Revlon, Inc. (REV) swung to a net loss for the quarter ended Dec. 31, 2016. The company has made a net loss of $36.50 million, or $ 0.70 a share in the quarter, against a net profit of $24.80 million, or $0.47 a share in the last year period. On the other hand, adjusted net income for the quarter stood at $22.70 million, or $0.43 a share compared with $64.90 million or $1.23 a share, a year ago.
Revenue during the quarter surged 53.42 percent to $800.70 million from $521.90 million in the previous year period. Gross margin for the quarter contracted 587 basis points over the previous year period to 56.50 percent. Total expenses were 96.83 percent of quarterly revenues, up from 89.48 percent for the same period last year. That has resulted in a contraction of 735 basis points in operating margin to 3.17 percent.
Operating income for the quarter was $25.40 million, compared with $54.90 million in the previous year period.
However, the adjusted EBITDA for the quarter stood at $149.40 million compared with $125.50 million in the prior year period. At the same time, adjusted EBITDA margin contracted 539 basis points in the quarter to 18.66 percent from 24.05 percent in the last year period.
"All of our segments posted robust International constant currency net sales growth in 2016; while we faced some specific challenges in North America, as U.S. mass retailers were impacted by beauty consumption shifting to specialty and online channels, particularly during the year-end holiday season. Our strategy to drive long-term growth continues to focus on strengthening our iconic brands, continuing to build distribution in high growth channels, accelerating innovation and enhancing our digital capabilities," commented Mr. Fabian Garcia, President & chief executive officer.
Operating cash flow declines
Revlon, Inc. has generated cash of $116.90 million from operating activities during the year, down 24.73 percent or $38.40 million, when compared with the last year. The company has spent $1,087.50 million cash to meet investing activities during the year as against cash outgo of $83.80 million in the last year. It has incurred net capital expenditure of $58.80 million on net basis during the year, up 39.67 percent or $16.70 million from year ago.
Cash flow from financing activities was $833.10 million for the year as against cash outgo of $12.10 million in the last year period.
Cash and cash equivalents stood at $186.80 million as on Dec. 31, 2016, down 42.86 percent or $140.10 million from $326.90 million on Dec. 31, 2015.
Working capital increases
Revlon, Inc. has recorded an increase in the working capital over the last year. It stood at $415.40 million as at Dec. 31, 2016, up 18.04 percent or $63.50 million from $351.90 million on Dec. 31, 2015. Current ratio was at 1.59 as on Dec. 31, 2016, down from 1.68 on Dec. 31, 2015.
Debt increases substantially
Revlon, Inc. has witnessed an increase in total debt over the last one year. It stood at $2,692 million as on Dec. 31, 2016, up 47.51 percent or $867 million from $1,825 million on Dec. 31, 2015. Total debt was 89.04 percent of total assets as on Dec. 31, 2016, compared with 90.60 percent on Dec. 31, 2015. Interest coverage ratio deteriorated to 0.71 for the quarter from 2.58 for the same period last year.
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