Revlon Reports Strong Second Quarter 2008 Results

Business Wire, July 31, 2008

Net Sales Increase 8% and Profitability Improves Significantly

Revlon Brand New Products Drive Increase in June ACNielsen U.S. Mass Retail Share to 14%

NEW YORK -- Revlon, Inc. (NYSE: REV) today announced results for the second quarter ending June 30, 2008.

Second quarter 2008 financial results, compared to the second quarter of last year:

* Net sales of $376.4 million, compared to $349.2 million.

* Operating income of $59.4 million, compared to $16.9 million.

* Net income of $19.9 million, compared to a net loss of $11.3 million.

* Adjusted EBITDA1 of $81.7 million, compared to $42.0 million.

Commenting on today's announcement, Revlon President and Chief Executive Officer, David Kennedy, said, "Our strong results in the second quarter continue to validate our strategy. We continue to focus on the key drivers, including: innovative, high-quality, consumer-preferred new products; effective, integrated brand communication; competitive levels of advertising and promotion; and superb execution with our retail partners, which build our brands, particularly the Revlon brand, and generate sustainable, profitable sales growth. We also remain focused on controlling our costs and driving efficiencies throughout our organization, which continue to positively impact our margins and cash flows."

Second Quarter Results

Net sales in the second quarter of 2008 increased by 7.8% to $376.4 million, compared to net sales of $349.2 million in the second quarter of 2007. Excluding the favorable impact of foreign currency fluctuations, net sales in the second quarter increased 5.5% versus year-ago.

In the United States, net sales in the second quarter of 2008 increased 6.0% to $216.4 million, compared to net sales of $204.2 million in the second quarter of 2007. The primary driver of the second quarter net sales growth was higher shipments of Revlon color cosmetics, largely due to 2008 new product launches, including initial shipments of our more extensive second half 2008 new product lineup.

In the Company's international operations, net sales in the second quarter of 2008 increased 10.3% to $160.0 million, compared to net sales of $145.0 million in the second quarter of 2007. Excluding the favorable impact of foreign currency fluctuations, net sales in the second quarter of 2008 increased 4.8% compared to the same period last year, reflecting primarily higher shipments of Revlon color cosmetics products launched in 2008. Each of the company's international regions, namely, Asia Pacific, Europe, and Latin America, experienced net sales growth and margin expansion in the second quarter of 2008 compared to the year-ago quarter.

Operating income was $59.4 million in the second quarter of 2008, versus $16.9 million in the second quarter of 2007. Net income in the second quarter of 2008 was $19.9 million, or $0.04 per fully diluted share, compared with a net loss of $11.3 million, or a loss of $0.02 per share, in the second quarter of 2007. Adjusted EBITDA was $81.7 million in the second quarter of 2008, compared to $42.0 million in the same period last year.

Operating income, net income and Adjusted EBITDA in the second quarter of 2008 improved significantly compared to the same period last year, primarily driven by higher net sales and the non-recurrence of brand support in the second quarter of 2007 related to the launch of Revlon Colorist hair color. The Company continued to support its brands worldwide with comparable levels of dollar spending in the second quarter of 2008 compared to the second quarter of last year, excluding the prior year brand support related to the launch of Revlon Colorist, as noted above.

Operating income, Adjusted EBITDA and net income in the second quarter of 2008 include a net gain of $5.9 million, $6.0 million and $4.9 million, respectively, related to the sale of a facility in Mexico. The expected full year impact of the sale of the facility in Mexico on operating income, Adjusted EBITDA and net income will be a net gain of $4.3 million, $4.9 million and $3.5 million, respectively, after recording restructuring and other related charges in the second half of the year.

Adjusted EBITDA is a non-GAAP measure that is defined in the footnotes to this release and is reconciled to net income/(loss), the most directly comparable GAAP measure, in the accompanying financial tables.

Six Months Results

Net sales in the first six months of 2008 increased 2.8% to $696.8 million, compared to net sales of $677.8 million in the first six months of 2007. Excluding the favorable impact of foreign currency fluctuations, net sales in the first six months were essentially unchanged versus year-ago.

In the United States, net sales in the first six months of 2008 decreased 1.0% to $393.6 million, compared to net sales of $397.5 million in the first six months of 2007. In the Company's international operations, net sales in the first six months of 2008 increased 8.2% to $303.2 million, compared to net sales of $280.3 million in the first six months of 2007. Excluding the favorable impact of foreign currency fluctuations, net sales in international operations in the first six months of 2008 increased 1.7% compared to the same period last year.