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Sales Growth Slows, Pinches Revlon Bonds

NEW YORK -- Revlon Consumer Products Corp.'s bonds are off, apparently on some slowing in the growth in the company's sales as well as overall weak bond market conditions.<BR><BR>Revlon Worldwide Corp.'s zero coupon senior secured notes maturing in...

NEW YORK — Revlon Consumer Products Corp.’s bonds are off, apparently on some slowing in the growth in the company’s sales as well as overall weak bond market conditions.

Revlon Worldwide Corp.’s zero coupon senior secured notes maturing in 1998 traded at 41.5 Tuesday. They were at 40 in mid-May, but well below the 51 of three months ago. Revlon Worldwide is the holding company for Revlon’s Consumer Products Corp.

Revlon Consumer Product Corp.’s 9.5 percent senior notes maturing in 1999 are at 91.25, up from 87.25 about two weeks ago, but down from 97 earlier in May.

Analysts expect Revlon’s initial public offering, which was expected this spring, to be pushed into 1995 due to a combination of weak financial numbers by Revlon and a cooled IPO market.

“Sales are running slower than expected but that’s more a reflection of a poor overall climate for cosmetics and fragrances,” said Angela Uttaro, senior vice president at Freeman Securities Co., Jersey City, N.J.

Separately, Revlon’s banks pulled back their lines of credit in 1993 to $150 million from $500 million, thus eliminating the need for an $11 million cash infusion, according a company filing with the Securities and Exchange Commission.

In the same filing, Revlon said its banks will improve their security interest in certain domestic accounts receivable through an account receivable financing deal. That deal, originally set to be in place by May 31, was still being structured at press time, a company executive said.

Although Revlon’s EBITDA (earnings before interest, taxes, depreciation, and amortization) advanced 27 percent in the first quarter, which ended March 31, the results were short of analysts’ expectations. Uttaro attributed the improved EBITDA to cost savings the company has wrung out with its restructuring efforts.

Uttaro said she thinks new products and restructured operations, along with some pickup in consumer spending, “should pay off” with better results in the latter part of this year.