Revlon boasts another year of positive free cash flow; year-end liquidity tops $237 million

By Lisa Kerner

Charlotte, N.C., Feb. 5 - Revlon, Inc. reported its fifth consecutive year of positive free cash flow in 2012, said chief executive officer and president Alan Ennis during Revlon's fourth-quarter and full-year earnings conference call on Tuesday.

Free cash flow for 2012 was $84 million, compared to $74.4 million for 2011.

Ennis said a portion of the free cash flow was used to fund acquisitions.

"We delivered top-line growth of almost 5%, clearly reflecting the effectiveness of our strategy," said Ennis, noting that Revlon has "consistently" grown its top line since 2009.

At Dec. 31, the company had available cash of $108 million and $129.6 million available under its revolving credit facility, for total liquidity of $237.6 million, said chief financial officer Steven Berns on the call.

The revolver was undrawn at year-end, and Berns said $10.4 million of standby letters of credit had also been issued under the facility.

Revlon expects to make an amortization payment of about $19.5 million under its term loan by April, according to the CFO.

In late January, the New York-based cosmetics and personal-care products company announced a cash tender offer through Revlon Consumer Products Corp. for its 9¾% senior secured notes due 2015. The offer is conditioned on RCPC obtaining financing proceeds in an amount sufficient to effect the repurchase of the notes, Berns said.

Revlon announced on Tuesday that RCP would offer $400 million of senior unsecured notes due 2021. Proceeds would be used to pay the tender offer consideration for the 9¾% notes as well as for general corporate purposes and the April loan payment.

Financial highlights

For the fourth quarter ended Dec. 31, Revlon reported net income of $46.5 million, or $0.89 per diluted share, compared to $36.4 million, or $0.70 per diluted share, in the same period last year.

Net income for the full year was $51.1 million, or $0.98 per diluted share, compared to $53.4 million, or $1.02 per diluted share for 2011.

Revlon's net cash from operations was up in the fourth quarter to $86.2 million versus $67.8 million in the same period last year.

Net cash from operations activities rose to $104.1 million for 2012, compared to $88 million for 2011.

Net cash used in investing activities in 2012 was $86.3 million, which included the cash paid to acquire Pure Ice, compared to $52.6 million in 2011, which included the cash paid to acquire SinfulColors, according to Revlon's earnings release.

Adjusted EBITDA for 2012 of $254 million included $24.1 million of restructuring and related charges and a net charge of $8.9 million related to shareholder litigation. For 2011, Revlon reported adjusted EBITDA of $266 million.

Interest expense, including preferred stock dividends, decreased $500,000 to $21.3 million in the fourth quarter of 2012 as compared to the same period last year.

For the full-year 2012, interest expense, including preferred stock dividends, was down $5.7 million to $85.6 million, from the prior-year period.

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