<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended: March 31, 2000
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from__________________ to _______________
Commission file number 1-11178
REVLON, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 13-3662955
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
625 MADISON AVENUE, NEW YORK, NEW YORK 10022
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 212-527-4000
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports) and (2) has been subject to such filing
requirements for the past 90 days. Yes [X] No [ ]
As of March 31, 2000, 19,992,837 shares of Class A Common Stock and 31,250,000
shares of Class B Common Stock were outstanding. 11,250,000 shares of Class A
Common Stock and all the shares of Class B Common Stock were held by REV
Holdings Inc., an indirect wholly owned subsidiary of Mafco Holdings Inc.
Total Pages - 16
<PAGE>
REVLON, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
(DOLLARS IN MILLIONS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
ASSETS 2000 1999
--------- ---------
Current assets: (Unaudited)
<S> <C> <C>
Cash and cash equivalents ................................................. $ 27.8 $ 25.4
Trade receivables, less allowances of $19.1
and $27.2, respectively ............................................. 238.9 332.6
Inventories ............................................................... 219.5 278.3
Prepaid expenses and other ................................................ 46.5 51.3
--------- ---------
Total current assets ................................................ 532.7 687.6
Property, plant and equipment, net .............................................. 284.4 336.4
Other assets .................................................................... 170.4 177.5
Intangible assets, net .......................................................... 244.7 356.8
--------- ---------
Total assets ........................................................ $ 1,232.2 $ 1,558.3
========= =========
LIABILITIES AND STOCKHOLDERS' DEFICIENCY
Current liabilities:
Short-term borrowings - third parties ..................................... $ 29.0 $ 37.6
Current portion of long-term debt - third parties ......................... - 10.2
Accounts payable .......................................................... 119.1 139.8
Accrued expenses and other ................................................ 364.1 409.7
--------- ---------
Total current liabilities ........................................... 512.2 597.3
Long-term debt - third parties .................................................. 1,480.3 1,737.8
Long-term debt - affiliates ..................................................... 24.1 24.1
Other long-term liabilities ..................................................... 213.3 214.0
Stockholders' deficiency:
Preferred stock, par value $.01 per share; 20,000,000
shares authorized, 546 shares of Series A Preferred Stock
issued and outstanding .............................................. 54.6 54.6
Class B Common Stock, par value $.01 per share; 200,000,000
shares authorized, 31,250,000 issued and outstanding ................ 0.3 0.3
Class A Common Stock, par value $.01 per share; 350,000,000
shares authorized, 19,992,837 issued and outstanding ................ 0.2 0.2
Capital deficiency ........................................................ (228.4) (228.4)
Accumulated deficit since June 24, 1992 ................................... (801.4) (773.5)
Accumulated other comprehensive loss ...................................... (23.0) (68.1)
--------- ---------
Total stockholders' deficiency ...................................... (997.7) (1,014.9)
--------- ---------
Total liabilities and stockholders' deficiency ...................... $ 1,232.2 $ 1,558.3
========= =========
</TABLE>
See Accompanying Notes to Unaudited Consolidated Condensed Financial Statements.
2
<PAGE>
REVLON, INC. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(DOLLARS IN MILLIONS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
QUARTER ENDED MARCH 31,
---------------------------
2000 1999
----------- -----------
<S> <C> <C>
Net sales ............................................ $ 468.0 $ 441.1
Cost of sales ........................................ 168.5 155.7
----------- -----------
Gross profit .................................... 299.5 285.4
Selling, general and administrative expenses ......... 278.9 272.9
Business consolidation costs, net .................... 9.5 8.2
----------- -----------
Operating income ................................ 11.1 4.3
----------- -----------
Other expenses (income):
Interest expense ................................ 39.4 35.9
Interest income ................................. (0.4) (1.1)
Amortization of debt issuance costs ............. 2.5 1.3
Foreign currency gains, net ..................... (0.5) -
Miscellaneous, net .............................. 0.5 0.5
Gain on sale of product line, net ............... (6.2) -
----------- -----------
Other expenses, net ........................ 35.3 36.6
----------- -----------
Loss before income taxes ............................. (24.2) (32.3)
Provision for income taxes ........................... 3.7 1.9
----------- -----------
Net loss ............................................. $ (27.9) $ (34.2)
=========== ===========
Basic loss per common share .......................... $ (0.54) $ (0.67)
=========== ===========
Diluted loss per common share ........................ $ (0.54) $ (0.67)
=========== ===========
Weighted average number of common shares outstanding:
Basic and diluted .............................. 51,242,837 51,236,771
=========== ===========
</TABLE>
See Accompanying Notes to Unaudited Consolidated Condensed Financial Statements.
3
<PAGE>
REVLON, INC. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED CONDENSED STATEMENTS OF STOCKHOLDERS' DEFICIENCY
AND COMPREHENSIVE LOSS
(DOLLARS IN MILLIONS)
<TABLE>
<CAPTION>
ACCUMULATED
OTHER TOTAL
PREFERRED COMMON CAPITAL ACCUMULATED COMPREHENSIVE STOCKHOLDERS'
STOCK STOCK DEFICIENCY DEFICIT LOSS (a) DEFICIENCY
----- ----- ---------- ------- -------- ----------
<S> <C> <C> <C> <C> <C> <C>
Balance, January 1, 1999 .......................... $ 54.6 $ 0.5 $ (228.5) $ (402.0) $ (72.6) $ (648.0)
Comprehensive loss:
Net loss ............................. (34.2) (34.2)
Revaluation of marketable securities . (0.2) (0.2)
Currency translation adjustment ...... (25.7) (25.7)
----------
Total comprehensive loss ..................... (60.1)
-------- ------- --------- --------- --------- ----------
Balance, March 31, 1999 ........................... $ 54.6 $ 0.5 $ (228.5) $ (436.2) $ (98.5) $ (708.1)
======== ======= ========= ========= ========= ==========
Balance, January 1, 2000 .......................... $ 54.6 $ 0.5 $ (228.4) $ (773.5) $ (68.1) $ (1,014.9)
Comprehensive income:
Net loss ............................. (27.9) (27.9)
Currency translation adjustment ...... 45.1(b) 45.1
----------
Total comprehensive income ................... 17.2
-------- ------- --------- --------- --------- ----------
Balance, March 31, 2000 ........................... $ 54.6 $ 0.5 $ (228.4) $ (801.4) $ (23.0) $ (997.7)
======== ======= ========= ========= ========= ==========
</TABLE>
- --------------
(a) Accumulated other comprehensive loss includes a revaluation of marketable
securities of $3.8 and $3.2 as of March 31, 2000 and 1999, respectively,
currency translation adjustments of $14.3 and $62.8 as of March 31, 2000
and 1999, respectively, and adjustments for the minimum pension liability
of $4.9 and $32.5 as of March 31, 2000 and 1999, respectively.
(b) Accumulated other comprehensive loss and comprehensive income each include
a reclassification adjustment of $48.3 for realized losses associated with
the sale of the Company's worldwide professional products line.
See Accompanying Notes to Unaudited Consolidated Condensed Financial Statements.
4
<PAGE>
REVLON, INC. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(DOLLARS IN MILLIONS)
<TABLE>
<CAPTION>
QUARTER ENDED MARCH 31,
---------------------------
CASH FLOWS FROM OPERATING ACTIVITIES: 2000 1999
--------- ---------
<S> <C> <C>
Net loss ....................................................................... $ (27.9) $ (34.2)
Adjustments to reconcile net loss to net cash
(used for) provided by operating activities:
Depreciation and amortization ............................................. 33.1 30.4
Gain on sale of product line, net ......................................... (6.2) -
Change in assets and liabilities, net of effects of dispositions:
Decrease in trade receivables ........................................ 16.7 128.1
Decrease (increase) in inventories ................................... 6.2 (17.2)
Decrease (increase) in prepaid expenses and
other current assets .................................... 5.1 (2.1)
Increase in accounts payable ......................................... 9.8 22.6
Decrease in accrued expenses and other
current liabilities ..................................... (38.0) (88.2)
Other, net ........................................................... (15.6) (20.5)
--------- ---------
Net cash (used for) provided by operating activities ........................... (16.8) 18.9
--------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures ........................................................... (3.4) (8.2)
Net proceeds from the sale of product line and certain assets .................. 293.4 -
--------- ---------
Net cash provided by (used for) investing activities ........................... 290.0 (8.2)
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net (decrease) increase in short-term borrowings - third parties ............... (5.1) 7.9
Proceeds from the issuance of long-term debt - third parties ................... 49.1 86.3
Repayment of long-term debt - third parties .................................... (313.7) (100.8)
Proceeds from the issuance of debt - affiliates ................................ - 44.8
Repayment of debt - affiliates ................................................. - (44.8)
--------- ---------
Net cash used for financing activities ......................................... (269.7) (6.6)
--------- ---------
Effect of exchange rate changes on cash and cash equivalents ................... (1.1) (3.0)
--------- ---------
Net increase in cash and cash equivalents ................................. 2.4 1.1
Cash and cash equivalents at beginning of period .......................... 25.4 34.7
--------- ---------
Cash and cash equivalents at end of period ................................ $ 27.8 $ 35.8
========= =========
Supplemental schedule of cash flow information:
Cash paid (received) during the period for:
Interest ............................................................. $ 53.0 $ 43.5
Income taxes, net of refunds ......................................... (0.3) 1.1
</TABLE>
See Accompanying Notes to Unaudited Consolidated Condensed Financial Statements.
5
<PAGE>
REVLON, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(DOLLARS IN MILLIONS)
(1) BASIS OF PRESENTATION
Revlon, Inc. (the "Company") is a holding company, formed in April 1992,
that conducts its business exclusively through its direct subsidiary, Revlon
Consumer Products Corporation and its subsidiaries ("Products Corporation"). The
Company is an indirect majority owned subsidiary of MacAndrews & Forbes Holdings
Inc. ("MacAndrews Holdings"), a corporation wholly owned through Mafco Holdings
Inc. ("Mafco Holdings" and, together with MacAndrews Holdings, "MacAndrews &
Forbes") by Ronald O. Perelman.
The accompanying Consolidated Condensed Financial Statements are unaudited.
In management's opinion, all adjustments (consisting of only normal recurring
accruals) necessary for a fair presentation have been made.
The Unaudited Consolidated Condensed Financial Statements include the
accounts of the Company after elimination of all material intercompany balances
and transactions. The Company has made a number of estimates and assumptions
relating to the assets and liabilities, the disclosure of contingent assets and
liabilities and the reporting of revenues and expenses to prepare these
financial statements in conformity with generally accepted accounting
principles. Actual results could differ from those estimates. The Unaudited
Consolidated Condensed Financial Statements should be read in conjunction with
the consolidated financial statements and related notes contained in the
Company's Annual Report on Form 10-K for the year ended December 31, 1999.
The results of operations and financial position, including working capital,
for interim periods are not necessarily indicative of those to be expected for a
full year.
The Company matches advertising and promotion expenses with sales revenues
for interim reporting purposes. Advertising and promotion expenses estimated for
a full year are charged to earnings for interim reporting purposes in proportion
to the relationship that net sales for such period bear to estimated full year
net sales. As a result, for the first quarter of 2000 and 1999, disbursements
and commitments for advertising and promotion exceeded advertising and promotion
expenses by $21.1 and $37.3, respectively, and such amounts were deferred.
On March 30, 2000, the Company completed the disposition of its worldwide
professional products line. Accordingly, the Unaudited Consolidated Condensed
Financial Statements include the results of operations of the worldwide
professional products line through the date of disposition.
(2) INVENTORIES
<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
2000 1999
-------- --------
<S> <C> <C>
Raw materials and supplies .................... $ 64.3 $ 74.1
Work-in-process ............................... 12.6 19.7
Finished goods ................................ 142.6 184.5
-------- --------
$ 219.5 $ 278.3
======== ========
</TABLE>
(3) BASIS AND DILUTED (LOSS) INCOME PER COMMON SHARE
The basic (loss) income per common share has been computed based upon the
weighted average number of shares of common stock outstanding during each of the
periods presented. Diluted (loss)
6
<PAGE>
REVLON, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(DOLLARS IN MILLIONS)
income per common share has been computed based upon the weighted average number
of shares of common stock outstanding. The Company's outstanding stock options
represent the only potential dilutive common stock outstanding. The number of
shares used in the calculation of diluted loss per common share was the same in
each period presented as it does not include any incremental shares that would
have been outstanding assuming the exercise of stock options because the effect
of those incremental shares would have been antidilutive. For each period
presented, the amounts of loss used in the calculation of diluted loss per
common share was the same as the amount of loss used in the calculation of
basic loss per common share.
(4) BUSINESS CONSOLIDATION COSTS, NET
During the fourth quarter of 1999, the Company continued to re-evaluate its
organizational structure and implemented a new restructuring plan, principally
at its New York headquarters and New Jersey locations. As part of this new
restructuring plan, the Company reduced personnel and consolidated excess real
estate. In the first quarter of 2000, the Company recorded a charge of $9.5,
relating to such restructuring plan, principally for additional employee
severance and other personnel benefits and to restructure certain operations
outside the United States.
In the fourth quarter of 1998, the Company committed to a restructuring plan
to realign and reduce personnel, exit excess leased real estate, realign and
consolidate regional activities, reconfigure certain manufacturing operations
and exit certain product lines. In the first quarter of 1999, the Company
recorded a net charge of $8.2 relating to such restructuring plan, principally
for additional employee severance and other personnel benefits.
Of the 208 employees and the 179 employees for whom severance and other
personnel benefits were included in the charges for the fourth quarter 1999 and
the first quarter of 2000, respectively, the Company had terminated 342
employees by March 31, 2000. As of March 31, 2000, the unpaid balance of the
business consolidation costs is included in accrued expenses and other in the
Company's Unaudited Consolidated Condensed Balance Sheets.
Details of the activity described above during the three month period ended
March 31, 2000 are as follows:
<TABLE>
<CAPTION>
BALANCE UTILIZED, NET BALANCE
AS OF ---------------------- AS OF
1/1/00 EXPENSES, NET CASH NONCASH 3/31/00
------ ------------- ---- ------- -------
<S> <C> <C> <C> <C> <C>
Employee severance and other
personnel benefits ...................... $ 24.6 $ 9.1 $ (8.4) $ (1.0) $ 24.3
Factory, warehouse, office
and other costs .......................... 9.4 0.4 (0.4) (1.2) 8.2
------- ------- ------- ------ -------
$ 34.0 $ 9.5 $ (8.8) $ (2.2) $ 32.5
======= ======= ======= ====== =======
</TABLE>
(5) DISPOSITION OF PRODUCT LINE
On March 30, 2000, the Company completed the disposition of its worldwide
professional products line, including professional hair care for use in and
resale by professional salons, ethnic hair and personal care products, Natural
Honey skin care and certain regional toiletries brands, for $315 in cash, before
adjustments, plus $10 in purchase price payable in the future, contingent upon
the purchasers' achievement of certain rates of return on their investment. The
disposition involved the sale of certain of the Company's subsidiaries
throughout the world devoted to the professional
7
<PAGE>
REVLON, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(DOLLARS IN MILLIONS)
products line, as well as assets dedicated exclusively or primarily to the lines
being disposed. The worldwide professional products line was purchased by a
company formed by CVC Capital Partners, the Colomer family and other investors,
led by Carlos Colomer, a former manager of the line that was sold, following
arms'-length negotiation of the terms of the purchase agreement therefor,
including the determination of the amount of the consideration. In connection
with the disposition, the Company recognized a gain of $6.2. Approximately
$150.3 of the Net Proceeds (as defined in the Credit Agreement) was used to
reduce the aggregate commitment under the Credit Agreement (as hereinafter
defined) and the balance will be available for general corporate
purposes.
(6) GEOGRAPHIC INFORMATION
The Company manages its business on the basis of one reportable operating
segment. The Company is exposed to the risk of changes in social, political and
economic conditions inherent in foreign operations and the Company's results of
operations and the value of its foreign assets and liabilities are affected by
fluctuations in foreign currency exchange rates. The Company's operations in
Brazil have accounted for approximately 4.2% of the Company's net sales for the
first quarter of 2000 and 1999. Net sales by geographic area are presented by
attributing revenues from external customers on the basis of where the products
are sold.
<TABLE>
<CAPTION>
GEOGRAPHIC AREAS: QUARTER ENDED MARCH 31,
------------------------------
Net sales: 2000 1999
---------- ------------
<S> <C> <C>
United States ...................... $ 274.3 $ 249.8
International ...................... 193.7 191.3
---------- ------------
$ 468.0 $ 441.1
========== ============
<CAPTION>
MARCH 31, DECEMBER 31,
Long-lived assets: 2000 1999
---------- ------------
<S> <C> <C>
United States ...................... $ 477.7 $ 611.3
International ...................... 221.8 259.4
---------- ------------
$ 699.5 $ 870.7
========== ============
<CAPTION>
Classes of similar products: QUARTER ENDED MARCH 31,
--------------------------------
Net sales: 2000 1999
------------- -------------
<S> <C> <C>
Cosmetics, skin care and fragrances $ 268.4 $ 222.9
Personal care and professional ..... 199.6 218.2
------------- -------------
$ 468.0 $ 441.1
============= =============
</TABLE>
(7) SUBSEQUENT EVENTS
On May 8, 2000, Products Corporation completed the disposition of its
non-core Plusbelle brand in Argentina for $46.2 in cash. Approximately $20.7
of the Net Proceeds was used to reduce the aggregate commitment under the Credit
Agreement and the balance will be available for general corporate purposes.
In addition, the Company has decided to retain its Colorama, Juvena and
Bozzano brands in Brazil.
8
<PAGE>
REVLON, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
(DOLLARS IN MILLIONS)
OVERVIEW
The Company operates in a single segment and manufactures, markets and sells
an extensive array of cosmetics and skin care, fragrances and personal care
products. In addition, the Company has a licensing group.
On March 30, 2000, the Company completed the disposition of its worldwide
professional products line. Accordingly, the Unaudited Consolidated Condensed
Financial Statements include the results of operations of the worldwide
professional products line through the date of disposition.
RESULTS OF OPERATIONS
The following table sets forth the Company's net sales for the first
quarters of 2000 and 1999, respectively:
<TABLE>
<CAPTION>
QUARTER ENDED MARCH 31,
--------------------------
Net sales: 2000 1999
-------- --------
<S> <C> <C>
United States ....................... $ 274.3 $ 249.8
International ....................... 193.7 191.3
-------- --------
$ 468.0 $ 441.1
======== ========
</TABLE>
The following table sets forth certain statements of operations data as a
percentage of net sales for the first quarters of 2000 and 1999, respectively:
<TABLE>
<CAPTION>
QUARTER ENDED MARCH 31,
-----------------------
2000 1999
---- ----
<S> <C> <C>
Cost of sales ....................... 36.0% 35.3%
Gross profit ........................ 64.0 64.7
Selling, general and administrative
expenses ("SG&A") ............... 59.6 61.9
Business consolidation costs, net ... 2.0 1.8
Operating income .................... 2.4 1.0
</TABLE>
NET SALES
Net sales were $468.0 and $441.1 for the first quarters of 2000 and 1999,
respectively, an increase of $26.9, or 6.1% on a reported basis (an increase of
7.6% on a constant U.S. dollar basis). Net sales excluding the worldwide
professional products line were $393.7 and $365.9 for the first quarters of 2000
and 1999, respectively.
United States. Net sales in the United States were $274.3 for the first
quarter of 2000 compared with $249.8 for the first quarter of 1999, an increase
of $24.5, or 9.8%. Net sales improved for the first quarter of 2000, primarily
as a result of consumer acceptance of new product offerings, partially offset by
lower market share, competitive activities and a reduction in the level of
Company shipments to certain
9
<PAGE>
REVLON, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
(DOLLARS IN MILLIONS)
retailers to achieve such retailers' lower inventory target levels. The
reduction of retailers' target inventory levels will continue and is expected to
adversely impact sales through June 2000.
New products in the first quarter of 2000 included REVLON COLORSTAY
LIPSHINE, REVLON COLORSTAY STICK makeup, REVLON AGE DEFYING LIFTING makeup,
ALMAY ONE COAT LIP CREAM, ALMAY LIGHT & EASY makeup and ALMAY 3-IN-1 STICK
makeup.
International. Net sales outside the United States were $193.7 for the first
quarter of 2000 compared with $191.3 for the first quarter of 1999, an increase
of $2.4, or 1.3%, on a reported basis (an increase of 4.7% on a constant U.S.
dollar basis). Net sales improved for the first quarter of 2000 on a constant
U.S. dollar basis principally due to successful new product introductions in
certain markets. This was partially offset, on a reported basis, by the
unfavorable effect on sales of a stronger U.S. dollar against certain foreign
currencies and increased competitive activity. Sales outside the United States
are divided into three geographic regions. In Europe, which comprises Europe,
the Middle East and Africa, net sales decreased by 1.8% on a reported basis to
$86.9 for the first quarter of 2000 as compared with the first quarter of 1999
(an increase of 7.0% on a constant U.S. dollar basis). In the Western
Hemisphere, which comprises Canada, Mexico, Central America, South America and
Puerto Rico, net sales increased by 5.5% on a reported basis to $73.5 for the
first quarter of 2000 as compared with the first quarter of 1999 (an increase of
4.5% on a constant U.S. dollar basis). The Company's operations in Brazil are
significant. In Brazil, net sales were $19.8 on a reported basis for the first
quarter of 2000 compared with $18.6 for the first quarter of 1999, an increase
of $1.2, or 6.5% (an increase of 7.6% on a constant U.S. dollar basis). The
improvement in sales is primarily due to increased volume in toiletries and
cosmetics as well as improved economic conditions. In the Far East, net sales
increased by 0.6% on a reported basis to $33.3 for the first quarter of 2000 as
compared with the first quarter of 1999 (a decrease of 0.6% on a constant U.S.
dollar basis). Net sales outside the United States, including, without
limitation, in Brazil, may be adversely affected by weak economic conditions,
political and economic uncertainties, including, without limitation, currency
fluctuations, and competitive activities in certain markets.
Cost of sales
As a percentage of net sales, cost of sales was 36.0% for the first quarter
of 2000 compared with 35.3% for the first quarter of 1999. The increase in cost
of sales as a percentage of net sales for the first quarter of 2000 compared
with the first quarter of 1999 is due to changes in product mix and the effect
of weaker local currencies on the cost of imported purchases by certain
subsidiaries outside the U.S.
SG&A expenses
As a percentage of net sales, SG&A expenses were 59.6% for the first quarter
of 2000 compared with 61.9% for the first quarter of 1999. The decrease of SG&A
expenses as a percentage of net sales is due in large measure to the cost
reduction efforts undertaken by the Company in 1999 and 1998.
Business consolidation costs, net
During the fourth quarter of 1999, the Company continued to re-evaluate its
organizational structure and implemented a new restructuring plan principally at
its New York headquarters and New Jersey locations. As part of this new
restructuring plan, the Company reduced personnel and consolidated excess real
estate. In the first quarter of 2000, the Company recorded a charge of $9.5
relating to such restructuring plan, principally for additional employee
severance and other personnel benefits and to restructure certain operations
outside the United States. The Company anticipates additional annual savings of
between $5 and $7 relating to the first quarter of 2000 charge.
10
<PAGE>
REVLON, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
(DOLLARS IN MILLIONS)
In the fourth quarter of 1998, the company committed to a restructuring plan
to realign and reduce personnel, exit excess leased real estate, realign and
consolidate regional activities, reconfigure certain manufacturing operations
and exit certain product lines. In the first quarter of 1999, the Company
recorded a net charge of $8.2 relating to such restructuring plan, principally
for additional employee severance and other personnel benefits.
Operating income
As a result of the foregoing, operating income for the first quarter of 2000
was $11.1 compared with $4.3 for the first quarter of 1999. Operating income
(loss) excluding the worldwide professional products line was $8.0 and $(1.8)
for the first quarters of 2000 and 1999, respectively.
Other expenses (income)
Interest expense was $39.4 for the first quarter of 2000 compared with $35.9
for the first quarter of 1999. The increase in interest expense for the first
quarter of 2000 as compared with the first quarter of 1999 is due to higher
average outstanding debt and higher interest rates under the Credit Agreement,
partially offset by the repayment in 1999 of Products Corporation's 9 1/2%
Senior Notes due 1999.
Foreign currency gains, net, were $0.5 for the first quarter of 2000
compared with nil in the first quarter of 1999.
Gain on sale of product line, net
On March 30, 2000, the Company completed the disposition of its worldwide
professional products line, including professional hair care for use in and
resale by professional salons, ethnic hair and personal care products, Natural
Honey skin care and certain regional toiletries brands. In connection with the
disposition, the Company recognized a gain of $6.2 (See Note 5).
Provision for income taxes
The provision for income taxes was $3.7 for the first quarter of 2000
compared with $1.9 for the first quarter of 1999. The increase in the first
quarter of 2000 compared with the first quarter of 1999 was primarily due to the
reduction of certain deferred tax assets and increased taxes associated with the
worldwide professional products line as well as higher taxable income in certain
markets outside the United States.
FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES
Net cash (used for) provided by operating activities was $(16.8) and $18.9
for the first quarters of 2000 and 1999, respectively. The increase in net cash
used for operating activities in the first quarter of 2000 compared with net
cash provided by operating activities in the first quarter of 1999 resulted
primarily from changes in working capital.
Net cash provided by (used for) investing activities was $290.0 and $(8.2)
for the first quarters of 2000 and 1999, respectively. Net cash provided by
investing activities in the first quarter of 2000 consisted of proceeds from the
sale of the Company's worldwide professional products line, partially offset by
cash used for capital expenditures. Net cash used for investing activities for
the first quarter of 1999 consisted of capital expenditures.
Net cash used for financing activities was $269.7 and $6.6 for the first
quarters of 2000 and 1999, respectively. Net cash used for financing activities
for the first quarter of 2000 included repayments of borrowings under the Credit
Agreement and the repayment of Products Corporation's Japanese yen-
11
<PAGE>
REVLON, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
(DOLLARS IN MILLIONS)
denominated credit agreement (the "Yen Credit Agreement"), partially offset by
cash drawn under the Credit Agreement. Net cash used for financing activities
for the first quarter of 1999 included repayments of borrowings under the Credit
Agreement and repayments under the Yen Credit Agreement partially offset by cash
drawn under the Credit Agreement.
In May 1997, Products Corporation entered into a credit agreement (as
subsequently amended, the "Credit Agreement") with a syndicate of lenders, whose
individual members change from time to time. In March 2000, 60% of the Net
Proceeds from the sale of its worldwide professional products line was applied
to reduce the aggregate commitment under the Credit Agreement. As of March 31,
2000, the Credit Agreement provides up to $572.7 and is comprised of five senior
secured facilities: $118.2 in two term loan facilities (the "Term Loan
Facilities"), a $300.0 multi-currency facility (the "Multi-Currency Facility"),
a $104.5 revolving acquisition facility, which may also be used for general
corporate purposes and which may be increased to $304.5 under certain
circumstances with the consent of a majority of the lenders (the "Acquisition
Facility"), and a $50.0 special standby letter of credit facility (the "Special
LC Facility"). At March 31, 2000, the Company had $118.2 outstanding under the
Term Loan Facilities, $117.9 outstanding under the Multi-Currency Facility,
$95.0 outstanding under the Acquisition Facility and $23.6 of issued but undrawn
letters of credit under the Special LC Facility.
A subsidiary of Products Corporation was the borrower under the Yen Credit
Agreement. In March 2000, the outstanding balance under the Yen Credit Agreement
was repaid in full in accordance with its terms.
Products Corporation borrows funds from its affiliates from time to time to
supplement its working capital borrowings at interest rates more favorable to
Products Corporation than interest rates under the Credit Agreement. No such
borrowings were outstanding as of March 31, 2000.
The Company's principal sources of funds are expected to be cash flow
generated from operations (before interest), borrowings under the Credit
Agreement and other existing working capital lines and renewals thereof. The
Credit Agreement, Products Corporation's 8 5/8% Senior Subordinated Notes due
2008 (the "8 5/8% Notes"), Products Corporation's 8 1/8% Senior Notes due 2006
(the "8 1/8% Notes") and Products Corporation's 9% Senior Notes due 2006 (the
"9% Notes") contain certain provisions that by their terms limit Products
Corporation's and/or its subsidiaries' ability to, among other things, incur
additional debt. The Company's principal uses of funds are expected to be the
payment of operating expenses, working capital and capital expenditure
requirements, expenses in connection with the Company's restructuring referred
to above and debt service payments. As required under the Credit Agreement, the
Company used 60% of the Net Proceeds from the sale of its worldwide professional
products line to reduce the aggregate commitment under the Credit Agreement on
March 30, 2000, and used 60% of the Net Proceeds from the sale of its non-core
Plusbelle brand in Argentina in May 2000 to reduce the aggregate commitment
under the Credit Agreement.
The Company estimates that capital expenditures for 2000 will be
approximately $25, including upgrades to the Company's management information
systems. The Company estimates that cash payments related to the restructuring
plans referred to in Note 4 and executive separation costs will be approximately
$48 in 2000. Pursuant to a tax sharing agreement, Revlon, Inc. may be required
to make tax sharing payments to Mafco Holdings Inc. as if Revlon, Inc. were
filing separate income tax returns, except that no payments are required by
Revlon, Inc. if and to the extent that Products Corporation is prohibited under
the Credit Agreement from making tax sharing payments to Revlon, Inc. The Credit
Agreement prohibits Products Corporation from making any tax sharing payments
other than in respect of state and local income taxes. Revlon, Inc. currently
anticipates that, as a result of net operating tax losses and prohibitions
12
<PAGE>
REVLON, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
(DOLLARS IN MILLIONS)
under the Credit Agreement, no cash federal tax payments or cash payments in
lieu of federal taxes pursuant to the tax sharing agreement will be required for
2000.
Products Corporation enters into forward foreign exchange contracts and
option contracts from time to time to hedge certain cash flows denominated in
foreign currencies. There were no forward foreign exchange or option contracts
outstanding at March 31, 2000. Products Corporation had forward foreign exchange
contracts denominated in various currencies of approximately $112.7 (U.S. dollar
equivalent) outstanding at March 31, 1999 and option contracts of approximately
$37.5 at March 31, 1999. Such contracts are entered into to hedge transactions
predominantly occurring within twelve months. If Products Corporation had
terminated these contracts on March 31, 1999 no material gain or loss would have
been realized.
The Company expects that cash flows from operations and funds from currently
available credit facilities and renewals of short-term borrowings will be
sufficient to enable the Company to meet its anticipated cash requirements
during 2000 on a consolidated basis, including for debt service. However, there
can be no assurance that the combination of cash flow from operations, funds
from existing credit facilities and renewals of short-term borrowings will be
sufficient to meet the Company's cash requirements on a consolidated basis. If
the Company is unable to satisfy such cash requirements, the Company could be
required to adopt one or more alternatives, such as reducing or delaying capital
expenditures, restructuring indebtedness, selling other assets or operations, or
seeking capital contributions or loans from affiliates of the Company or issuing
additional shares of capital stock of Revlon, Inc. Products Corporation has had
discussions with an affiliate that is prepared to provide financial support to
Products Corporation of up to $40 on appropriate terms through December 31,
2000. There can be no assurance that any of such actions could be effected, that
they would enable the Company to continue to satisfy its capital requirements or
that they would be permitted under the terms of the Company's various debt
instruments then in effect. Revlon, Inc., as a holding company, will be
dependent on the earnings and cash flow of, and dividends and distributions
from, Products Corporation to pay its expenses and to pay any cash dividend or
distribution on the Class A Common Stock that may be authorized by the Board of
Directors of Revlon, Inc. The terms of the Credit Agreement, the 8 5/8% Notes,
the 8 1/8% Notes and the 9% Notes generally restrict Products Corporation from
paying dividends or making distributions, except that Products Corporation is
permitted to pay dividends and make distributions to Revlon, Inc., among other
things, to enable Revlon, Inc. to pay expenses incidental to being a public
holding company, including, among other things, professional fees such as legal
and accounting, regulatory fees such as Securities and Exchange Commission (the
"Commission") filing fees and other miscellaneous expenses related to being a
public holding company and to pay dividends or make distributions in certain
circumstances to finance the purchase by Revlon, Inc. of its Class A Common
Stock in connection with the delivery of such Class A Common Stock to grantees
under the Revlon, Inc. Second Amended and Restated 1996 Stock Plan, provided
that the aggregate amount of such dividends and distributions taken together
with any purchases of Revlon, Inc. common stock on the open market to satisfy
matching obligations under the excess savings plan may not exceed $6.0 per
annum.
EURO CONVERSION
As part of the European Economic and Monetary Union, a single currency (the
"Euro") will replace the national currencies of the principal European countries
(other than the United Kingdom) in which the Company conducts business and
manufacturing. The conversion rates between the Euro and the participating
nations' currencies were fixed as of January 1, 1999, with the participating
national currencies to be removed from circulation between January 1, 2002 and
June 30, 2002 and replaced by Euro notes and coinage. During the transition
period from January 1, 1999 through December 31, 2001, public and private
entities as well as individuals may pay for goods and services using checks,
drafts, or wire transfers denominated either in the Euro or the participating
country's national currency. Under the regulations governing the transition to a
single currency, there is a "no compulsion, no prohibition" rule which states
13
<PAGE>
REVLON, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
(DOLLARS IN MILLIONS)
that no one can be prevented from using the Euro after January 1, 2002 and no
one is obliged to use the Euro before July 2002. In keeping with this rule, the
Company expects to either continue using the national currencies or the Euro for
invoicing or payments. Based upon the information currently available, the
Company does not expect that the transition to the Euro will have a material
adverse effect on the business or consolidated financial condition of the
Company.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The Company has exposure to market risk both as a result of changing
interest rates and movements in foreign currency exchange rates. The Company's
policy is to manage market risk through a combination of fixed and floating rate
debt, the use of derivative financial instruments and foreign exchange forward
and option contracts. The Company does not hold or issue financial instruments
for trading purposes. The qualitative and quantitative information presented in
Item 7A of the Company's Annual Report on Form 10-K for the year ended December
31, 1999 describes significant aspects of the Company's financial instrument
programs that have material market risk as of December 31, 1999. As referred to
above, in March 2000, Products Corporation reduced the aggregate commitment
under its Credit Agreement and repaid its Yen Credit Agreement. The following
table presents the information required by Item 7A as of March 31, 2000.
<TABLE>
<CAPTION>
EXPECTED MATURITY DATE FOR YEAR ENDED MARCH 31, FAIR VALUE
------------------------------------------------------------------------- MARCH 31,
2001 2002 2003 2004 2005 THEREAFTER TOTAL 2000
-------- -------- -------- -------- -------- ------------ ------- ----------
Debt (US dollar equivalent in millions)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Short-term variable rate (various currencies) $29.0 $ 29.0 $ 29.0
Average interest rate(a) ............... 6.7%
Long-term fixed rate ($US) $1,149.2 1,149.2 644.3
Average interest rate ................. 8.6%
Long-term variable rate ($US) $213.2 213.2 213.2
Average interest rate(a) .............. 10.0%
Long-term variable rate (various currencies) 117.9 117.9 117.9
Average interest rate(a) .............. 8.4%
-------- --------
Total debt $1,509.3 $1,004.4
======== ========
</TABLE>
(a) Weighted average variable rates are based upon implied forward rates from
the yield curves at March 31, 2000.
14
<PAGE>
REVLON, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
(DOLLARS IN MILLIONS)
FORWARD-LOOKING STATEMENTS
This quarterly report on Form 10-Q for the quarter ended March 31, 2000 as
well as other public documents of the Company contains forward-looking
statements that involve risks and uncertainties. The Company's actual results
may differ materially from those discussed in such forward-looking statements.
Such statements include, without limitation, the Company's expectations and
estimates as to the introduction of new products and expansion into markets,
future financial performance, the effect on sales of lower retailer inventory
targets including the timing thereof, the effect on sales of political and/or
economic conditions and competitive activities in certain markets, the Company's
estimate of restructuring activities, costs and benefits, cash flow from
operations, capital expenditures, the Company's qualitative and quantitative
estimates as to market risk sensitive instruments, the Company's expectations
about the effects of the transition to the Euro, the availability of funds from
currently available credit facilities, renewals of short-term borrowings, and
capital contributions or loans from affiliates or the sale of assets or
operations or additional shares of Revlon, Inc. Statements that are not
historical facts, including statements about the Company's beliefs and
expectations, are forward-looking statements. Forward-looking statements can be
identified by, among other things, the use of forward-looking language, such as
"believe," "expects," "may," "will," "should," "seeks," "plans," "scheduled to,"
"anticipates" or "intends" or the negative of those terms, or other variations
of those terms or comparable language, or by discussions of strategy or
intentions. Forward-looking statements speak only as of the date they are made,
and the Company undertakes no obligation to update them. A number of important
factors could cause actual results to differ materially from those contained in
any forward-looking statement. In addition to factors that may be described in
the Company's filings with the Commission, including this filing, the following
factors, among others, could cause the Company's actual results to differ
materially from those expressed in any forward-looking statements made by the
Company: (i) difficulties or delays in developing and introducing new products
or failure of customers to accept new product offerings; (ii) changes in
consumer preferences, including reduced consumer demand for the Company's color
cosmetics and other current products; (iii) difficulties or delays in the
Company's continued expansion into the self-select distribution channel and into
certain markets and development of new markets; (iv) unanticipated costs or
difficulties or delays in completing projects associated with the Company's
strategy to improve operating efficiencies; (v) the inability to renew
short-term borrowings, secure capital contributions or loans from affiliates or
sell assets or operations or additional shares of Revlon, Inc.; (vi) effects of
and changes in political and/or economic conditions, including inflation and
monetary conditions, and in trade, monetary, fiscal and tax policies in
international markets, including but not limited to Brazil; (vii) actions by
competitors, including business combinations, technological breakthroughs, new
products offerings and marketing and promotional successes; (viii) combinations
among significant customers or the loss, insolvency or failure to pay debts by a
significant customer or customers; (ix) lower than expected sales as a result of
difficulties or delays in achieving retailers' inventory target levels; (x)
difficulties, delays or unanticipated costs or less than expected benefits
resulting from the Company's restructuring activities; (xi) interest rate or
foreign exchange rate changes affecting the Company and its market sensitive
financial instruments; and (xii) difficulties, delays or unanticipated costs
associated with the transition to the Euro.
15
<PAGE>
REVLON, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
(DOLLARS IN MILLIONS)
EFFECT OF NEW ACCOUNTING STANDARDS
In June 1998, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards ("SFAS") No. 133, "Accounting for
Derivative Instruments and Hedging Activities," which establishes accounting and
reporting standards for derivative instruments, including certain derivative
instruments embedded in other contracts, and for hedging activities. In June
1999, the FASB issued SFAS No. 137, "Accounting for Derivative Instruments and
Hedging Activities - Deferral of the Effective Date of SFAS No. 133, an
Amendment of SFAS No. 133," which has delayed the required implementation of
SFAS No. 133 such that the Company must adopt this new standard no later than
January 1, 2001. The effect of adopting the new standard by the Company has not
yet been determined. The Company plans to adopt the new standard on January 1,
2001.
PART II - OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS - NONE
----------------------------------------------------------
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
--------------------------------
(a) EXHIBITS -
10.20 Fifth Amendment, dated as of March 6, 2000, to the Amended and
Restated Credit Agreement, dated as of May 30, 1997, as amended, among Revlon
Consumer Products Corporation, the Borrowing Subsidiaries from time to time
parties thereto, the financial institutions from time to time parties thereto,
the Co-Agents named therein, Citibank, N.A., as Documentation Agent, Lehman
Commercial Paper Inc., as Syndication Agent, The Chase Manhattan Bank, as
Administrative Agent and Chase Securities Inc., as Arranger.
10.21 Senior Executive Supplemental Long-Term Incentive Program.
(b) REPORTS ON FORM 8-K - NONE
S I G N A T U R E S
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the registrant has duly caused this report to be signed on its behalf
by the undersigned thereunto duly authorized.
REVLON, INC.
------------
Registrant
By:/s/ Laurence Winoker
-----------------------------------
Laurence Winoker
Senior Vice President, Corporate
Controller and Treasurer
(Chief Accounting Officer)
Dated: May 15, 2000
16
<PAGE>
Exhibit 10.20
FIFTH AMENDMENT
FIFTH AMENDMENT, dated as of March 6, 2000 (this "Amendment"),
to the Amended and Restated Credit Agreement, dated as of May 30, 1997 (as
amended by the First Amendment, dated as of January 29, 1998, the Second
Amendment, dated as of November 6, 1998, the Third Amendment, dated as of
December 23, 1998, the Fourth Amendment, dated as of November 10, 1999, and as
may be further amended, supplemented or otherwise modified from time to time,
the "Credit Agreement"), among Revlon Consumer Products Corporation (the
"Company"), the Borrowing Subsidiaries from time to time parties thereto, the
financial institutions from time to time parties thereto (the "Lenders"), the
Co-Agents named therein, Citibank, N.A., as Documentation Agent, Lehman
Commercial Paper Inc., as Syndication Agent, The Chase Manhattan Bank, as
Administrative Agent and Chase Securities Inc., as Arranger.
W I T N E S S E T H :
WHEREAS, the Company has requested that the Lenders and the
Agents amend a certain provision of the Credit Agreement;
WHEREAS, the Lenders and the Agents are willing to amend such
provision upon the terms and subject to the conditions set forth herein;
NOW, THEREFORE, in consideration of the premises and the
mutual covenants contained herein, the Company, the Lenders and the Agents
hereby agree as follows:
1. Definitions. All terms defined in the Credit Agreement
shall have such defined meanings when used herein unless otherwise defined
herein.
2. Amendment to Section 15. (a) Paragraph (g) of Section 15 of
the Credit Agreement is hereby amended by deleting the reference to A(i)@ and by
deleting clauses (ii) and (iii) in their entirety.
(b) Paragraph (h) of Section 15 of the Credit Agreement is
hereby amended by deleting such paragraph in its entirety and substituting in
lieu thereof the following new paragraph (h):
A(h) Control Persons. (i) Any Person (or group of
Persons acting in concert), other than Ronald O. Perelman or, in the
event of his incompetence or death, his estate, heirs, executor,
administrator, committee or other personal representative and his (or
any of their) Affiliates (without giving effect to clause (a) of the
definition thereof) (collectively, "ROP"), shall "control" the Company,
as such term is used in Rule 405 promulgated under the Securities Act
of 1933, as amended, or (ii) in the event that ROP ceases to so
"control" the Company, any other Person (or group of Persons acting in
concert) shall own, directly or indirectly, more than 25% of the issued
and outstanding voting power of the Company, or (iii) the Continuing
Directors shall cease to constitute at least 66-2/3% of the board of
directors of the Company; or@
<PAGE>
2
3. Conditions to Effectiveness. This Amendment shall become
effective on and as of the date that the Administrative Agent shall have
received counterparts of this Amendment duly executed by the Company, the
Borrowing Subsidiaries and the Required Lenders and duly acknowledged and
consented to by each Guarantor, Grantor and Pledgor. The execution and delivery
of this Amendment by any Lender shall be binding upon each of its successors and
assigns (including Transferees of its Commitments and Loans in whole or in part
prior to effectiveness hereof) and binding in respect of all of its Commitments
and Loans, including any acquired subsequent to its execution and delivery
hereof and prior to the effectiveness hereof.
4. Representations and Warranties. (a) The Company, after
giving effect to the amendment contained herein, hereby represents and warrants
that there are no agreements to which any of Revlon or its Subsidiaries is a
party pursuant to which the failure by Worldwide or Worldwide (Parent) to pay
principal of or interest on any Indebtedness in excess of $500,000 in the
aggregate when due and payable (whether at scheduled maturity or by required
prepayment, acceleration, demand or otherwise) would constitute a default or
event of default thereunder.
(b) The Company, after giving effect to the amendment
contained herein, hereby confirms, reaffirms and restates the representations
and warranties made by it in Section 11 of the Credit Agreement and otherwise in
the Credit Documents to which it is a party; provided that each reference to the
Credit Agreement therein shall be deemed to be a reference to the Credit
Agreement after giving effect to this Amendment.
5. Reference to and Effect on the Credit Documents; Limited
Effect. On and after the date hereof and the satisfaction of the conditions
contained in Section 3 of this Amendment, each reference in the Credit Agreement
to "this Agreement", "hereunder", "hereof" or words of like import referring to
the Credit Agreement, and each reference in the other Credit Documents to "the
Credit Agreement", "thereunder", "thereof" or words of like import referring to
the Credit Agreement, shall mean and be a reference to the Credit Agreement as
amended hereby. The execution, delivery and effectiveness of this Amendment
shall not, except as expressly provided herein, operate as a waiver of any
right, power or remedy of any Lender or the Agents under any of the Credit
Documents, nor constitute a waiver of any provisions of any of the Credit
Documents. Except as expressly amended herein, all of the provisions and
covenants of the Credit Agreement and the other Credit Documents are and shall
continue to remain in full force and effect in accordance with the terms thereof
and are hereby in all respects ratified and confirmed.
6. Counterparts. This Amendment may be executed by one or more
of the parties hereto in any number of separate counterparts (which may include
counterparts delivered by facsimile transmission) and all of said counterparts
taken together shall be deemed to constitute one and the same instrument. Any
executed counterpart delivered by facsimile transmission shall be effective as
an original for all purposes hereof.
<PAGE>
3
7. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
<PAGE>
4
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be executed and delivered by their proper and duly authorized
officers as of the day and year first above written.
REVLON CONSUMER PRODUCTS CORPORATION
By: /s/ Laurence Winoker
---------------------------------------
Name: Laurence Winoker
Title: Senior Vice President Corporate
Controller and Treasurer
DEUTSCHE REVLON GMBH & CO. KG
REVLON INTERNATIONAL CORPORATION
(UK Branch)
REVLON MANUFACTURING LIMITED
(Australia Branch)
REVLON MANUFACTURING (UK) LIMITED
EUROPEENNE DE PRODUITS DE BEAUTE
REVLON NEDERLAND B.V.
REVLON K.K.
REVLON CANADA, INC.
REVLON SA
REVLON-REALISTIC PROFESSIONAL
PRODUCTS LTD.
REVLON PROFESSIONAL LIMITED
REVLON (HONG KONG) LIMITED
EUROPEAN BEAUTY PRODUCTS S.P.A., as
Local Subsidiaries
By: /s/ Robert K. Kretzman
---------------------------------------
Name: Robert K. Kretzman
Title: Authorized Signatory
THE CHASE MANHATTAN BANK, as
Administrative Agent and as a Lender
By: /s/ Neil R. Boylan
---------------------------------------
Name: Neil R. Boylan
Title: Managing Director
CHASE SECURITIES INC., as Arranger
By: /s/ Douglas V. Traver
---------------------------------------
Name: Douglas V. Traver
Title: Managing Director
<PAGE>
5
CITIBANK, N.A., as Documentation Agent and as
a Lender
By: /s/ James Buchanan
----------------------------------------
Name: James Buchanan
Title: Attorney-in-Fact
LEHMAN COMMERCIAL PAPER INC., as
Syndication Agent and as a Lender
By: /s/ Michele Swanson
----------------------------------------
Name: Michele Swanson
Title: Authorized Signatory
ABN AMRO BANK N.V., as a Local Fronting
Lender in the Federal Republic of Germany
By: /s/ David A. Carroll
----------------------------------------
Name: David A. Carroll
Title: Assistant Vice President
By: /s/ J.F. Davis
----------------------------------------
Name: J.F. Davis
Title: Group Vice President
BANKBOSTON, N.A., as a Local Fronting Lender
in the United Kingdom
By:
----------------------------------------
Name:
Title:
<PAGE>
6
NATEXIS BANQUE BFCE, formerly BANQUE
FRANCAISE DU COMMERCE EXTERIEUR, as
a Local Fronting Lender in France
By: /s/ Frank H. Madden, Jr.
----------------------------------------
Name: Frank H. Madden, Jr.
Title: Vice President & Group Manager
By: /s/ Jordan Sadler
----------------------------------------
Name: Jordan Sadler
Title: Assistant Vice President
THE SANWA BANK LTD., as a Local Fronting
Lender in Japan
By:
---------------------------------------
Name:
Title:
BANK OF AMERICA CANADA, as a Local
Fronting Lender in Canada
By: /s/ Donald Carter
---------------------------------------
Name: Donald Carter
Title: Managing Director, Senior Manager
CITIBANK LIMITED, as a Local Fronting Lender
in Australia
By: /s/ James Buchanan
---------------------------------------
Name: James Buchanan
Title: Attorney-in-Fact
CITIBANK, N.A., as a Local Fronting Lender in
Hong Kong
By: /s/ James Buchanan
---------------------------------------
Name: James Buchanan
Title: Attorney-in-Fact
CITIBANK, N.A., as a Local Fronting Lender in the
Netherlands
By: /s/ James Buchanan
---------------------------------------
Name: James Buchanan
Title: Attorney-in-Fact
CITIBANK, N.A., as a Local Fronting Lender
in Italy
By: /s/ James Buchanan
---------------------------------------
Name: James Buchanan
Title: Attorney-in-Fact
<PAGE>
7
ALLIED IRISH BANK, as a Local Fronting Lender
in Ireland
By: /s/ William J. Strickland
------------------------------------
Name: William J. Strickland
Title: Executive Vice President
By: /s/ Germaine Reusch
------------------------------------
Name: Germaine Reusch
Title: Vice President
CITIBANK, N.A., as a Local Fronting
Lender in Spain
By: /s/ James Buchanan
------------------------------------
Name: James Buchanan
Title: Attorney-in-Fact
ABN AMRO BANK N.V.
Boston Office
By: /s/ David A. Carroll
------------------------------------
Name: David A. Carroll
Title: Assistant Vice President
By: /s/ J.F. Davis
------------------------------------
Name: J.F. Davis
Title: Group Vice President
ALLIED IRISH BANK PLC
Cayman Islands Branch
By: /s/ William J. Strickland
------------------------------------
Name: William J. Strickland
Title: Executive Vice President
<PAGE>
8
By: /s/ Germaine Reusch
------------------------------------
Name: Germaine Reusch
Title: Vice President
BANKBOSTON, N.A., as a Co-Agent
By:
------------------------------------
Name:
Title:
BANK OF AMERICA, N.A. (formerly
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION), as a Co-Agent
By: /s/ Robert Klawinski
--------------------------------------
Name: Robert Klawinski
Title: Managing Director
THE BANK OF NEW YORK
By:
--------------------------------------
Name:
Title:
NATEXIS BANQUE BFCE, formerly BANQUE
FRANCAISE DU COMMERCE EXTERIEUR, as
a Co-Agent
By: /s/ Frank H. Madden, Jr.
--------------------------------------
Name: Frank H. Madden, Jr.
Title: Vice President & Group Manager
By: /s/ Jordan Sadler
--------------------------------------
Name: Jordan Sadler
Title: Assistant Vice President
PARIBAS
By:
--------------------------------------
Name:
Title:
<PAGE>
9
By:
--------------------------------------
Name:
Title:
BARCLAYS BANK PLC
By: /s/ Edward G. Hamway, Jr.
--------------------------------------
Name: Edward G. Hamway, Jr.
Title: Director
CREDIT AGRICOLE INDOSUEZ
By:
-------------------------------------
Name:
Title:
By:
-------------------------------------
Name:
Title:
CREDIT LYONNAIS, New York Branch
By:
-------------------------------------
Name:
Title:
CREDIT SUISSE FIRST BOSTON, as a Co-Agent
By: /s/ Joel Glodowski
-------------------------------------
Name: Joel Glodowski
Title: Managing Director
By: /s/ Chris T. Horgan
-------------------------------------
Name: Chris T. Horgan
Title: Vice President
EATON VANCE INSTITUTIONAL SENIOR
LOAN FUND
By EATON VANCE MANAGEMENT, as
Investment Manager
By: /s/ Payson F. Swaffield
-------------------------------------
Name: Payson F. Swaffield
Title: Vice President
<PAGE>
10
U.S. BANK NATIONAL ASSOCIATION, as a
Co-Agent
By: /s/ Elliot Jaffee
-------------------------------------
Name: Elliott Jaffee
Title: Senior Vice President
THE FUJI BANK, LIMITED, New York Branch,
as a Co-Agent
By:
------------------------------------
Name:
Title:
GENERAL ELECTRIC CAPITAL
CORPORATION, as a Co-Agent
By:
------------------------------------
Name:
Title:
MERRILL LYNCH SENIOR FLOATING RATE
FUND, INC.
By: /s/ John Johnson
------------------------------------
Name: John Johnson
Title: Vice President
THE MITSUBISHI TRUST AND BANKING
CORPORATION
By: /s/ Toshihiro Hayashi
------------------------------------
Name: Toshihiro Hayashi
Title: Senior Vice President
BANK OF AMERICA, N.A. (formerly
NATIONSBANK, N.A.)
By: /s/ Robert Klawinski
------------------------------------
Name: Robert Klawinski
Title: Managing Director
<PAGE>
11
THE SANWA BANK, LIMITED
NEW YORK BRANCH
By:
------------------------------------
Name:
Title:
VAN KAMPEN CLO I, LIMITED
By VAN KAMPEN MANAGEMENT INC., as
Collateral Manager
By: /s/ Howard Tiffen
----------------------------------
Name: Howard Tiffen
Title: Senior Vice President
VAN KAMPEN PRIME RATE INCOME TRUST
By VAN KAMPEN INVESTMENT ADVISORY CORP.
By: /s/ Howard Tiffen
----------------------------------
Name: Howard Tiffen
Title: Senior Vice President
ROYAL BANK OF CANADA
By:
----------------------------------
Name:
Title:
SENIOR DEBT PORTFOLIO
By BOSTON MANAGEMENT AND
RESEARCH, as Investment Advisor
By: /s/ Payson F. Swaffield
----------------------------------
Name: Payson F. Swaffield
Title: Vice President
STRATA FUNDING LTD.
By: INVESCO Senior Secured Management,
Inc., as Sub-Managing Agent
By: /s/ Anne M. McCarthy
----------------------------------
Name: Anne M. McCarthy
Title: Authorized Signatory
<PAGE>
12
CERES FINANCE LTD.
By: INVESCO Senior Secured Management,
Inc., as Sub-Managing Agent
By: /s/ Anne M. McCarthy
--------------------------------
Name: Anne M. McCarthy
Title: Authorized Signatory
MEDICAL LIABILITY MUTUAL INSURANCE COMPANY
By: Invesco Senior Secured Management, Inc.
as Investment Manager
By:
--------------------------------
Name:
Title:
<PAGE>
13
ACKNOWLEDGEMENT AND CONSENT
Dated as of March 6, 2000
Each of the undersigned (in its capacity as a Guarantor,
Grantor and/or Pledgor, as the case may be, under the Security Documents to
which it is a party) does hereby (a) consent, acknowledge and agree to the
transactions described in the foregoing Fifth Amendment and (b) after giving
effect to such Fifth Amendment, (i) confirms, reaffirms and restates the
representations and warranties made by it in each Credit Document to which it is
a party, (ii) ratifies and confirms each Security Document to which it is a
party and (iii) confirms and agrees that each such Security Document is, and
shall continue to be, in full force and effect, with the Collateral described
therein securing, and continuing to secure, the payment of all obligations of
the undersigned referred to therein; provided that each reference to the Credit
Agreement therein and in each of the other Credit Documents shall be deemed to
be a reference to the Credit Agreement after giving effect to such Fifth
Amendment.
ALMAY, INC. REVLON, INC.
AMERICAN CREW, INC. REVLON CONSUMER CORP.
AMERINAIL, INC. REVLON CONSUMER PRODUCTS
A.P. PRODUCTS LTD. CORPORATION
CARRINGTON PARFUMS LTD. REVLON GOVERNMENT SALES, INC.
CHARLES OF THE RITZ GROUP LTD. REVLON HOLDINGS INC.
CHARLES REVSON INC. REVLON INTERNATIONAL CORPORATION
COSMETIQUES HOLDINGS, INC. REVLON PRODUCTS CORP.
CREATIVE NAIL DESIGN, INC. REVLON PROFESSIONAL, INC.
FERMODYL PROFESSIONALS INC. REVLON PROFESSIONAL PRODUCTS INC.
MODERN ORGANIC PRODUCTS, INC. REVLON REAL ESTATE CORPORATION
NEW ESSENTIALS LIMITED REVLON RECEIVABLES SUBSIDIARY, INC.
NORELL PERFUMES, INC. RIROS CORPORATION
NORTH AMERICA REVSALE INC. RIROS GROUP INC.
OXFORD PROPERTIES CO. RIT INC.
PACIFIC FINANCE & DEVELOPMENT CORP. ROUX LABORATORIES, INC.
PPI TWO CORPORATION VISAGE BEAUTE COSMETICS, INC.
PPI FOUR CORPORATION
PRESTIGE FRAGRANCES, LTD.
REALISTIC/ROUX PROFESSIONAL PRODUCTS
INC. By: /s/ Robert K. Kretzman
-----------------------------
Name: Robert K. Kretzman
Title: Vice President
<PAGE>
Exhibit 10.21
SENIOR EXECUTIVE LONG-TERM INCENTIVE PROGRAM
MARCH 30, 2000
ELIGIBILITY: Senior executives selected by the President and Chief Executive
Officer as being directly responsible for significant revenue or profit
generation or key policy making.
PARTICIPATION: Participants shall be selected not later than March 30 of the
first year of a Performance Period. At the time of selection, participants shall
be designated to participate in the Program in Tier 1, Tier 2 or Tier 3,
provided that participants' participation levels may be changed during the
Performance Period to reflect changes in their level of revenue or profit
responsibility or policy-making during the Performance Period. Notwithstanding
the foregoing, an employee who is hired for or promoted to a position of
eligibility after the beginning of a Performance Period may become a participant
on a pro rated award basis at any time during the first two years of a
Performance Period.
PERFORMANCE PERIOD: A three calendar year period selected by the President and
Chief Executive Officer to be a Performance Period for purposes of the Program.
The first Performance Period shall be the period commencing January 1, 2000 and
ending December 31, 2002.
AWARDS: If corporate and personal objectives (the "Objectives") determined at
the beginning of a Performance Period are fully achieved during a Performance
Period, participants in Tier 1 will be paid a lump sum of $500,000, those in
Tier 2 shall be paid a
lump sum of $250,000, and those in Tier 3 shall be paid a lump sum of $125,000,
in each case less amounts required by law to be withheld.
OBJECTIVES: For the first Performance Period, (a) the Corporate Objectives are
cumulative consolidated net sales of more than $5.5 billion and cumulative
consolidated operating income of more than $540 million, subject to adjustment
to reflect the effects of any extraordinary material transactions during such
period such as acquisitions, divestitures or restructurings, and (b) each
participant's Personal Objectives shall be full achievement of his or her
Division's, Brand's, Product Category's or Region's long-term strategic
objectives, goals, strategies and measures for such Performance Period, such
milestones to be established annually by the President and Chief Executive
Officer in consultation with the executive's direct supervisor, if applicable,
except that participants whose compensation is subject to Section 162m of the
Internal Revenue Code shall not have Personal Objectives. No award shall be
payable unless the Corporate Objectives are at least achieved and Personal
Objectives are at least 75% achieved. The participant's progress toward
achievement of Personal Objectives shall be reviewed at least quarterly with the
President and Chief Executive Officer (and direct supervisor, if applicable). If
Personal Objectives for the Performance Period are at least 75% achieved
(weighted as the President and Chief Executive Officer may specify), the
participant will receive a percentage of the award provided for above equal to
the percentage of Personal Objective achievement. The lump sum payable to a
participant who is selected for participation, or whose participation level is
changed, during a Performance Period shall be prorated to reflect the portion of
the
Performance Period during which he or she was a participant or the relative
periods during which he or she participated at the different levels, as the case
may be.
FORFEITURE: All amounts accrued under the Program for a participant shall be
forfeited if the participant's employment with the Company is terminated prior
to payment of his or her award under circumstances not entitling the participant
to severance under applicable policies of the Company or under any employment
agreement or offer letter between the Company and the participant, except that a
participant who dies, becomes disabled or retires with the Company's consent
during the Performance Period may, in the discretion of the President and Chief
Executive Officer, receive an award pro rated for the number of months of the
Performance Period for which an award is to be made that the participant was
employed prior to his or her death, disability or retirement. If a participant's
employment is terminated prior to such award under circumstances entitling him
or her to severance and the participant's progress toward achieving personal
objectives was evaluated as on course toward at least 75% achievement of
Personal Objectives for at least two of his or her three most recent quarterly
reviews, the executive will be entitled to a pro rata payment of the Program
award based on the number of months of such Performance Period during which he
or she was employed. No payments of pro rata Program awards shall be made until
and unless awards are made to participants who remain employed to the date for
full payment.
GENERAL: The President and Chief Executive Officer shall be the administrator of
the Plan and all questions related to its interpretation and administration
shall be determined by him in his sole discretion. In administering the Plan,
the President and Chief Executive
Officer shall not be required to make any such determinations in a manner
consistent between different participants or circumstances. Designation of an
executive as a participant in the Plan shall not confer any right to continued
employment. Revlon reserves the right to terminate or modify the Plan at any
time, provided that should it do so appropriate action shall be taken to
preserve for the participant's benefit amounts that would have been payable
under the Plan if the participant had terminated employment under circumstances
entitling him or her to severance immediately prior to such termination or
modification.
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-START> JAN-01-2000
<PERIOD-END> MAR-31-2000
<CASH> 27,800
<SECURITIES> 0
<RECEIVABLES> 258,000
<ALLOWANCES> 19,100
<INVENTORY> 219,500
<CURRENT-ASSETS> 532,700
<PP&E> 514,500
<DEPRECIATION> 230,100
<TOTAL-ASSETS> 1,232,200
<CURRENT-LIABILITIES> 512,200
<BONDS> 1,480,300
0
54,600
<COMMON> 500
<OTHER-SE> (1,052,800)
<TOTAL-LIABILITY-AND-EQUITY> 1,232,200
<SALES> 468,000
<TOTAL-REVENUES> 468,000
<CGS> 168,500
<TOTAL-COSTS> 168,500
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 1,400
<INTEREST-EXPENSE> 39,400
<INCOME-PRETAX> (24,200)
<INCOME-TAX> 3,700
<INCOME-CONTINUING> (27,900)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (27,900)
<EPS-BASIC> (0.54)
<EPS-DILUTED> (0.54)
</TABLE>
