<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, 1997
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 33-60488
REVLON WORLDWIDE CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 13-3703363
(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 [ ]
The number of shares outstanding of the registrant's common stock was 1,000
shares as of March 31, 1997, all of which were held by Revlon Worldwide
(Parent) Corporation, an indirect wholly owned subsidiary of Mafco Holdings,
Inc.
Total Pages - 13
<PAGE>
REVLON WORLDWIDE CORPORATION AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
(DOLLARS IN MILLIONS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
ASSETS 1997 1996
---------- ----------
<S> <C> <C>
Current assets: (Unaudited)
Cash and cash equivalents ............................. $ 35.6 $ 38.6
Trade receivables, less allowances of $22.3
and $24.9, respectively ...................... 394.5 426.3
Inventories ........................................... 305.9 281.0
Prepaid expenses and other ............................ 80.5 74.5
---------- ----------
Total current assets ......................... 816.5 820.4
Property, plant and equipment, net ............................ 374.0 381.1
Other assets .................................................. 142.8 144.2
Intangible assets related to businesses acquired, net ......... 279.7 280.6
---------- ----------
Total assets ................................. $ 1,613.0 $ 1,626.3
========== ==========
LIABILITIES AND STOCKHOLDER'S DEFICIENCY
Current liabilities:
Short-term borrowings - third parties ................. $ 23.4 $ 27.1
Current portion of long-term debt - third parties ..... 8.4 8.8
Accounts payable ...................................... 146.8 161.9
Accrued expenses and other ............................ 321.4 365.2
---------- ----------
Total current liabilities .................... 500.0 563.0
Long-term debt - third parties ................................ 1,705.9 2,291.4
Long-term debt - affiliates ................................... 30.4 30.4
Other long-term liabilities ................................... 202.4 202.8
Stockholder's deficiency:
Common Stock, par value $1.00 per share; 1,000 shares
authorized, issued and outstanding ........... - -
Capital deficiency .................................... (235.9) (971.0)
Accumulated deficit since June 24, 1992 ............... (568.5) (472.1)
Adjustment for minimum pension liability .............. (12.4) (12.4)
Currency translation adjustment ....................... (8.9) (5.8)
---------- ----------
Total stockholder's deficiency ............... (825.7) (1,461.3)
---------- ----------
Total liabilities and stockholder's deficiency $ 1,613.0 $ 1,626.3
========== ==========
</TABLE>
See Notes to Unaudited Consolidated Condensed Financial Statements.
2
<PAGE>
REVLON WORLDWIDE CORPORATION AND SUBSIDIARIES
UNAUDITED CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(DOLLARS IN MILLIONS)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
------------------
1997 1996
-------- --------
<S> <C> <C>
Net sales ......................................................... $ 492.5 $ 464.3
Cost of sales ..................................................... 166.2 152.9
-------- --------
Gross profit .................................................. 326.3 311.4
Selling, general and administrative expenses ...................... 303.8 295.1
Business consolidation costs ...................................... 5.4 -
-------- --------
Operating income .............................................. 17.1 16.3
-------- --------
Other expenses (income):
Interest expense .............................................. 59.4 59.5
Interest and net investment income ............................ (0.7) (1.0)
Amortization of debt issuance costs ........................... 3.1 3.6
Foreign currency losses, net .................................. 1.8 2.1
Miscellaneous, net ............................................ 0.7 0.5
Gain on issuance of subsidiary stock .......................... (0.1) (187.8)
-------- --------
Other expenses (income), net ............................. 64.2 (123.1)
-------- --------
(Loss) income before income taxes ................................. (47.1) 139.4
Provision for income taxes ........................................ 5.5 7.0
-------- --------
(Loss) income before extraordinary item ........................... (52.6) 132.4
Extraordinary item - early extinguishment of debt ................. (43.8) (6.6)
-------- --------
Net (loss) income ................................................. $ (96.4) $ 125.8
======== ========
</TABLE>
See Notes to Unaudited Consolidated Condensed Financial Statements.
3
<PAGE>
REVLON WORLDWIDE CORPORATION AND SUBSIDIARIES
UNAUDITED CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(DOLLARS IN MILLIONS)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
------------------
CASH FLOWS FROM OPERATING ACTIVITIES: 1997 1996
-------- --------
<S> <C> <C>
Net (loss) income ................................................ $ (96.4) $ 125.8
Adjustments to reconcile net (loss) income to net cash (used for)
provided by operating activities:
Depreciation and amortization ................................. 25.7 23.2
Amortization of debt discount ................................. 26.1 25.2
Gain on issuance of subsidiary stock .......................... (0.1) (187.8)
Business consolidation costs .................................. 5.4 -
Extraordinary item ............................................ 43.8 6.6
Change in assets and liabilities:
Decrease in trade receivables ........................... 26.0 3.7
Increase in inventories .................................. (27.9) (36.4)
Increase in prepaid expenses and other current assets .... (7.9) (9.8)
Decrease in accounts payable ............................. (12.4) (8.7)
Decrease in accrued expenses and other current liabilities (44.9) (31.3)
Other, net ............................................... (17.5) (10.9)
-------- --------
Net cash used for operating activities ........................... (80.1) (100.4)
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures ............................................. (8.0) (11.8)
Other, net ....................................................... - (0.3)
-------- --------
Net cash used for investing activities ........................... (8.0) (12.1)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net (decrease) increase in short-term borrowings - third parties . (2.4) 0.4
Proceeds from the issuance of long-term debt - third parties ..... 138.2 140.3
Repayment of long-term debt - third parties ...................... (50.4) (222.5)
Net proceeds from issuance of subsidiary common stock ............ 0.1 187.8
Proceeds from the issuance of debt - affiliates .................. 33.9 19.4
Repayment of debt - affiliates ................................... (33.9) (19.4)
Payment of debt issuance costs ................................... - (10.9)
-------- --------
Net cash provided by financing activities ........................ 85.5 95.1
-------- --------
Effect of exchange rate changes on cash and cash equivalents ..... (0.4) (0.5)
-------- --------
Net decrease in cash and cash equivalents ..................... (3.0) (17.9)
-------- --------
Cash and cash equivalents at beginning of period .............. 38.6 36.3
-------- --------
Cash and cash equivalents at end of period .................... $ 35.6 $ 18.4
======== ========
Supplemental schedule of cash flow information:
Cash paid during the period for:
Interest ................................................. $ 39.6 $ 43.7
Income taxes, net of refunds ............................. 2.9 5.0
Supplemental schedule of noncash financing activities:
Noncash contribution from parent to cancel Senior Secured
Discount Notes ........................................... $ 735.1 $ -
</TABLE>
See Notes to Unaudited Consolidated Condensed Financial Statements.
4
<PAGE>
REVLON WORLDWIDE CORPORATION AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED CONDENSED FINANCIAL
STATEMENTS
(DOLLARS IN MILLIONS, EXCEPT PER SHARE DATA)
(1) BASIS OF PRESENTATION
Revlon Worldwide Corporation (the "Company") is a holding company formed
in March 1993 to hold the capital stock of Revlon, Inc., which was formed in
April 1992 and, on June 24, 1992, succeeded through Revlon Consumer Products
Corporation ("Products Corporation") to assets and liabilities of the cosmetic
and skin care, fragrances and personal care products business of its then
parent company, whose name was changed from Revlon, Inc. to Revlon Holdings
Inc. ("Holdings"). The Company is a wholly owned subsidiary of Revlon Worldwide
(Parent) Corporation ("Worldwide Parent") which is an indirect wholly owned
subsidiary of Holdings and an indirect wholly owned subsidiary of MacAndrews &
Forbes Holdings Inc., a corporation wholly owned by Mafco Holdings Inc.
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. Further, 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 Company recognizes gains and losses on issuances of subsidiary stock
in its Statements of Operations.
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, due, in part, to seasonal fluctuations which are
normal for the Company's business.
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, in the first quarter of 1997 and
1996, disbursements and commitments for advertising and promotion exceeded
advertising and promotion expenses by $22.2 and $14.9, respectively, and such
amounts were deferred.
(2) INVENTORIES
March 31, December 31,
1997 1996
-------- -----------
Raw materials and supplies.............. $ 94.2 $ 76.6
Work-in-process......................... 21.4 19.4
Finished goods.......................... 190.3 185.0
-------- --------
$ 305.9 $ 281.0
======== ========
(3) GAIN ON ISSUANCE OF SUBSIDIARY STOCK
On March 5, 1996, Revlon, Inc. completed an initial public offering (the
"Revlon IPO") in which it issued and sold 8,625,000 shares of its Class A
Common Stock for $24.00 per share. The proceeds, net of underwriter's discount
and related fees and expenses, of $187.8 were contributed to Products
Corporation and were used to repay borrowings outstanding under the credit
agreement in effect at that time (the "Former Credit Agreement") and to pay
fees and expenses related to the credit agreement which became effective on
March 5, 1996 (the "Credit Agreement").
5
<PAGE>
REVLON WORLDWIDE CORPORATION AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED CONDENSED FINANCIAL
STATEMENTS
(DOLLARS IN MILLIONS, EXCEPT PER SHARE DATA)
As a result of the Revlon IPO, the Company's ownership in Revlon, Inc.
was reduced to 83.1% of Revlon, Inc.'s outstanding common stock (with the
Company having approximately 97.4% of the voting power of the outstanding
shares of Revlon, Inc. common stock) from 100% prior to the Revlon IPO.
Additionally, the Company recognized a $187.8 gain on this transaction in
the first quarter of 1996.
(4) EXTRAORDINARY ITEM
The extraordinary item in the first quarter of 1997 resulted from the
cancellation of a portion of the Senior Secured Discount Notes due 1998(the
"Notes") (See Note 7). The extraordinary item in the first quarter of 1996
resulted from the write-off of deferred financing costs associated with the
extinguishment of the Former Credit Agreement prior to maturity with the net
proceeds from the Revlon IPO and Credit Agreement.
(5) BUSINESS CONSOLIDATIONS
In the first quarter of 1997 the Company incurred business consolidation
costs of approximately $5.4 in connection with the implementation of its
business strategy to rationalize factory operations. These costs primarily
included severance and other related costs in certain International operations.
As of March 31, 1997 substantially all of the costs were included in accrued
expenses and other.
(6) MERGER OF SUBSIDIARY
On April 25, 1997, Prestige Fragrance & Cosmetics, Inc., a wholly owned
subsidiary of Products Corporation ("PFC"), and The Cosmetic Center, Inc.
("Cosmetic Center") completed the merger of PFC with and into Cosmetic Center,
with Cosmetic Center surviving the merger (the "Cosmetic Merger"). In the
Cosmetic Merger, Products Corporation received in exchange for all of the
capital stock of PFC newly issued Class C common stock of Cosmetic Center
constituting approximately 85% of the outstanding common stock. Accordingly,
the Cosmetic Merger will be accounted for as a reverse acquisition using the
purchase method of accounting and PFC will be considered the acquiring entity
for accounting purposes, even though Cosmetic Center is the surviving legal
entity.
(7) PURCHASE OF THE NOTES
During March 1997, $778.4 principal amount at maturity (accreted value
of $694.0) of the Notes was delivered to the Trustee under the Indenture for
cancellation. On April 2, 1997, funds were deposited in an irrevocable trust
to effect the covenant defeasance of the remaining balance of $337.4 principal
amount at maturity of the Notes. In connection with the Notes that were
canceled the Company recorded a capital contribution of $735.1 and recorded
an extraordinary loss of $43.8, which included the write-off of deferred
financing costs, in the first quarter of 1997.
The covenant defeasance of the Notes is expected to be effected on
August 4, 1997, the 124th day following the deposit. Upon such effectiveness of
the covenant defeasance, the Company may omit to comply with substantially all
of its covenants and other obligations, other than payment, under the indenture
governing the Notes.
Following the covenant defeasance, the Company will be merged with and
into its direct parent, Worldwide Parent with Worldwide Parent surviving (the
"Merger"), and Worldwide Parent will directly own all of the shares of Common
Stock of Revlon, Inc. that are currently owned by the Company and are currently
pledged to secure the Company's Notes. Following the Merger, 20 million shares
of Revlon, Inc. Common Stock will be pledged to secure the indebtedness of
Worldwide Parent and the balance to secure the obligations of an affiliate.
6
<PAGE>
REVLON WORLDWIDE CORPORATION AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
(DOLLARS IN MILLIONS)
OVERVIEW
The Company operates in a single business segment with many different
products, which include an extensive array of glamorous, exciting and
innovative cosmetics and skin care, fragrance and personal care products, and
professional products, consisting of hair and nail care products principally
for use in and resale by professional salons. In addition, the Company also
operates retail outlet stores and has a licensing group.
The Company presents its business geographically as its United States
operation, which comprises the Company's business in the United States, and its
International operation, which comprises its business outside of the United
States.
RESULTS OF OPERATIONS
The following table sets forth the Company's net sales by operation for
the first quarters of 1997 and 1996, respectively:
Quarter Ended March 31,
----------------------
1997 1996
Net sales: ------- -------
United States........................... $ 282.5 $ 259.6
International........................... 210.0 204.7
------- -------
$ 492.5 $ 464.3
======= =======
The following sets forth certain statements of operations data as a
percentage of net sales for the first quarters of 1997 and 1996, respectively:
Quarter Ended March 31,
----------------------
1997 1996
------- -------
Cost of sales........................... 33.7% 32.9%
Gross profit............................ 66.3 67.1
Selling, general and administrative
expenses........................... 61.7 63.6
Business consolidation costs............ 1.1 -
Operating income........................ 3.5 3.5
Net sales
Net sales were $492.5 and $464.3 for the first quarter of 1997 and 1996,
respectively, an increase of $28.2, or 6.1%, primarily as a result of
successful new product introductions worldwide, increased demand in the United
States, increased distribution internationally into the expanding self-select
distribution channel and the further development of new international markets.
United States. The United States operation's net sales increased to
$282.5 for the first quarter of 1997 from $259.6 for the first quarter of 1996,
an increase of $22.9, or 8.8%. Net sales improved for the first quarter of 1997
primarily as a result of continued consumer acceptance of new product offerings
and general improvement in consumer demand for the Company's color cosmetics in
the United States, partially offset by overall softness in the fragrance
industry and lower sales of one of the Company's prestige brands. The Company
improved the dollar share of its Revlon branded cosmetics in the color
cosmetics business in the United States self-select distribution channel to
21.9% in the first quarter of 1997 from 21.6% in the first quarter of 1996,
continuing as the number one brand in market share. Market share, which is
subject to a number of conditions, can vary from quarter to quarter as a result
of such things as
7
<PAGE>
REVLON WORLDWIDE CORPORATION AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
(DOLLARS IN MILLIONS)
timing of new product introductions and advertising and promotional spending.
New product introductions (including, in 1997, certain products launched during
1996) generated incremental net sales in the first quarter of 1997, principally
as a result of launches of products in the COLORSTAY collection, including
COLORSTAY foundation, lip makeup, eye makeup, and blush, launches of products
in the ALMAY AMAZING collection, including lip makeup, eye makeup, face makeup
and concealer and launches of REVLON AGE DEFYING line extensions, STREETWEAR
nail enamel and NEW COMPLEXION face makeup.
International. The International operation's net sales increased to
$210.0 for the first quarter of 1997 from $204.7 for the first quarter of 1996,
an increase of $5.3, or 2.6% on a reported basis or 6.3% on a constant U.S.
dollar basis. Net sales improved principally as a result of successful new
product introductions, including the continued roll-out of the COLORSTAY
cosmetics collection and REVLON AGE DEFYING makeup, increased distribution into
the expanding self-select distribution channel, the further development of new
international markets, partially offset, on a reported basis, by the
unfavorable effect on sales of a stronger U.S. dollar against certain foreign
currencies, primarily the Spanish peseta and several other European currencies,
the South African rand and the Japanese yen and partially offset by sales lost
in exiting the unprofitable demonstrator-assisted channel in Japan. The
International operation's sales are divided into the following geographic
areas: Europe, which is comprised of Europe, the Middle East and Africa (in
which net sales increased by 0.2% to $95.4 for the first quarter of 1997 as
compared to the first quarter of 1996); the Western Hemisphere, which is
comprised of Canada, Mexico, Central America, South America and Puerto Rico (in
which net sales increased by 12.0% to $74.7 for the first quarter of 1997 as
compared to the first quarter of 1996); and the Far East (in which net sales
decreased by 6.8% to $39.9 for the first quarter of 1997 as compared to the
first quarter of 1996). Excluding in both periods the effect of the Company's
strategy of exiting the demonstrator-assisted distribution channel in Japan,
Far East net sales for the first quarter of 1997 would have been at the same
level as those in the first quarter of 1996.
The Company's operations in Brazil are significant and, along with
operations in certain other countries, have been subject to, and may continue
to be subject to, significant political and economic uncertainties. In Brazil,
net sales, operating income and income before taxes were $34.4, $6.8 and $4.4,
respectively, for the first quarter of 1997 compared to $31.6, $7.3 and $6.0,
respectively, for the first quarter of 1996. In Mexico, operating results for
the first quarter of 1997 and 1996 were adversely affected by the continued
weakness of the Mexican economy. Effective January 1997, Mexico is considered a
hyperinflationary economy. In Venezuela, operating results for the first
quarter of 1997 and 1996 were adversely affected by high inflation and in the
1996 period by a currency devaluation.
Cost of sales
As a percentage of net sales, cost of sales was 33.7% for the first
quarter of 1997 compared to 32.9% for the first quarter of 1996, respectively.
The increase in cost of sales as a percentage of net sales is due primarily to
changes in product mix involving an increase in sales of the Company's higher
cost enhanced performance technology-based products, an increase in export
sales, increased sales of lower margin products (such as those products sold in
Brazil), the effect of weaker local currencies on the cost of imported
purchases and competitive pressures on the Company's toiletries business in
certain international markets. This was partially offset by the benefits of
improved overhead absorption against higher production volumes and more
efficient global production and purchasing. The aforementioned increases in
sales that negatively impacted cost of sales as a percentage of net sales were,
however, more profitable to the Company's overall operating results.
Selling, general & administrative ("SG&A") expenses
As a percentage of net sales, SG&A expenses were 61.7% for the first
quarter of 1997, an improvement from 63.6% for the first quarter of 1996. SG&A
expenses other than advertising expense, as a percentage of net sales, improved
to 45.4% for the first quarter of 1997 compared with 47.3% for the first
quarter of 1996 primarily as a result of reduced general and administrative
expenses, improved productivity and lower distribution costs in the first
quarter of 1997 compared with the first quarter of 1996. In accordance with its
business strategy, the Company increased advertising and consumer-directed
promotion in the first quarter of 1997 compared with the first quarter of 1996
to support growth in existing product lines, new product launches and increased
distribution in the
8
<PAGE>
REVLON WORLDWIDE CORPORATION AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
(DOLLARS IN MILLIONS)
self-select distribution channel in many of the Company's markets in the
International operation. Advertising expense increased by 5.9% to $80.2, or
16.3% of net sales, for the first quarter of 1997 compared to $75.7, or 16.3%
of net sales, for the first quarter of 1996.
Business consolidation costs
In the first quarter of 1997 the Company incurred business consolidation
costs of approximately $5.4 in connection with the implementation of its
business strategy to rationalize factory operations. These costs primarily
included severance and other related costs in certain International operations.
These business consolidations are intended to lower the Company's operating
costs and increase efficiency in the future. Facilities relating to such
operations are held for sale, and the Company believes it may realize a gain
based upon current estimated market values.
Operating income
As a result of the foregoing, operating income increased by $0.8, or
4.9%, to $17.1 for the first quarter of 1997 from $16.3 for the first quarter
of 1996.
Other expenses/income
Interest expense was $59.4 for the first quarter of 1997 compared to
$59.5 for the first quarter of 1996. The decrease in interest expense is
attributable to lower average outstanding borrowings under the Credit Agreement
and lower interest rates under the Credit Agreement than under the Former
Credit Agreement, partially offset by the higher accreted value of the
Company's Notes, prior to the cancellation. .
Foreign currency losses, net, were $1.8 for the first quarter of 1997
compared to $2.1 for the first quarter of 1996. The reduction in the foreign
currency loss in the first quarter of 1997 as compared to the first quarter of
1996 was due to a stable Venezuelan bolivar versus the devaluation which
occurred in the first quarter of 1996, partially offset by the relatively
greater strengthening of the U.S. dollar and U.K. pound against most foreign
currencies.
Gain on issuance of subsidiary stock in the amount of $187.8 was
recognized as a result of the Revlon IPO in the first quarter of 1996.
Provision for income taxes
The provision for income taxes was $5.5 and $7.0 for the first quarter of
1997 and the first quarter of 1996, respectively. The decrease was primarily
attributable to the implementation of tax planning involving the utilization of
net operating loss carryforwards in certain International operations, partially
offset by higher taxable income in certain International operations.
Extraordinary item
The extraordinary item in the first quarter of 1997 resulted from the
cancellation of a portion of the Notes as well as the write-off of the deferred
financing costs associated with the cancellation. The extraordinary item in the
first quarter of 1996 resulted from the write-off of deferred financing costs
associated with the extinguishment of the Former Credit Agreement prior to
maturity with the net proceeds from the Revlon IPO and Credit Agreement.
9
<PAGE>
REVLON WORLDWIDE CORPORATION AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
(DOLLARS IN MILLIONS)
FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES
Net cash used for operating activities was $80.1 and $100.4 for the first
quarter of 1997 and 1996, respectively. The decrease in net cash used for
operating activities for the first quarter of 1997 compared with the first
quarter of 1996 resulted primarily from higher operating income, lower taxes
paid, net of refunds, and improved working capital management.
Net cash used for investing activities was $8.0 and $12.1 for the first
quarter of 1997 and 1996, respectively. Net cash used for investing activities
for the first quarter of 1997 and 1996, respectively, consisted primarily of
capital expenditures.
Net cash provided by financing activities was $85.5 and $95.1 for the
first quarter of 1997 and 1996, respectively. Net cash provided by financing
activities for 1997 included cash drawn under the Credit Agreement, partially
offset by the repayment of approximately $4.6 under the Company's
yen-denominated credit agreement (the "Yen Credit Agreement"). Net cash
provided by financing activities for 1996 included the net proceeds from the
Revlon IPO, cash drawn under the Former Credit Agreement and under the Credit
Agreement, partially offset by the repayment of borrowings under the Former
Credit Agreement, the payment of fees and expenses related to the Credit
Agreement and repayment of approximately $5.2 under the Yen Credit Agreement.
The Credit Agreement is comprised of four senior secured facilities: a
$130.0 term loan facility, a $220.0 multi-currency facility, a $200.0 revolving
acquisition facility and a $50.0 special standby letter of credit facility. As
of March 31, 1997 Products Corporation had approximately $129.0 outstanding
under the term loan facility, $112.6 outstanding under the multi-currency
facility, $37.0 outstanding under the revolving acquisition facility and $34.5
outstanding under the special standby letter of credit facility. In January
1997, the Credit Agreement was amended to, among other things, permit the
merger of PFC into Cosmetic Center and generally to exclude Cosmetic Center (as
the survivor of the merger) from the definition of "subsidiary" under the
Credit Agreement. In accordance with scheduled reductions, the term loan
facility was reduced by $1.0 on January 31, 1997. Products Corporation signed a
commitment letter dated May 2, 1997 pursuant to which a lender will arrange a
syndicate of lenders for a $750 credit facility, the proceeds of which would be
used to refinance, at lower interest rates and on more favorable terms, the
Credit Agreement and to redeem Products Corporation's 10 7/8% Sinking Fund
Debentures due 2010. The refinancing is subject to a number of conditions
including syndication, due diligence and execution of definitive documentation
and there can be no assurance that the refinancing will be consummated.
A subsidiary of Products Corporation is the borrower under the Yen Credit
Agreement, which had a principal balance of approximately [yen]4.3 billion as
of March 31, 1997 (approximately $34.9 U.S. dollar equivalent as of March 31,
1997) and is currently due on December 31, 1997. Products Corporation is
currently negotiating an extension of the term of the Yen Credit Agreement. In
the event that such extension is not obtained, Products Corporation is able and
intends to refinance the Yen Credit Agreement under the Credit Agreement.
Accordingly, Products Corporation's obligation under the Yen Credit Agreement
has been classified as long-term as of March 31, 1997. In accordance with the
terms of the Yen Credit Agreement, approximately [yen]539 million
(approximately $5.2 U.S. dollar equivalent) was paid in January 1996 and
approximately [yen]539 million (approximately $4.6 U.S. dollar equivalent) was
paid in January 1997.
In the event that they are not refinanced, the $61.0 aggregate principal
amount of Products Corporation's 10 7/8% Sinking Fund Debentures due 2010
previously purchased on the open market by Products Corporation (which was not
previously used for sinking fund payments) and no longer outstanding will be
used to meet future sinking fund requirements of such issue. If they are not
refinanced, $9.0 aggregate principal amount of previously purchased debentures
will be used for the sinking fund payment due July 15, 1997.
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, 1997.
10
<PAGE>
REVLON WORLDWIDE CORPORATION AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
(DOLLARS IN MILLIONS)
The Company's principal sources of funds are expected to be cash flow
generated from operations and borrowings under the Credit Agreement and other
existing working capital lines. The Company's principal uses of funds are
expected to be the payment of operating expenses, working capital and capital
expenditure requirements and debt service payments.
The Company estimates that capital expenditures for 1997 will be
approximately $60, including approximately $10 for upgrades to the Company's
management information systems. Pursuant to tax sharing agreements, Revlon
Worldwide and Revlon, Inc. may be required to make tax sharing payments to
Mafco Holdings Inc. as if Revlon Worldwide or Revlon, Inc., as the case may be,
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 cash tax
sharing payments other than in respect of state and local income taxes. Revlon
Worldwide anticipates that, with respect to Revlon, Inc. as a result of net
operating tax losses and prohibitions under the Credit Agreement and with
respect to Revlon Worldwide as a result of the absence of business operations
or a source of income of its own, no federal tax payments or payments in lieu
of taxes pursuant to the tax sharing agreements will be required for 1997.
As of March 31, 1997, Products Corporation was party to a series of
interest rate swap agreements (which expire at various dates through December
2001) totaling a notional amount of $225.0 in which Products Corporation agreed
to pay on such notional amount a variable interest rate equal to the six month
London Inter-Bank Offered Rate (6.00% per annum at April 21, 1997) to its
counterparties and the counterparties agreed to pay on such notional amounts
fixed interest rates averaging approximately 6.03% per annum. Products
Corporation entered into these agreements in 1993 and 1994 (and in the first
quarter of 1996 extended a portion equal to a notional amount of $125.0 through
December 2001) to convert the interest rate on $225.0 of fixed-rate
indebtedness to a variable rate. If Products Corporation had terminated these
agreements, which Products Corporation considers to be held for other than
trading purposes, on March 31, 1997, a loss of approximately $6.5 would have
been realized. Certain other swap agreements were terminated in 1993 for a gain
of $14.0. The amortization of the realized gain on these agreements for the
first quarter of 1997 was approximately $0.8. The remaining unamortized gain,
which is being amortized over the original lives of the agreements, is $2.3 as
of March 31, 1997. Although cash flow from the presently outstanding agreements
was slightly positive for the first quarter of 1997, future positive or
negative cash flows from these agreements will depend upon the trend of
short-term interest rates during the remaining lives of such agreements. Based
on current interest rate levels, Products Corporation expects to have a
slightly negative cash flow from these agreements in 1997, although no
assurances can be given that short-term interest rates will not rise above
current levels. In the event of nonperformance by the counterparties at any
time during the remaining lives of the agreements, Products Corporation could
lose some or all of any possible future positive cash flows from these
agreements. However, Products Corporation does not anticipate nonperformance by
such counterparties, although no assurances can be given.
Products Corporation enters into forward foreign exchange contracts from
time to time to hedge certain cash flows denominated in foreign currencies. At
March 31, 1997, Products Corporation had forward foreign exchange contracts
denominated in various currencies, predominantly the U.K. pound, of
approximately $67.5 (U.S. dollar equivalent). If Products Corporation had
terminated these contracts on March 31, 1997, no material gain or loss would
have been realized.
Based upon the Company's current level of operations and anticipated
growth in net sales and earnings as a result of its business strategy, the
Company expects that cash flows from operations and funds from currently
available subsidiary credit facilities and refinancings of existing subsidiary
indebtedness will be sufficient to enable the Company to meet its anticipated
cash requirements of its subsidiaries for the foreseeable future, including
debt service of its subsidiaries. If the Company is unable to satisfy such cash
requirements from these sources, the Company could be required to adopt one or
more alternatives, such as reducing or delaying capital expenditures,
restructuring subsidiary indebtedness, selling assets or operations, seeking
capital contributions or loans from affiliates of the Company or selling
additional shares of capital stock of Revlon, Inc. There can be no assurance
that any of such actions could be effected, that they would enable the
Company's subsidiaries to continue to satisfy their capital requirements or
that they would be permitted under the terms of the Company's various debt
instruments then in effect. The Credit Agreement requires, subject to certain
exceptions, that the proceeds of any public offering of capital stock of
Revlon, Inc. be contributed to Products Corporation. Revlon
11
<PAGE>
REVLON WORLDWIDE CORPORATION AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
(DOLLARS IN MILLIONS)
Worldwide, as a holding company, will be dependent on the earnings and cash
flow, and dividends and distributions, from Products Corporation and Revlon,
Inc. to pay its expenses and to pay any cash dividends or distributions on its
common stock that may be authorized by the Board of Directors of Revlon
Worldwide. The terms of the Credit Agreement, the Senior Subordinated Notes,
the 1999 Senior Notes and the Senior Notes generally restrict Products
Corporation from paying dividends or making distributions.
The Notes mature March 1998 and funds have been deposited in an
irrevocable trust to effect the covenant defeasance of the remaining $337.4
principal amount at maturity of the Notes not previously delivered to the
Trustee for cancellation. The covenant defeasance of the Notes is expected to
be effected on August 4, 1997, the 124th day following the deposit.
FORWARD-LOOKING STATEMENTS
This quarterly report on Form 10-Q for the quarter ended March 31, 1997
as well as other public documents of the Company contains forward-looking
statements which 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 expectation and
estimates as to future financial performance, including growth in net sales and
earnings, cash flows from operations, capital expenditures and the ability to
refinance indebtedness, secure capital contributions or loans from affiliates
and sell additional shares of capital stock of Revlon, Inc. Readers are urged
to consider statements which use the terms "believes," "no reason to believe,"
"expects," "plans," "intends," "estimates," "anticipated" or "anticipates" and
similar expressions to be uncertain and forward-looking. In addition to factors
that may be described in the Company's Commission filings, 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 development of new markets; (iv)
unanticipated costs or difficulties or delays in completing projects associated
with the Company's strategy to improve operating efficiencies, including
information system upgrades; (v) effects of and changes in economic conditions,
including inflation and monetary conditions, and in trade, monetary, fiscal and
tax policies in countries outside of the U.S. in which the Company operates,
including Brazil; (vi) actions by competitors, including business combinations,
technological breakthroughs, new product offerings and marketing and
promotional successes; (vii) difficulties or delays in realizing improved
results from business consolidations and in realizing gains from the sale of
certain facilities held for sale; (viii) combinations among significant
customers or the loss, insolvency or failure to pay its debts by a significant
customer or customers; and (ix) the inability to refinance indebtedness,
secure capital contributions or loans from affiliates or sell additional shares
of capital stock of Revlon, Inc.
12
<PAGE>
REVLON WORLDWIDE CORPORATION AND SUBSIDIARIES
PART II - OTHER INFORMATION
(a) EXHIBITS
Exhibit No.
- -----------
4.19 First Amendment and Consent, dated as of March 10, 1997, with respect
to the Yen Credit Agreement. (Incorporated by reference to Exhibit 4.8
to the Quarterly Report on Form 10-Q for the quarterly period ended
March 31, 1997 of Revlon, Inc. (the "Revlon, Inc. March 31, 1997 Form
10-Q")).
*4.20 Defeasance Trust Agreement dated April 1, 1997 between Revlon Worldwide
Corporation and State Street Bank and Trust Company, as Successor
Trustee, under the Indenture dated as of March 15, 1993, between Revlon
Worldwide Corporation and the First National Bank of Boston, as
Trustee, relating to the Senior Secured Discount Notes due 1998 and the
Series B Senior Secured Discount Notes Due 1998.
10.10 Employment Agreement, dated as of January 1, 1997, between Products
Corporation and George Fellows. (Incorporated by reference to Exhibit
10.10 to the Revlon, Inc. March 31, 1997 Form 10-Q).
(b) REPORTS ON FORM 8-K - Revlon Worldwide Corporation filed on March 17, 1997
a report on Form 8-K relating to the offering by its parent Revlon Worldwide
(Parent) Corporation of $770.0 aggregate principal amount at maturity of its
Senior Secured Discount Notes due 2001.
* Filed herewith
S I G N A T U R E S
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
REVLON WORLDWIDE CORPORATION
----------------------------
Registrant
By: /s/ Irwin Engelman By: /s/ Lawrence E. Kreider
------------------------------- -------------------------------
Irwin Engelman Lawrence E. Kreider
Executive Vice President Senior Vice President,
and Chief Financial Officer Controller and Chief
Accounting Officer
Dated: May 12, 1997
13
<PAGE>
THIS DEFEASANCE TRUST AGREEMENT, dated as of April 1, 1997 (the
"Trust Agreement"), by and between REVLON WORLDWIDE CORPORATION, a Delaware
corporation (the "Company"), as grantor, and STATE STREET BANK AND TRUST
COMPANY, a trust company organized under the laws of The Commonwealth of
Massachusetts, as trustee under the Indenture referred to below (the
"Trustee").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the Company is party to an Indenture, dated as of March 15,
1993 (the "Indenture"), by and between the Company and the Trustee, as
successor trustee to The First National Bank of Boston;
WHEREAS, capitalized terms used but not defined herein shall have the
meanings ascribed thereto in the Indenture;
WHEREAS, pursuant to the Indenture, the Company issued Securities
having an aggregate Principal Amount at Maturity of $1,115,760,000, consisting
of (i) the Company's Senior Secured Discount Notes Due 1998 (the "Initial
Notes"), of which Initial Notes having an aggregate Principal Amount at
Maturity of $6,790,000 remained Outstanding after consummation of the exchange
referred to in clause (ii) of this sentence and (ii) the Company's Series B
Senior Secured Discount Notes Due 1998 having an aggregate Principal Amount at
Maturity of $1,108,970,000 issued in exchange for Initial Notes having a like
aggregate Principal Amount at Maturity that had previously been Outstanding
under the Indenture;
WHEREAS, (a) prior to the date of this Agreement, the Company
delivered to the Trustee for cancellation Securities having an aggregate
Principal Amount at Maturity of $570,893,000, and (b) on the date of this
Agreement, the Company delivered to the Trustee for cancellation additional
Securities having an aggregate Principal Amount at Maturity of $207,547,000, as
a result of which there remains Outstanding under the Indenture Securities
having an aggregate Principal Amount at Maturity of $337,320,000 (the
"Outstanding Notes");
WHEREAS, the Company desires to exercise its covenant defeasance
option under Section 8.01(b)(ii) of the Indenture and, accordingly, wishes to
deposit with the Trustee, in trust, for the equal and ratable benefit of the
Holders of the Outstanding Notes, U.S. Government Obligations sufficient to
provide for the timely payment of the Principal Amount at Maturity of the
Outstanding Notes as contemplated by Section 8.02(1) of the Indenture;
NOW, THEREFORE, the parties hereby agree as follows:
1. Establishment of the Trust. In consideration of the premises, the
Company hereby irrevocably transfers to the Trustee and its successors in the
trust created under this Trust Agreement (the "Trust"), and its and their
assigns, all of the Company's right, title and interest in and to the U.S.
Government Obligations
<PAGE>
2
identified on Schedule I hereto (the "Government Securities Property" and,
together with all investments made therewith or proceeds thereof and, except as
provided in Section 5, earnings thereon, being hereinafter referred to as the
"Trust Estate") TO HAVE AND TO HOLD said Trust Estate IN TRUST for the equal
and ratable benefit of the Holders of the Outstanding Notes, as provided
herein.
2. Acceptance by the Trustee. The Trustee accepts the Trust on the
terms and subject to the provisions set forth in this Trust Agreement, and the
Trustee agrees to discharge and perform fully and faithfully all of the duties
and obligations imposed upon the Trustee hereunder. The Trustee hereby
acknowledges that the creation of the Trust pursuant to this Trust Agreement is
made for the purpose of satisfying the requirements of Section 8.02(1) of the
Indenture.
3. Limitation on Use of Trust Estate. No part of the corpus or income
of the Trust Estate shall be recoverable by the Company or used for any purpose
other than for the exclusive purpose of providing payments to the Paying Agent
in accordance with the provisions of this Trust Agreement until all such
payments required by this Trust Agreement have been made.
4. Collection of Principal and Interest. The Trustee shall collect the
principal of and the interest payable on the Government Securities Property
when paid in accordance with the terms thereof and shall hold the amounts so
received and shall apply such amounts as provided herein.
5. Investments. Except as provided in Section 6, the Trustee shall, to
the extent reasonably practicable, invest the amounts received pursuant to
Section 4 in U.S. Government Obligations which mature on or before March 16,
1998. Any U.S. Government Obligations purchased by the Trustee pursuant to this
Section 5 shall be added to the Trust Estate and, thereafter, shall be deemed
Government Securities Property for all purposes of this Trust Agreement;
provided, however, that any earnings thereon shall not be part of the Trust
Estate and shall be released to the Company pursuant to Section 6.
6. Payments by the Trustee.
6.1 Unless payment shall theretofore have been made to the Paying
Agent pursuant to Section 6.2 or arrangements for redemption shall theretofore
have been made pursuant to Section 6.3, on March 16, 1998 the Trustee shall
deposit with the Paying Agent, for distribution in accordance with the
Indenture, the amount of the Trust Estate after giving effect to the receipt of
all principal and interest payable on the Government Securities Property on
that date.
6.2 In the event that both (i) the Outstanding Notes shall be
accelerated on a date prior to March 16, 1998 pursuant to Section 6.02 of the
Indenture to the extent permitted by Section 8.01(b) of the Indenture, and (ii)
a court of competent jurisdiction determines prior to March 16, 1998 that the
acceleration of
<PAGE>
3
the Outstanding Notes was appropriate as a result of a bona fide Event of
Default under the Indenture and was consistent with such Section 8.01(b), the
Trustee shall liquidate the Government Securities Property as soon as
reasonably practicable after such court determination and shall deposit with
the Paying Agent, for distribution in accordance with the Indenture, the amount
of the Trust Estate after giving effect to such liquidation.
6.3 As provided in Sections 8.01 and 8.02 of the Indenture, (i) the
Company may exercise its legal defeasance option notwithstanding its prior
exercise of its covenant defeasance option, and (ii) the Company may make
arrangements satisfactory to the Trustee for the redemption of the Notes at a
future date in accordance with Article III of the Indenture even if those
arrangements are made after the execution and delivery of this Trust Agreement.
6.4 As provided in Section 8.04 of the Indenture, the Trustee shall
promptly turn over to the Company upon request any money or securities held by
the Trustee at any time which are not part of the Trust Estate.
7. Trustee. The Company and the Trustee acknowledge and agree that the
Trustee is serving under this Trust Agreement in its capacity as Trustee under
the Indenture as contemplated by Article VIII of the Indenture and, therefore,
all of the provisions of Sections 7.01, 7.02, 7.03, 7.04 and 7.07 of the
Indenture shall apply to the Trustee in serving under this Trust Agreement. In
addition, the Company and the Trustee acknowledge and agree that the Trustee
under the Indenture and under this Trust Agreement shall always be the same
Person and, therefore, if the Trustee resigns or is removed under the
Indenture, the Trustee shall automatically cease to be the Trustee under this
Trust Agreement, and any successor Trustee under the Indenture shall
automatically be the successor Trustee under this Trust Agreement.
8. Termination. The Company may not revoke the Trust or this Trust
Agreement. The Trust and this Trust Agreement shall terminate when all
distributions required to be made hereunder to the Paying Agent have been made
and any money or securities which are not part of the Trust Estate have been
returned to the Company pursuant to Section 6.4.
9. Amendments.
9.1 The Company may not amend or modify, in whole or in part, any
or all of the provisions of this Trust Agreement without the written consent of
the Holders of at least a majority in Principal Amount at Maturity of the
Outstanding Notes and, with respect to any amendment or modification that makes
the duties of the Trustee hereunder more onerous, without the written consent
of the Trustee.
<PAGE>
4
9.2 Notwithstanding the foregoing, the Company may amend or modify
this Trust Agreement without notice to or consent of any Holder for any purpose
set forth in Section 9.01(1) through (8) of the Indenture.
9.3 The parties shall execute such supplements to, or amendments
of, this Trust Agreement as shall be necessary to give effect to any such
amendment or modification.
10. Notices. All notices, requests, demands and other communications
hereunder shall be in writing and shall be deemed to have been duly given if
delivered as provided in Section 11.02 of the Indenture addressed as follows:
If to the Company:
Revlon Worldwide Corporation
35 East 62nd Street
New York, NY 10021
Attention: General Counsel
If to the Trustee:
State Street Bank and Trust Company
Two International Place
Boston, Massachusetts 02110
Attention: Corporate Trust Administration
or to such other address as any party hereto shall have last designated by
notice to the other parties.
11. Miscellaneous Provisions.
11.1 This Trust Agreement shall be binding upon and inure to the
benefit of the Company and the Trustee and their respective successors and
assigns.
11.2 The Trustee assumes no obligation or responsibility with
respect to any action required by this Trust Agreement on the part of the
Company.
11.3 Section headings in this Trust Agreement are included for
convenience of reference only and shall not control the meaning or
interpretation of any provision of this Trust Agreement.
11.4 This Trust Agreement and the Trust established hereunder shall
be governed by and construed, enforced and administered in
<PAGE>
5
accordance with the laws of the State of New York applicable to agreements made
and to be performed entirely within such State.
11.5 This Trust Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one agreement.
IN WITNESS WHEREOF, this Trust Agreement has been duly executed by the
parties hereto as of the day and year first above written.
REVLON WORLDWIDE CORPORATION
By: /s/ Glenn Dickes
----------------------------------
STATE STREET BANK AND TRUST COMPANY
By: /s/ Eric J. Donaghey
----------------------------------
<PAGE>
STATE OF NEW YORK )
: ss.:
COUNTY OF NEW YORK )
On the 28th day of March, 1997, before me personally came Glenn
Dickes, to me known, who, being by me duly sworn, did depose and say that (s)he
resides at , that (s)he is a Vice President
and Assitant Secretary of Revlon Worldwide Corporation, the corporation
described in and which executed the foregoing instrument; and that (s)he signed
his or her name thereto pursuant to authorization by the Board of Directors of
said corporation.
/s/ Joram C. Salig
-----------------------------------
Notary Public
JORAM C. SALIG
Notary Public, State of New York
No. 4975737
Qualified in New York County
Commission Expires Dec. 17, 1999
COMMONWEALTH OF MASSACHUSETTS )
: ss.:
COUNTY OF SUFFOLK )
On the 28th day of March, 1997, before me personally came Eric J.
Donaghey to me known, who, being by me duly sworn, did depose and say that
(s)he resides at , that (s)he is a Asst. Vice
President of State Street Bank and Trust Company, the trust company described
in and which executed the foregoing instrument; and that (s)he signed his or
her name thereto pursuant to authorization by the Board of Directors of said
trust company.
/s/ Scott Knox
-----------------------------------
Notary Public
SCOTT KNOX
Notary Public
My Commission Expires July 12, 2002
<PAGE>
SCHEDULE I
Government Securities Collateral:
$337,320,000 in aggregate principal amount of Treasury Notes due March 5, 1998.
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> MAR-31-1997
<CASH> 35,600
<SECURITIES> 0
<RECEIVABLES> 416,800
<ALLOWANCES> 22,300
<INVENTORY> 305,900
<CURRENT-ASSETS> 816,500
<PP&E> 577,900
<DEPRECIATION> 203,900
<TOTAL-ASSETS> 1,613,000
<CURRENT-LIABILITIES> 500,000
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> (825,700)
<TOTAL-LIABILITY-AND-EQUITY> 1,613,000
<SALES> 492,500
<TOTAL-REVENUES> 492,500
<CGS> 166,200
<TOTAL-COSTS> 166,200
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 1,800
<INTEREST-EXPENSE> 59,400
<INCOME-PRETAX> (47,100)
<INCOME-TAX> 5,500
<INCOME-CONTINUING> (52,600)
<DISCONTINUED> 0
<EXTRAORDINARY> (43,800)
<CHANGES> 0
<NET-INCOME> (96,400)
<EPS-PRIMARY> 0
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