REVLON, INC. ‘A’ NYSE-REV
TIMELINESS
SAFETY
TECHNICAL
3
4
4
High:
Low:
Lowered 11/1/13
39.2
20.5
Lowered 12/19/14
2017-19 PROJECTIONS
F
0
0
0
M
0
0
0
A
0
0
0
M
0
0
0
J
0
0
0
J
0
0
0
A
1
0
0
42.9
22.0
39.5
7.6
15.1
10.0
14.9
5.6
19.9
2.3
18.8
9.2
19.3
9.5
18.0
12.6
29.3
14.8
Nil
35.3
22.1
Target Price Range
2017 2018 2019
64
48
40
32
24
20
16
12
S
0
0
0
8
6
% TOT. RETURN 11/14
Institutional Decisions
to Buy
to Sell
Hld’s(000)
1Q2014
32
35
8743
2Q2014
32
36
8596
3Q2014
26
39
8702
VALUE
LINE
1-for-10
Reverse
Ann’l Total
Price
Gain
Return
High
45 (+30%)
8%
Low
30
(-15%) -3%
Insider Decisions
J
0
0
0
39.3
19.6
63.5 RELATIVE
DIV’D
Median: NMF) P/E RATIO 1.14 YLD
34.29 P/ERATIO 21.0(Trailing:
LEGENDS
8.0 x ″Cash Flow″ p sh
. . . . Relative Price Strength
1-for-10 Rev split 9/08
Options: Yes
Shaded area indicates recession
Lowered 12/20/13
BETA 1.20 (1.00 = Market)
to Buy
Options
to Sell
RECENT
PRICE
Percent
shares
traded
12
8
4
1 yr.
3 yr.
5 yr.
THIS
STOCK
VL ARITH.*
INDEX
24.8
113.6
82.1
8.0
72.4
119.8
Revlon Inc., a holding company formed in 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 © VALUE LINE PUB. LLC 17-19
1992, conducts its business through its 35.05 35.85 31.64 26.78 25.40 24.56 25.46 26.47 27.24 28.55 37.15 37.05 Sales per sh
42.85
direct subsidiary, Revlon Consumer Prod- d.98
.52 d4.73
1.61
1.98
2.06
2.38
1.50
1.52
1.93
2.75
3.40 ‘‘Cash Flow’’ per sh
4.10
ucts Corporation and its subsidiaries. In a d4.70 d2.30 d5.82 d.30
.26
.94
1.27
1.01
.97
.47
1.25
1.85 Earnings per sh A
2.50
March 1996 initial public offering, managed
----------Nil
Nil Div’ds Decl’d per sh
Nil
by Merrill Lynch, the company sold
.51
.69
.53
.38
.39
.29
.29
.27
.40
.55
.55
.55 Cap’l Spending per sh
.60
8,625,000 Class A shares at $24.00 each. d27.56 d29.49 d29.22 d20.69 d20.99 d19.59 d13.42 d13.28 d12.40 d11.39 d10.50 d10.00 Book Value per sh B
d6.65
An additional 11,250,000 Class A shares, 37.01 37.17 42.08 52.29 53.02 52.76 51.90 52.18 52.36 52.36 52.50 52.50 Common Shs Outst’g C 52.50
and all of the Class B common shares are
----38.8
7.2
10.5
14.3
15.0
15.5
48.1 Bold figures are Avg Ann’l P/E Ratio
Value Line
owned by REV Holdings, Inc., an indirect
----2.34
.48
.67
.90
.99
2.71
Relative P/E Ratio
.95
estimates
wholly owned subsidiary of Mafco Holdings.
----------Avg Ann’l Div’d Yield
Nil
1297.2 1332.3 1331.4 1400.1 1346.8 1295.9 1321.4 1381.4
15.0% 12.6%
1.1% 16.1% 17.7% 19.0% 19.4% 16.6%
106.1 102.9
37.0 100.1
91.9
60.1
57.0
25.6
d142.5 d83.7 d236.0 d16.1
13.1
48.5
66.4
52.8
---- - 55.1% 14.6% 16.8% 41.1%
NMF
NMF
NMF
NMF
1.0%
3.7%
5.0%
3.8%
120.3 121.5 110.8 122.5 105.1
94.3 157.6 183.3
1594.9 1669.1 1501.8 1432.4 1310.2 1186.2 1207.4 1213.8
d1020 d1096 d1230 d1082 d1113 d1034 d696.4 d692.9
NMF
NMF
NMF 14.9% 37.0% 62.3% 22.4% 18.9%
-------------------------
1426.1 1494.7
16.7% 19.6%
29.0
76.7
50.7
24.6
46.3% 65.2%
3.6%
1.6%
88.1 246.4
1145.8 1862.3
d649.3 d596.5
18.8%
4.9%
-------
BUSINESS: Revlon, Inc. manufactures a variety of beauty products, including brands such as Revlon, Almay, SinfulColors, Pure
Ice, Mitchum, Charlie and Jean Nate. The company also markets
products under regional brands overseas. Revlon’s products, which
are sold in about 175 different countries and territories, include cosmetics, fragrances, and skin-care and personal-care products. For-
eign operations accounted for 44% of ’13 sales. Has about 6,900
employees. MacAndrews & Forbes Holdings controls approximately
77.7% of the voting stock (4/14 Proxy). Chairman: Ronald O. Perelman. President and CEO: Lorenzo Delpani. Incorporated: Delaware. Address: 625 Madison Avenue, New York, NY 10022. Telephone: 212-527-4000. Internet: www.revlon.com.
We have pared our 2014 share-net estimate for Revlon, but prospects for
the coming year are brighter. To wit,
the company posted third-quarter earnings
of $0.27 a share, a 29% year-over-year improvement, yet well below our estimate
and the Wall Street consensus. Truth be
Full told, the top line was up about 42%, relaYear tive to the year-ago figure, thanks to the
1381.4 October, 2013 acquisition of The Colomer
1426.1 Group, a beauty care company that mar1494.7 kets and sells nail and hair care products
1950
primarily in salons and other professional
1945
channels. We expect that the transaction
Full will boost Revlon’s sales by roughly $500
Year million on an annualized basis. However,
1.01 during the most recent interim, the com.97 pany’s bottom line was tempered by higher
.47 advertising expense to support its Con1.25 sumer brands, as well as higher incentive
1.85
compensation expenses, due to a lower acFull crual in the third quarter of 2013 based on
Year the company’s anticipated achievement for
full-year 2013 at that time. As a result, we
now look for Revlon to post 2014 earnings
of $1.25 a share, down $0.20 from our earlier call. However, 2015 share net ought to
come in around $1.85, as Colomer has now
been in the fold for a full year, and margin
pressure should begin to ease.
Revlon is in decent financial shape.
The company finished the September interim with $178.4 million in cash, up $39.1
million since this time last year. Going forward, we would not be surprised to see
REV use an expected uptick in cash flow
to pay down its debt position, which would
certainly help boost the bottom line. Indeed, Revlon used the proceeds from a
$700 million increase in its bank term loan
facility in order to finance the Colomer acquisition, which has lifted long-term debt
to levels not seen since 2003.
Investors would do well to wait on the
sidelines for the time being. This stock
is pegged to mirror the year-ahead market. What’s more, the issue is currently
trading within our 3- to 5-year Target
Price Range, thereby discounting much of
the good news we envision over that period. Note that this equity is best suited for
risk-tolerant accounts, given its BelowAverage Safety rank, and uninspiring
marks for Price Stability, Price Growth
Persistence, and Earnings Predictability.
Kenneth A. Nugent
December 19, 2014
CAPITAL STRUCTURE as of 9/30/14
Total Debt $1873.2 mill. Due in 5 Yrs $768.7 mil.
LT Debt $1858.3 mill. LT Interest $55.0 mill.
(LT interest earned: 2.1x; total interest coverage:2.1x)
Leases, Uncapitalized Annual rentals $28.7 mill.
Pension Assets-12/13 $557.6 mill.
Oblig. $668.2 mill.
Pfd Stock 9,336,905 shs of Series A
Common Stock 52,356,798 shs.
MARKET CAP: $1.8 billion (Mid Cap)
CURRENT POSITION 2012
2013
($MILL.)
Cash Assets
116.3
244.4
Receivables
216.0
253.5
Inventory (FIFO)
114.7
175.0
Other
94.2
126.2
Current Assets
541.2
799.1
Accts Payable
101.9
165.7
Debt Due
74.9
73.3
Other
276.3
313.7
Current Liab.
453.1
552.7
ANNUAL RATES Past
of change (per sh)
10 Yrs.
Sales
-19.0%
‘‘Cash Flow’’
-Earnings
-Dividends
-Book Value
--
178.4
256.0
187.2
123.3
744.9
167.7
14.9
261.4
444.0
Past Est’d ’11-’13
5 Yrs.
to ’17-’19
-.5% 27.0%
-2.0%
-2.0%
-Nil
-NMF
QUARTERLY SALES ($ mill.)
Mar.31 Jun.30 Sep.30 Dec.31
2011 333.2 351.2 337.2 359.8
2012 330.7 357.1 347.0 391.3
2013 325.9 344.7 333.1 491.0
2014 469.8 497.9 472.3 510
2015 455
490
475
525
EARNINGS PER SHARE A
Calendar Mar.31 Jun.30 Sep.30 Dec.31
2011
.20
.11 - .70
2012
.17
.20
d.29
.89
2013
d.08
.52
.21
d.18
2014
.17
.27
.27
.54
2015
.29
.50
.45
.61
QUARTERLY DIVIDENDS PAID
Calendar Mar.31 Jun.30 Sep.30 Dec.31
2010
2011
NO CASH DIVIDENDS
2012
BEING PAID
2013
2014
Calendar
9/30/14
1950
17.5%
79.0
65.0
41.0%
3.3%
250
1750
d550
7.0%
NMF
NMF
NMF
(A) Diluted earnings. Excludes discontinued (B) Includes intangibles. In ’13: $829.4 mill.,
operations: ’08, $0.87. Excludes nonrecurring $15.84/share. (C) In millions, adjusted for split.
loss: ’10, $5.03. Next earnings report due late
Jan.
© 2014 Value Line Publishing LLC. All rights reserved. Factual material is obtained from sources believed to be reliable and is provided without warranties of any kind.
THE PUBLISHER IS NOT RESPONSIBLE FOR ANY ERRORS OR OMISSIONS HEREIN. This publication is strictly for subscriber’s own, non-commercial, internal use. No part
of it may be reproduced, resold, stored or transmitted in any printed, electronic or other form, or used for generating or marketing any printed or electronic publication, service or product.
1945
18.0%
81.0
97.0
41.0%
5.0%
265
1350
d525
12.0%
NMF
NMF
NMF
Sales ($mill)
Operating Margin
Depreciation ($mill)
Net Profit ($mill)
Income Tax Rate
Net Profit Margin
Working Cap’l ($mill)
Long-Term Debt ($mill)
Shr. Equity ($mill)
Return on Total Cap’l
Return on Shr. Equity
Retained to Com Eq
All Div’ds to Net Prof
Company’s Financial Strength
Stock’s Price Stability
Price Growth Persistence
Earnings Predictability
2250
87.5%
86.0
130
41.0%
5.8%
310
1050
d350
18.5%
NMF
NMF
NMF
B
20
45
30
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