Revlon Inc. approached the one-year anniversary of its acquisition of The Colomer Group with improvements in its top and bottom lines.
Lorenzo Delpani, president and chief executive officer, told analysts on a morning conference call that the integration of Colomer was “on track to deliver annualized cost reduction of $30 million to $35 million by the end of 2015.” That helped lift shares 1.6 percent, to $34.09, in New York Stock Exchange trading after they hit a 52-week high of $35.26 in morning trading.
In the third quarter ended Sept. 30, net income grew 53.7 percent, to $14.6 million, or 28 cents a diluted share, from $9.5 million, or 18 cents, in the year-ago quarter. Adjusted earnings before interest, taxes, depreciation and amortization rose 33.6 percent, to $85 million from $63.6 million. Sales rose 41.8 percent, to $472.3 million from $333.1 million, in the 2013 period, prior to the completion of the Colomer acquisition.
In a pro forma iteration of results, in which business units attached to Colomer were accounted for as if they had been part of Revlon one year ago, consumer product revenues slipped 0.9 percent, to $348.2 million from $351.3 million, while professional segment revenues were up 1.2 percent, to $124.1 million from $122.6 million. Total sales on this basis were down 0.3 percent, to $472.3 million.
Excluding headwinds from unfavorable currency translations, both parts of the business had increases of 2 percent, Delpani noted.
“Almay had a tough quarter,” the ceo said. “Yet we remain focused on the preparation of its turnaround. Sinful Colors has declined slightly due to category decline [in color cosmetics] and fewer promotions this quarter versus last year. On a brighter note, Mitchum is growing behind its brand relaunch.”
He said color cosmetics had “positive momentum” in the U.S. but suffered from weakness in non-U.S. markets handled by its distributor network.
On a pro forma basis, U.S. sales rose 3.8 percent, to $248.3 million, in the quarter, while international revenues pulled back 4.4 percent, to $228.5 million.
On a reported basis, net income for the nine months rose 39.9 percent, to $38.2 million, or 73 cents a diluted share, while sales were up 43.5 percent, to $1.44 billion.
Delpani, ceo of Colomer for six years, succeeded Alan Ennis. After the completion of the Colomer acquisition, David Kennedy briefly served as interim ceo.