Thursday, Revlon, Inc. (REV) reported a lower profit for the third quarter ended September 30, reflecting the absence of a year-ago gain from discontinued operations. However, the company posted a profit from continuing operations, helped by cost cuts, despite lower sales.
The beauty care company's net income for the quarter was $23.1 million or $0.45 per share, compared with $29.2 million or $0.57 per share in the comparable period year-ago. However, income from continuing operations was $23.1 million or $0.45 per share, compared with a loss from continuing operations of $15.2 million or $0.30 per share in the year-ago period.
Net sales in the third quarter declined by 2.5% to $326.2 million from $334.4 million in the year-ago period. Region-wise, net sales in the United States declined by 3.0% to $183.7 million and overseas sales slid 1.7% to $142.5 million. The decline in both U.S. and international operations was primarily due to lower net sales of Revlon color cosmetics and Revlon Beauty Tools, partially offset by higher net sales of Revlon ColorSilk hair color.
Selling, general and administrative expenses declined to $155.4 million from $187.5 million, while restructuring costs and other costs increased to $2.6 million from $0.3 million. The company's interest expense declined to $23 million from $29.1 million year-ago. Amortization of debt issuance costs slipped to $1.4 million from $1.5 million a year ago, while foreign currency losses were $0.2 million, compared with $1.6 million year-ago.
According to Revlon, Free cash flow in the third quarter was $54.1 million, compared with free cash flow of $16.9 million in the same period last year, primarily driven by improved income from continuing operations and continued improvement in working capital efficiency.
According to Alan T. Ennis, Revlon president and chief executive officer, "The rate of growth in the U.S. mass market color cosmetics category, according to AC Nielsen, slowed sequentially in the third quarter of 2009. However, we remain focused on the key drivers of our business, including delivering innovative, high-quality, consumer preferred products."
Net income for the nine month period declined to $36 million or $0.70 per share, compared with $46.6 million or $0.91 per share year-ago. Income from continuing operations increased to $35.7 million or $0.69 per share, compared with $1.9 million or $0.04 per share for the year-ago period. Year-to-date net sales declined to $951.3 million from $1.01 billion year-ago.
REV is currently trading on the New York Stock Exchange at $8.24, up $2.49 or 43.30%.
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