Revlon, Inc. (



Q1 2011 Earnings Call

April 28, 2011 9:30 am ET


Elise A. Garofalo – Senior Vice President, Treasurer and Investor Relations

Alan T. Ennis – President and Chief Executive Officer

Chris Elshaw – Executive Vice President and Chief Operating Officer

Steven Berns – Executive Vice President and Chief Financial Officer


David Wu – Telsey Advisory Group

Connie M. Maneaty – BMO Capital Markets

Karru Martinson – Deutsche Bank

Jeff Kobylarz – Stone Harbor Investments



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Good morning, ladies and gentlemen, and welcome to Revlon’s First Quarter 2011 Earnings Conference Call. At the request of Revlon, today’s conference call is being recorded. (Operator Instructions)

I would know like to turn the call over to Ms. Elise Garofalo, Revlon’s Senior Vice President, Treasurer and Investor Relations. You may begin Ms. Garofalo.

Elise A.

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Thanks, Simon. Good morning, everyone, and thanks for joining today’s call. Earlier today we released our results for the first quarter ended March 31, 2011. If you have not already received a copy of the earnings release, you can obtain one on our website at

On the call with me this morning are Alan Ennis, Revlon’s President and Chief Executive Officer; Chris Elshaw, Executive Vice President and Chief Operating Officer; and Steven Berns, Executive Vice President and Chief Financial Officer.

Before I turn the call over to Alan, I’d like to remind everyone of a few things. First, our discussion this morning might include forward-looking statements, which are subject to the safe harbor provisions of the Private Securities Litigation Reform Act. Information and factors that could affect the company’s results from time to time and cause them to differ materially from such forward-looking statements as set forth in the company’s filings with the SEC, including our 2010 Form 10-K and our 2011 first quarter 10-Q, which we filed earlier this morning.

Next, our remarks today will include a discussion of adjusted EBITDA and free cash flow, both of which are non-GAAP measures. These non-GAAP measures are defined in the footnotes to our release and are also reconciled to the most directly comparable GAAP measures in the financial tables at the end of our release.

And finally, as a reminder, our discussion this morning should not be copied or recorded.

With that, I’ll turn the call over to Alan.

Alan T. Ennis

Thank you, Elise, and good morning everyone. As we have discussed with you in the past, Revlon’s vision is glamour, excitement and innovation through high-quality products at affordable prices. And this underpins everything we do. We realize this vision by executing the five key elements of our business strategy and they are building our strong brands, developing our organizational capability, driving our company to act globally, increasing our operating profit and cash flow, and improving our capital structure.

We are carrying positive momentum into 2011 with respect to our strategy and have a keen focus on delivering on our strategic goals of profitability growing our business. With regard to building our strong brands, during the first quarter of 2011 we made progress in a number of areas. From a topline perspective we are very pleased with our net sales growth of over 9% during the quarter. We delivered improved year-over-year net sales performance in each of our five regions, which demonstrates the focus of our regional teams on delivering global growth.

Our brands performed well in the marketplace with particularly strong performance by some of our new products including Revlon ColorBurst Lipgloss, Revlon Top Speed Nail Enamel and Almay Intense i- Smoky-i kit.

We have discussed for some time that we believe the drivers of profitable growth are first, innovative high-quality consumer preferred brand offering, second, effective brand communication, including appropriate levels of advertising and promotion, and third, superb execution with our retail partners to provide optimal in-store offerings.

Our continued emphasize and key focus on these drivers is of utmost importance to our objective of sustaining topline momentum.

Also with respect to our focus on growth we added the Sinful Colors brand to our portfolio in March of this year. Sinful Colors is a fashion color cosmetics brand, primarily in nail color, which is sold today in mass cosmetics retails in the U.S. and certain markets outside the U.S. We will continue to utilize the successful Sinful Colors business model, namely speed-to-market with on-trend and exciting new product introductions and highly effective in-store promotional programs. Going forward we will evaluate opportunities to drive further growth with this brand.

With regard to our strategic objectives of increasing our operating profit and cash flow and improving our capital structure, we continue to make progress. We sustain competitive operating margins while significantly increasing our advertising investment to enhance our marketplace competitiveness. Also with respect to our capital structure Moody’s announced in April that it upgraded our corporate credit ratings.

And lastly, before I turn the call over to Chris, let me remind you about our Annual EIF Revlon Run/Walk For Women, which will be held in New York City this Saturday, April 30,

and Los Angeles on Saturday, May 7. We, at Revlon, are very proud of our longstanding and continued philanthropic support for women’s health initiatives and the fight against women’s cancers.

Over the years Revlon has helped to raise millions of dollars for research, education and efficacy. Every dollar we help raise puts us one step closer to finding more treatment options and a cure for women’s cancers. If you would like to donate to this cause or register to participate, please visit


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