Revlon realizes savings from restructuring, continues to reduce debt

By Lisa Kerner

Charlotte, N.C., Oct. 29 - Revlon Inc.'s restructuring plan, first announced in May of 2008, has helped to right size the company and make it stronger in addition to delivering the expected savings, said chief executive officer and president Alan Ennis during Revlon's third-quarter earnings call on Thursday.

The worldwide organizational restructuring, designed to reduce annualized costs by approximately $30 million, included consolidating functions, reducing layers of management and further consolidating the company's office facilities in New Jersey, according to a Revlon news release.

Chief financial officer Steven Berns said that $6 million of savings from restructuring activities was realized in the third quarter of 2009.

Savings of $9 million is expected in the fourth quarter, and the remaining $15 million of expected savings should occur in the first two quarters of 2010.

Revlon incurred charges of $20.8 million related to restructuring. Of that, Berns said $18.2 million was recognized in the second quarter of 2009 and the balance of $2.6 million was recorded in the third quarter.

Berns said Revlon has reduced debt by $58 million so far in 2009 and by nearly $170 million since the start of 2008.

In the third quarter of 2009, the company reduced debt by $10 million by repurchasing $8.6 million in total principal amount of its 9½% senior notes and reducing its outstanding revolver borrowings by about $1.5 million, said Berns.

Revlon repurchased an incremental $10 million in total principal amount of the 9½% senior notes in October, reducing the outstanding principal amount to $340.5 million.

As of Sept. 30, Revlon had $113.5 million available under its revolving credit facility and $59.7 million of available cash.

Revlon, a New York-based cosmetics and personal care products company, reported net sales for the third quarter of 2009 of $326.2 million, down 2.5% from $334.4 million in the third quarter of 2008.

The company had income from continuing operations of $23.1 million, or $0.45 per diluted share, for the quarter, compared with a loss from continuing operations of $15.2 million, or $0.30 per diluted share, for the prior-year period.

For the third quarter of 2009, Revlon had net income of $23.1 million, or $0.45 per diluted share, compared with the prior-year period's results of $29.2 million, or $0.57 per diluted share, which included income from discontinued operations of $44.4 million, or $0.87 per diluted share.

Revlon's free cash flow rose to $54.1 million for the third quarter of 2009 from $16.9 million for the third quarter of 2008.

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