NEW YORK — Despite showing signs of progress in its campaign to pare its massive debt, Revlon Inc. remained mired in the red for the first quarter.
For the three months ended March 31, the beleaguered beauty giant saw losses expand to $58.2 million, or 63 cents a diluted share, compared with a loss of $48.7 million, or 91 cents a share, in the same period a year ago. The bottom line was impacted by a $32.6 million charge relating to the company’s early retirement of debt during the quarter.
Jack Stahl, president and chief executive officer, was upbeat about the company’s progress. “We’re delighted with this first step that we have completed in terms of the debt-for-equity exchange,” he said during the company conference call.
Handling debt continues to be a prominent issue. On Wednesday, the company announced plans to sell approximately $400 million of senior unsecured notes due in 2011 to private institutional investors as part of its debt refinancing. Additionally, the company expects to execute an amended and restated credit facility, which should provide a credit line of approximately $680 million, replacing its extant credit facility.
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Sales, led by growth in the Asian and Latin American markets, tracked up 5.6 percent to $308.4 million from $292 million. International sales jumped 18 percent to $102 million. However, the weakness of the U.S. dollar worked to the benefit of results. Excluding the benefits of currency translation international sales grew approximately 4 percent.
The Asian and Pacific markets in particular continue to show strength, a sentiment heard earlier in week when Estée Lauder reported third-quarter results. “Increasingly, I think international will be an important driver for our business as we go forward,” said Stahl.
North American sales improved marginally to $206 million from $205 million.
According to data from ACNielsen, the company’s total market share during the quarter was 22.4 percent, down 0.7 share points. The Revlon brand market share remained essentially flat at 17 percent, from 17.1 percent.
The company’s Almay brand was down 0.5 share points to 5.4 percent. The decline, said Stahl, was attributable to a loss of retail space with one of its major customers. According to management, the company will regain its Almay retail space from that customer in May.
Management also pointed out on the call that market share figures from Nielsen exclude data from Wal-Mart and other regional mass retailers. Nielsen data, said the company, represents approximately 70 percent of the company’s U.S. mass market volume.
Selling, general and administrative expenses declined 740 basis points to 55.7 percent of sales, or $171.9 million. Comparatively, SG&A expenses came in at 63.1 percent of sales, or $184.2 million, in the year-ago period.
Stahl drew further confidence from the success of the company’s initial efforts to shed its sizeable debt load. During the quarter long-term debt fell 41 percent to $1.1 billion from $1.87 billion.