|
0.6
|
|
|
—
|
|
|||
Sell Hong Kong Dollars/Buy USD
|
|
0.1290
|
|
0.4
|
|
|
0.4
|
|
|
—
|
|
|||
Sell USD/Buy Euros
|
|
1.2980
|
|
0.3
|
|
|
0.3
|
|
|
—
|
|
|||
Sell Danish Krone/Buy Euros
|
|
7.4570
|
|
0.3
|
|
|
0.3
|
|
|
—
|
|
|||
Sell Canadian Dollars/Buy Euros
|
|
1.4250
|
|
0.2
|
|
|
0.2
|
|
|
—
|
|
|||
Total forward contracts
|
|
|
|
$
|
19.8
|
|
|
$
|
20.4
|
|
|
$
|
0.6
|
|
(i)
|
the Company's future financial performance;
|
(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 either the Consumer or Professional segment; adverse changes in currency exchange rates, 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, changes in consumer purchasing
|
(iii)
|
the Company's belief that the continued execution of its business strategy 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, 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 integration of the Colomer Acquisition (including the Company’s plans to integrate the operations of Colomer into the Company’s business and its expectations that the Integration Program will deliver cost reductions throughout the combined organization by generating cost synergies and operating efficiencies within the Company's global supply chain and consolidating offices and back office support, and other actions designed to reduce selling, general and administrative expenses, and achieve approximately $30 million to $35 million of annualized cost reductions by the end of 2015, with approximately $10 million to $15 million of these cost reductions expected to benefit 2014 results, while recognizing approximately $50 million, in the aggregate over 2013 through 2015, of total restructuring charges, capital expenditures (including expected integration-related capital expenditures of approximately $7 million, $3.3 million of which was paid in the first nine months of 2014, approximately $1.9 million is expected to be paid during the remainder of 2014 and the remaining balance in 2015) and related non-restructuring costs, any of which, the intended purpose of which 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 cash on hand, funds available under the Amended Revolving Credit Facility and/or other permitted additional sources of capital, which actions could increase the Company’s total debt;
|
(iv)
|
the Company’s vision to establish Revlon as the quintessential and most innovative beauty company in the world by offering products that make consumers feel attractive and beautiful and to inspire its consumers to express themselves boldly and confidently; and the Company's expectations regarding its strategic goal to optimize the market and financial performance of its portfolio of brands and assets by: (a) managing financial drivers for value creation by being focused on gross profit margin expansion, which includes optimizing price, as well as allocating sales allowances to maximize our return on trade spending, continuing to focus on reducing costs across our global supply chain and focusing on eliminating non-value added general and administrative costs in order to fund reinvestment to facilitate growth; (b) growing our global brands through exceptional innovation and effective brand support by being focused on creating fewer, bigger and better innovations across our brands that are relevant, unique, impactful and distinctive; wanting to continue to build strong brands by focusing on high-quality, consumer-preferred offerings; effective consumer communication; increased levels of effective advertising and promotion; and superb execution and collaboration with our customers; (c) pursuing growth opportunities by being focused on pursuing organic growth opportunities within our existing brand portfolio and existing channels, as well as seeking acquisition opportunities that complement our portfolio and being focused on exploring opportunities to expand our geographical presence in key markets, as appropriate; and (d) improve cash flow by being focused on improving our cash flows through, among other things, continued effective management of our working capital and by focusing on appropriate return on capital spending;
|
(v)
|
the effect of restructuring activities, restructuring costs and charges, the timing of restructuring payments and the benefits from such activities; including, without limitation, the Company’s expectation (i) that total restructuring and related charges related to the Integration Program will be approximately $26 million, with approximately $4.0 million of charges expected to be recognized during the remainder of 2014 and any remaining charges to be recognized in 2015; (ii) that cash payments related to the restructuring and related charges in connection with the Integration Program will total approximately $25 million, of which $6.4 million was paid in the first nine months of 2014, approximately $7 million is expected to be paid during the remainder of 2014 and the majority of the remaining balance is expected to be paid in 2015; (iii) that net cash payments related to the September 2012 Program will total approximately $25 million, of which $21.1 million was paid cumulatively through December 31, 2013, $3.2 million was paid during the nine months ended September 30, 2014, and the balance is expected to be paid during the remainder of 2014; (iv) that total restructuring and related charges under the December 2013 Program will be approximately $18.9 million; (v) that cash payments will total approximately $17 million related to the December 2013 Program, of which $0.1 million was paid in 2013, $15.1 million was paid during the nine months ended
|
(vi)
|
the Company’s expectation that operating revenues, cash on hand and funds available for borrowing under Products Corporation's Amended Revolving Credit Facility and other permitted lines of credit will be sufficient to enable the Company to cover its operating expenses for 2014, including the cash requirements referred to in item (viii) below, and the Company's beliefs that (a) the cash generated by its domestic operations and availability under the Amended Revolving Credit Facility and other permitted lines of credit should be sufficient to meet its domestic liquidity needs for at least the next twelve months, and (b) restrictions 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 Amended Revolving 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 the payment of operating expenses, including expenses in connection with the continued execution of the Company’s business strategy; integration costs related to the Colomer Acquisition; 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; debt and/or equity repurchases, if any; costs related to litigation; and payments in connection with discontinuing non-core business lines and/or exiting certain territories (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, in privately negotiated transactions or otherwise and may seek to refinance some or all of its indebtedness based upon market conditions and that any 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 Company's market-risk sensitive instruments, as well as the Company’s expectations as to the counterparty’s performance, including that any risk of loss under its derivative instruments arising from any non-performance by any of the counterparties is remote;
|
(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 and accounts payable; and controls on general and administrative spending; 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, including, without limitation, the Company's expectation to have net periodic benefit income of approximately $(5) million for its pension and other post-retirement benefit plans for all of 2014;
|
(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;
|
(xiii)
|
the Company's expectation that it will decide whether to exchange Bolivars for U.S. Dollars to the extent permitted through the CENCOEX, SICAD and/or SICAD II markets based on its ability to participate in those markets and to the extent reasonable for its business in the future, the Company's belief that current or additional governmental restrictions, worsening import authorization controls, price and profit controls or labor unrest in Venezuela could have further adverse impacts on the Company's business and results of operations and the Company's expectation that use of the SICAD II Rate in lieu of the official rate to translate Revlon Venezuela's financial statements will have a negative impact on Revlon Venezuela's results of operations going forward;
|
(xiv)
|
the Company’s belief that while 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, financial condition and/or its results of operations, 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; and
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(xv)
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the Company’s beliefs and expectations regarding certain benefits of the Colomer Acquisition, including that it provides the Company with broad brand, geographic and channel diversification and substantially expands the Company's business, providing both distribution into new channels and cost synergy opportunities.
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(i)
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unanticipated circumstances or results affecting the Company's financial performance, including decreased consumer spending in response to weak economic conditions or weakness in the consumption of beauty care products in either the Consumer or Professional segment; adverse changes in currency exchange rates, 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; 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 shopping channels; 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 restructuring costs, acquisition and integration costs related to the Colomer Acquisition; 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 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 inventory management and greater than anticipated space reconfigurations or reductions in display space and/or product discontinuances or a greater than expected impact from pricing or promotional strategies by the Company's customers; and changes in the competitive environment and actions by the Company's competitors, including business combinations, technological breakthroughs, new product offerings, increased advertising, promotional and marketing spending and advertising, promotional and/or marketing successes by competitors;
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(ii)
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in addition to the items discussed in (i) above, the effects of and changes in economic conditions (such as continued volatility in the financial markets, inflation, monetary conditions and foreign currency fluctuations, 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);
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(iii)
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unanticipated costs or difficulties or delays in completing projects associated with the continued execution of the Company’s business strategy or lower than expected revenues or the inability to create value through improving our financial performance as a result of such strategy, 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, divesting or discontinuing non-core business lines (which may include exiting certain territories), 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 integration of the Colomer Acquisition (including difficulties or delays in and/or the Company’s inability to integrate the Colomer business which could result in less than expected cost reductions, more than expected costs to achieve the expected cost reductions or delays in achieving the expected cost reductions and/or less than expected benefits from the Integration Program, more than expected costs in implementing such program and/or difficulties or delays, in whole or in part, in executing
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(iv)
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difficulties, delays or unanticipated costs in achieving the Company’s strategic goals and vision, including due to factors such as (a) difficulties, delays or the Company's inability to build its strong brands, such as due to less than effective product development, less than expected acceptance of its new or existing products by consumers, salon professionals and/or customers in the Consumer or Professional segments, less than expected acceptance of its advertising, promotional and/or marketing plans and/or brand communication by consumers, salon professionals and/or customers in the Consumer or Professional segments, less than expected investment in advertising, promotional and/or marketing activities or greater than expected competitive investment, less than expected levels of advertising, promotional and/or marketing activities for its new product launches and/or less than expected levels of execution with its customers in the Consumer or Professional segments or higher than expected costs and expenses; (b) difficulties, delays in or less than expected results from the Company’s efforts to optimize the market and financial performance of its portfolio of brands and assets due to the reasons set forth in clause (a) above, as well as due to: (i) difficulties, delays in or less than expected results from the Company’s efforts to manage financial drivers for value creation, such as due to higher than expected costs; (ii) difficulties, delays in or less than expected results from the Company’s efforts to grow our global brands through exceptional innovation and effective brand support; (iii) difficulties, delays in or less than expected results from the Company’s efforts to pursue growth opportunities, as well as difficulties, delays in and/or the Company’s inability to complete acquisition opportunities that complement our portfolio, such as difficulties, delays in and/or unanticipated costs in consummating, or the Company’s inability to consummate, transactions to acquire new brands; and (iv) difficulties, delays in and/or the Company’s inability to improve cash flow;
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(v)
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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 greater than anticipated costs or charges or less than anticipated cost reductions or other benefits from the September 2012 Program, the December 2013 Program and/or the Integration Program and/or the risk that any of such programs may not satisfy the Company’s objectives;
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(vi)
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lower than expected operating revenues, cash on hand and/or funds available under the Amended Revolving Credit Facility and/or other permitted lines of credit or 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, either of which could have a material adverse effect on the Company's liquidity needs;
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(vii)
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the unavailability of funds under Products Corporation's Amended Revolving Credit Facility or other permitted lines of credit; or from difficulties, delays in or the Company's inability to take other measures, such as reducing discretionary spending;
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(viii)
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higher than expected operating expenses, sales returns, working capital expenses, permanent wall display costs, capital expenditures, debt service payments, tax payments, cash pension plan contributions, post-retirement benefit plan contributions and/or net periodic benefit costs for the pension and other post-retirement benefit plans, integration costs related to the Colomer Acquisition, restructuring costs, severance and discontinued operations not otherwise included in the Company’s restructuring programs, debt and/or equity repurchases and/or costs related to litigation;
|
(ix)
|
interest rate or foreign exchange rate changes affecting the Company and its market-risk sensitive financial instruments and/or difficulties, delays or the inability of the counterparty to perform such transactions;
|
(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 and effective tax rate;
|
(xiii)
|
difficulties, delays in or the Company's inability to exchange Bolivars for U.S. Dollars, whether due to the lack of a market developing for such exchange or otherwise and/or unanticipated adverse impacts to the Company's results of operations such as due to higher than expected exchange rates; and difficulties or delays in the Company's ability to import certain products through Venezuela's monetary systems (including, without limitation, the CADIVI, SICAD, SICAD II and/or CENCOEX markets);
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(xiv)
|
unexpected effects on the Company’s business, financial condition and/or its results of operations as a result of legal proceedings; and
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(xv)
|
difficulties or delays in realizing, or less than anticipated, benefits from the Colomer Acquisition, such as (i) less than expected cost reductions, more than expected costs to achieve the expected cost reductions or delays in achieving the expected cost reductions, such as due to difficulties or delays in and/or the Company’s inability to integrate the
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Revlon, Inc.
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(Registrant)
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By: /s/ Lorenzo Delpani
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By: /s/ Roberto Simon
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By: /s/ Jessica T. Graziano
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Lorenzo Delpani
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Roberto Simon
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Jessica T. Graziano
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President,
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Executive Vice President and
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Senior Vice President,
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Chief Executive Officer and
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Chief Financial Officer
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Corporate Controller,
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Director
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Chief Accounting Officer and Treasurer
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Title:
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Executive Vice President, Chief Financial Officer and Chief Administrative Officer
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1.
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I have reviewed this quarterly report on Form 10-Q (the "Report") of Revlon, Inc. (the "Registrant");
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2.
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Based on my knowledge, this Report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this Report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this Report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this Report;
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4.
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The Registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have:
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5.
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The Registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant's auditors and the audit committee of the Registrant's board of directors (or persons performing the equivalent functions):
|
1.
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I have reviewed this quarterly report on Form 10-Q (the "Report") of Revlon, Inc. (the "Registrant");
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2.
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Based on my knowledge, this Report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this Report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this Report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this Report;
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4.
|
The Registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have:
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5.
|
The Registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant's auditors and the audit committee of the Registrant's board of directors (or persons performing the equivalent functions):
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