Revlon Inc (REV) 2010 Q1 法說會逐字稿

Good morning, ladies and gentlemen and welcome to Revlon's first quarter 2010 earnings conference call. At the request of Revlon, today's conference call is being recorded. If you have any objections, you may disconnect at this time. I would now like to turn the call over to Ms. Elise Garofalo Revlon's Senior Vice President, Treasurer and Investor Relations. You may begin, Ms. Garofalo.

Thanks, Stephanie. Good morning everyone and thanks for joining today's call. Earlier today we released our results for the first quarter ended March 31, 2010. If you have not already received a copy of the earnings release you can obtain one on our website at www.revloninc.com.

On the call with me this morning are Alan Ennis, Revlon's President and Chief Executive Officer, Chris Elshaw, Executive Vice President and Chief Operating Officer and Steven Berns, Executive Vice President and Chief Financial Officer.

Before I turn the call over to Alan I would like to remind everyone of a few things. First, our discussion this morning might include forward-looking statements which are subject to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. Information on factors that could affect the company's results from time to time and cause them to differ materially from such forward-looking statements is set forth in the company's filings with the SEC including our 2009 Form 10-K and our 2010 first quarter 10-Q which we filed earlier this morning.

Next our remarks today will include a discussion of adjusted EBITDA and free cash flow which are non-GAAP measures that are defined in the footnotes to our release and are reconciled in the case of adjusted EBITDA to net income and in the case of free cash flow to net cash provided by operating activities. These are the most directly comparable GAAP measures in the accompanying financial tables. Regarding market share information as a reminder during your 2009 fourth quarter earnings call in February we indicated that beginning with the first quarter of 2010 we are no longer reporting AC Nielsen US market share information. AC Nielsen data represents only a portion of our channels in only the US market. We believe that consumption through all of our retail partners in our markets globally is best reflected by observing our net sales performance and trends over time rather than this partial market share information. In addition, effective for periods beginning January 1, 2010 in order to align our business with more typical geographical reporting we have made some changes to how we report net sales.

Specifically, Canada is being reported as a separate region where in prior periods it was included in the Europe region and South Africa is now included as part of the Europe, Middle East and Africa region where in prior periods it was included in the Asia Pacific region. As a result, prior year amounts have been reclassified to conform to this presentation. For your convenience, we have included the reclassified numbers for each of the quarters in 2009 at the back of our earnings release.

Also, I want to remind you that from a financial reporting perspective, promotional allowances are recorded as a deduction to arrive at net sales while advertising costs are recorded within SG&A on the income statement. Finally as a reminder our discussion this morning should not be copied or recorded. With that I would like to hand the call over to Alan.

Thank you, Elise and good morning, everyone. As we have discussed with you in the past Revlon's vision is glamour, excitement and innovation through high quality products at affordable prices and this under-pins everything we do. We realize this vision by executing the five key elements of our business strategy, building our strong brands, developing our organizational capability, driving our company to act globally, increasing our operating profit and cash flow and improving our capital structure. The execution of this strategy has led to improved profitability, positive free cash flow, opportunistic debt reduction and a continuous pipeline of innovative new product introductions.

As Steven will review later in today's call we continued to improve our capital structure in the first quarter of 2010. Combined with our competitive operating margin structure this gives us the flexibility to further execute our business strategy and to drive profitable growth. As I mentioned one of our key business strategies is to build our strong brands. We achieve this through a focus on the key drivers of profitable brand growth specifically. First, innovative high quality consumer preferred offering. Next, effective brand communication including appropriate levels of advertising and promotion. And finally, superb execution with retail partners to provide the optimal in store offering. In terms of innovation, earlier this year, Alan Meyers joined us as the Chief Science Officer and head of research and development operations globally.

In his early days with us at Revlon, Alan is providing key insights into consumer needs and is leading our group with a game changing mentality. With this R&D capability in addition to our focus on packaging innovation and product development we feel extremely well positioned in terms of innovation. We then channel this innovation into rolling product portfolio plans for each of our brands. In the coming weeks we will begin launching our second half 2010 new products in the US and around the world.

The second element is communication and advertising. We support new product launches by creating consumer relevant and consistent advertising. We are committed to providing the appropriate levels of advertising and promotional support in order for our new product launches to be successful.

The final element is the in-store offering. That is the interface with the ultimate consumer. We ensure that we have the right fixtures in store and eye catching promotional displays to support new product launches. I recently had the opportunity to visit some of our key markets around the world including South Africa, Southeast Asia, China and Japan and I continue to be impressed with the prominent placement of our brands and with the high quality of our in-store execution. We have strong retail partnerships around the world, our people are executing well and it shows.

We continue to strengthen our brands, deliver innovative new products, pursue targeted growth opportunities and invest in our people. We believe we have growth opportunities globally through expanding existing brands with existing customers and through new distribution and geographies. Of course, the economic environment remains challenging and therefore we will continue to manage our resources carefully while maintaining a balanced perspective on the long-term growth of our brands.

Lastly, before I turn the call over to Chris let me remind you about the annual Revlon run/walk for women which will be held in New York City this Saturday, May 1st and in Los Angeles on May 8. We are very proud of our long standing and continued philanthropic support for women's health initiatives and the fight against women's cancers. If you would like to donate to this cause or register to participate in the Revlon run/walk please go to Revlonrunwalk.com. Now, I will hand it over to Chris to talk about our marketplace performance.

Thank you, Alan and good morning, everyone. Today I will cover our net sales performance and comment more broadly on trends we are seeing around the world. Total company net sales in the first quarter were $305.5 million compared to $303.3 million in the first quarter of last year. Excluding favorable foreign currency fluctuations of $9 million, net sales decreased 2.2%, driven primarily by lower net sales of Almay color cosmetics and Revlon beauty tools. These declines were partially offset by higher net sales of Revlon ColorSilk hair color and Revlon color cosmetics. Now let me discuss some factors that impacted our net sales results in the first quarter.

The first quarter of last year's net sales benefited from launches of Almay PureBlends and Revlon Pedi-Expert and higher pipeline shipments of second half 2009 new Revlon color cosmetic products principally ColorStay Ultimate Liquid lipstick. We benefited from the launch of a number of key innovative new products across our brands for the first half of 2010 which I will expand upon later. As we previously stated, our strategic goal is to profitably grow our business. Therefore in looking at our promotional plans compared to 2009 we modified some promotional vehicles that while successful in driving retail sales, had a negative impact on the gross profit margin in 2009. Lastly, although our total SG&A expenses decreased year-over-year we maintained comparable levels of media pressure globally and have plans to increase our level of media pressure in the second quarter as compared to the same period last year. In summary, the main factors affecting our 2010 first quarter net sales as compared to the 2009 first quarter were the cycling of some prior year launches, timing of shipments and changes in promotional activity while maintaining comparable media pressure. Moving on to some specific products.

Starting with Revlon color cosmetics, net sales increased during the quarter as compared to the prior year. In the face segment, Revlon PhotoReady makeup is doing well around the world where it has been launched. PhotoReady makeup contains innovative photo chromatic pigments that bend and reflect light to give a flawless, airbrushed appearance. It is still early in its launch stage in some regions and is yet to be launched in a number of key markets so we expect to see continued positive performance in this franchise. In the lip segment, Revlon ColorBurst lipstick is early in its launch stage with many markets yet to launch. ColorBurst is a luxurious lipstick with revolutionary Elasticolor technology that provides an instant burst of color that feels weightless on the lips.

Moving on to the Almay brand, while we have seen positive momentum lately, performance was negatively impacted due to the cycling of the 2009 launch of Almay pure blends which affects the eye, lip and face segments. However, Almay's core business is stable. We have and will continue to introduce products behind our two most successful franchises Almay SmartShade and Almay Intense i-color. We saw continued strength in both of these franchises during the quarter. Almay SmartShade Makeup contains a technology with shade sensing micro-beads that adjust to match a woman's skin stone. We continue to expand this franchise with the recent introduction of SmartShade Anti-aging which instantly reduces the appearance of fine lines and wrinkles. As we broaden the assortment to meet additional consumer needs we are seeing good growth in this franchise. In the Almay Intense i-color franchise we recently launched a new collection of expertly coordinated shades that instantly enhances the color of your eyes with a three step system of mascara, eye shadow and eye liner. The new collection benefits from the inclusion of the light interplay technology which intensifies the user's natural eye color.

In women's hair color Revlon ColorSilk continues to grow solidly in each of the regions in which it is sold, mainly the US and Latin America and Asia Pacific. In 2010 we extended the franchise to include Revlon ColorSilk Luminista which is especially designed for naturally dark hair delivering vibrant and shimmering color.

In antiperspirant and deodorants, global net sales of Mitchum in the first quarter 2010 were relatively flat year-over-year. Innovations in the franchise include new Mitchum smart solid clinical performance which expands the brand offering in the US into the clinical strength segments of antiperspirant for both men and women. Outside the US re-stages of the Mitchum line including updated fragrances and packaging.

Finally, the strength of the beauty tools business is centered on the strong heritage of the Revlon brand coupled with our high quality product offering. Revlon beauty tools performance in the first quarter of 2010 was impacted by the cycling of the successful Pedi-Expert launch in 2009. New beauty tool launches in 2010 partially offset this including Revlon Pedi-Expert shower an all in one pedicure kit that is especially designed for in shower use and Revlon true precision tweezer which has been very popular early in its launch.

Now, let's move to the regional sales performance during the quarter. In the United States, net sales were $182.1 million, a decrease of $8.9 million or 4.7% compared to $191 million last year. As I mentioned earlier, the decline was driven by lower net sales of Almay color cosmetics and Revlon beauty tools due to the cycling of the 2009 launches, partially offset by higher net sales of Revlon color cosmetics and Revlon ColorSilk hair color. Net sales of Revlon color cosmetics increased primarily due to lower promotional allowances and the benefit of new product launches in the first quarter of 2010. In Asia Pacific, net sales were $45.9 million, an increase of $4.3 million or 10.3% compared to $41.6 million in the prior year. Excluding the favorable impact of foreign currency fluctuations net sales decreased $1.2 million or 2.9%. This decline was due to lower net sales of Revlon color cosmetics in both Australia and Japan where we have seen a softening of consumption trends in the color cosmetics category. Throughout the region we are experiencing positive market performance with the first half 2010 new product introductions, however, their performance was not sufficient to overcome the difficult economic backdrop and declining retail sales trends in both Australia and Japan. These declines were partially offset by higher net sales of Revlon color cosmetics in China.

In Europe, Middle East and Africa, net sales were $42.9 million, an increase of $4.6 million or 12% compared to $38.3 million in the same period last year. Excluding the favorable impacts of foreign currency fluctuations net sales decreased $1.8 million or 4.7%. This decline was primarily due to lower net sales of Revlon color cosmetics in the region and Revlon skin care in certain distributor markets.

In Latin America, net sales were $20 million, an increase of $0.5 million or 2.6% compared to $19.5 million in the same period last year. Excluding the unfavorable impacts of foreign currency fluctuations net sales increased $5.8 million or 29.7%. Approximately half of this increase was due to higher selling prices in Venezuela as a result of market conditions and inflation in the region. From a brand standpoint the increase was due to higher net sales of Revlon ColorSilk hair color, Revlon color cosmetics and other beauty care products.

In Canada, net sales were $14.6 million or an increase of $1.7 million or 13.2% compared to $12.9 million in the first quarter of 2009. Excluding favorable foreign currency fluctuations net sales decreased $700,000 or 5.4%. This decline was primarily due to lower net sales of Revlon beauty tools. Now, I will turn it over to Steven to walk you through the rest of the financial results for the quarter.

Thank you, Chris. Good morning, everyone. As we have already discussed our net sales performance I will start with gross margin performance in the quarter. In the first quarter of 2010, our gross profit margin improved to 64.4% versus 63.4% in the first quarter of 2009. Gross margin in 2010 was positively impacted by five factors. Lower promotional allowances on color cosmetics, restructuring savings, procurement efficiencies, lower inventory obsolescence charges and favorable foreign currency fluctuations. These positive impacts were partially offset by unfavorable changes in sales mix during the quarter. SG&A declined $8.8 million or 5.5% to $151.4 million primarily due to lower advertising expenses as a result of lower advertising rates and the continued realization of savings from our May 2009 restructuring program.

As we have previously disclosed, annualized cost reductions from our 2009 restructuring program are expected to be $30 million. $15 million of which was realized in 2009. In the first quarter of 2010, we realized an additional $6.2 million of savings and we expect a similar amount of incremental savings in the 2010 second quarter with the $2 million to $3 million balance of the annualized $30 million of savings materializing in the second half of 2010. All expenses associated with this restructuring were recorded in the 2009 P&L. With respect to SG&A expenses, namely advertising and promotional expenses, the level of expense from period to period can and will vary due to the market place environment and timing of product launches. Consistent with our strategy to build our strong brands we intend to support our brands with increased advertising spending in the second quarter of 2010 as compared to the second quarter of 2009. Operating income in the first quarter of 2010 was $45.4 million compared to $31.6 million in the same period last year. Adjusted EBITDA in the first quarter of 2010 was $61.1 million, compared to $49.1 million in the same period last year. And net income in the first quarter of 2010 was $2.2 million or $0.04 per diluted share compared to net income of $12.7 million or $0.25 per diluted share in the same period last year.

Net income in the 2010 first quarter included the following three items. First, $9.7 million of expenses associated with the March 2010 re-financing of our credit facilities compared to a gain of $7 million on the early extinguishment of debt in the first quarter of 2009, representing a $16.7 million swing in net income year-over-year. Second, net income included a one-time foreign currency loss of $2.8 million, related to the required re-measurement of Revlon Venezuela's balance sheet as a result of Venezuela's currency devaluation in January of 2010. Finally, Net income included a provision for taxes of $5 million of expense in the first quarter of 2010 as compared to a $2 million benefit from the first quarter of 2009. This $7 million swing year-over-year was due to the favorable resolution of tax matters in the first quarter of 2009 and higher taxable income in certain foreign jurisdictions during the first quarter of 2010.

Net cash provided by operating activities in the first quarter of 2010 was $31.2 million compared to $17.3 million in the same period a year ago. Free cash flow in the first quarter of 2010 was $28 million, compared to $17.5 million in the first quarter of last year. This improvement was driven by higher operating income, lower incentive compensation payments and lower interest payments partially offset by restructuring payments made during the first quarter of 2010.

On the liquidity front our unutilized borrowing capacity and cash on hand as of March 31, 2010 was $120.6 million comprised of $87.2 million available under our revolving credit facility and $33.4 million of available cash. In March 2010 we re-financed our existing $815 million term loan facility with a five year $800 million term loan facility maturing in March 2015. And we also re-financed our existing $160 million revolving credit facility and replaced it with a four year, $140 million asset-based facility due in March 2014. The new term loan facility bears interest at LIBOR plus 400 basis points which is the same interest rate spread as our prior credit agreement. However, under the new term loan agreement we are subject to a LIBOR floor of 2%. The new revolver bears interest at LIBOR plus 3% versus the prior agreement of LIBOR plus 2%. There is no LIBOR floor on the revolver.

With respect to costs associated with this March 2010 re-financing the net effect was an expense of $9.7 million during the first quarter of 2010. We now have $30.6 million of unamortized deferred financing costs which relate to all of our debt facilities including our preferred stock. Amortization of these costs will result in approximately $1.4 million of debt amortization quarterly for the balance of 2010. This recent re-financing supports our business strategy of improving our capital structure. And it is worth noting that since the beginning of 2008 we have improved operating performance and profitability which has enabled us to reduce debt by over $200 million and to improve our total leverage ratio. Our nearest maturing security is the preferred stock which is mandatorily redeemable in October of 2013.

Let me up date you on several factors that impact 2010 financial performance. Starting with Venezuela, effective January 1, 2010 Venezuela was designated as a highly inflationary economy under US GAAP. In addition, on January 8, 2010 the Venezuelan Government announced a devaluation of its local currency relative to the US dollar. We use Venezuela's official exchange rate to translate the financial statements of Revlon Venezuela. In the first quarter of 2010 the devaluation had the impact of reducing reported net sales and operating income by $5.4 million and $1.9 million respectively. Additionally, to reflect the impact of the currency devaluation a one-time foreign currency loss of $2.8 million was recorded in the P&L in January of 2010 as a result of the required re-measurement of Revlon Venezuela's balance sheet.

Next, consistent with our historical practice, while we are not providing specific guidance for adjusted EBITDA for 2010, I would like to update you on certain 2010 cash flow items which we provided on our last earnings call in February of 2010. So for the full year 2010, capital expenditures are expected to be approximately $20 million. Permanent display expenditures are expected to be approximately $40 million. Cash interest expense information is available by reference to our public filings which detail the composition of the company's capital structure and our applicable interest rates. As compared to 2009, interest expense throughout the remainder of 2010 will be impacted by higher weighted average borrowing rates due to the LIBOR floor on our new term loan facility. Taxes paid are expected to be approximately $15 million in 2010. And all other cash flows including changes in working capital and pension expense and contributions are anticipated to result in cash usage of approximately $15 million. This is a $10 million improvement versus our prior estimate primarily due to improved inventory management. It is important to note that our working capital flows can and will vary as a result of a number of factors on a quarterly basis.

This concludes our prepared remarks and we would now like to open up the call for your questions. Operator, please prompt the participants for questions.

(Operator Instructions) Your first question comes from the line of Reza Vahabzadeh with Barclays Capital.

Good morning.

Good morning.

You haven't provided the share data as usual but I was just trying to see if you have any color as to how your share trends worked out during the first quarter?

Well, as we said the reason we are not providing share data is it really only refers to a part of one of our markets so what I would take you back to the factors that we identified as affecting our sales in the first quarter. First, of course, we launched some new innovative products for our brands across the first half of 2010 and I mentioned a few of them as we talked. We also cycled last year's launches of Almay PureBlends and Revlon Pedi-Expert. In addition, last year, 2009 net sales in the US benefited from higher pipeline shipments of second half new products, particularly ColorStay Ultimate liquid lipstick. From a media perspective we maintained comparable levels of media pressure and then we also stated we made changes to promotional plans. We modified some promotional vehicles that while successful in driving retail sales last year had a negative impact on our gross profit margin. Those are really the factors that affected our performance.

Got it. And then any thoughts on the Euro and how that could affect operating as a result and if there are any hedges in place for any costs versus revenue divergences in terms of the currency that they are derived from?

Let me talk about what we do in the marketplace first and then Steven will talk about our hedging strategy. In the market place we deliver products to the market and we price them based on market conditions irrespective of the currency that we operate in. We don't manage our business based on currencies and that is an important factor. But we do have a hedging program that has been in place for some time but it is essentially a cash flow hedging program which minimizes the peaks and valleys of the impact of currency fluctuations. I certainly have no ability to predict the future of what exchange rates will do.

And the only thing I would add to that is, as Alan indicated, we are really looking at our cash flows, our net cash flows and so where we are purchasing product across the border -- whether it be from suppliers or from the Oxford North Carolina facility -- we will provide a continual level of certainty so we are not subject to the step, function and nature of the currency markets.

So does that mean you will face more of a translation risk or a conversion risk?

It means that we are subject to both over time, both translation and transaction. We have a process of making sure that we settle our inter-company transactions timely and therefore we are not subject to having inter-company payables or payables to outside parties that are -- if you would -- subject to just the vagaries of the foreign currency market. As you will see on page F 14 of our 10-K, it lists out all of the foreign exchange contract information and how we go about that. Each quarter we update what are outstanding FX contracts are and any mark to market that may exist. However, the contracts that are put in place are done so for specific purchases that are really net flows across border.

Got it. And then for the year, I understand that there is some more cost savings to be had in the SG&A line as well as the gross profit line. What is the overall plan for advertising spending for the year? Is it going to be comparable to the prior year? Higher than the prior year? Taking all of the quarters together?

We are not commenting on the full year number. What we have said is that the first quarter was comparable to last year and in the second quarter it is our intent to increase our media pressure.

Okay. Thank you.

Thanks.

Your next question comes from the line of Carla Casella with JPMorgan.

One clarification question first. You mentioned in your cash flow discussion, I think you said working capital pension and other items would be cash usage of $15 million. Is that correct?

Correct.

Do you say how much of that is the pension?

We gave guidance in our first quarter call and talked about $25 million of pension cash contributions and that is consistent for -- and $15 million of pension expense and that is consistent for -- with this call and the guidance we just gave.

So working capital will be offset, it should be a source of cash for the year, right, for the year?

Correct.

Okay. And then in the cost savings, the $30 million savings you said you expect second quarter to be about almost $9 million. How come the second quarter is so much greater than the first?

What I said was that there was $6.2 million in the first quarter as it related to the restructuring and a comparable amount approximately $6 million in the second quarter with the balance of $2 million to $3 million in the second half of 2010.

Okay. I missed that. Okay. And then one question on you talked about the new launches of the face makeup. Any -- can you mention any of the big regions that still have yet to launch and maybe the timing of them?

Well, it varied, it is not by region. We look at it by country and it depends on our portfolio plans in each of those countries. It varies by region. We already launched in some of our major markets around the world. We launched already for example in the US, we launched in Australia where we have a good market position. We have launched in South Africa, we have launched in the UK. Quite a number of key markets but there are more to come.

Okay, great. On the Venezuela front, I think Venezuela last year was 7% of the operating profit. Is it safe to assume that could be cut maybe in half this year or is it was more or less than that?

Couple of things. We will not give a forecast for what percent of profit would be but your analysis is correct because the currency was essentially cut in half. All things being equal you would expect the results of that business would be half of what they were in 2009.

Great. Thank you very much.

Your next question comes from the line of Connie Maneaty with BMO Capital Market.

Good morning.

Good morning, Connie.

Back to the advertising question. I know you don't give guidance but I think it was in last year's third quarter conference call where you had been able to lock in such favorable media rates on the media calendar which was to have run from October 2009 through October of 2010. And in your comments this morning you talked about the second quarter saying you were going to put more pressure behind advertising. So, I'm just trying to figure out that media rates have come down so much that you called them out last year. But in the second quarter will you be increasing on an absolute or percentage of sales weight your advertising?

Let's just go back to what we said. You're right, the media rates that we negotiated are in place from October last year to September of this year. So those are fixed through all the quarters. In the second quarter of this year we intend to increase the levels of GRPs. Obviously, there are many factors that affect the absolute dollars that implies because it depends in which market around the world we buy in, say, which form of media, which day part. The point is at end of all that there will be more GRPs in front of the consumer in the second quarter.

Okay. And given what is going on with advertising rates, is it a conservative assumption to assume that for 2011 your media expense might be higher than in 2010?

It is difficult to say at this stage. The up front process really starts next month and concludes in August/September. And again, it depends on the competition between the various media owners. One thing we did recently do is we appointed a new media agency in the US, MediaCom, which is a major player in the media market so we are looking forward to getting the benefit of working with them.

Okay. I have a question on sales. And the question is this -- when do we start to see organic sales growth on a more consistent basis such that when you cycle through the introduction of a new product we -- you are not reporting year-over-year declines in organic sales growth?

Well, you know, in this category, I mean, speaking particularly in the cosmetics category, we are focused on the three things which are driving sales growth over time. And we are not going forecast when the sales growth occurs each quarter but the three areas we are really focused on are, first of all, innovation. We know that in the color cosmetics category, 15% to 20% of annual sales are in new products. So, our strong focus there with our R&D group, our packaging development group and our product development group is crucial to delivering that over time. Having done that, the next area is advertising. We have talked in the past about how we have increased the effectiveness of our advertising which we are testing with the consumers and we know that our advertising resonates more today than it did a couple of years ago. Add that to things like we will be increasing our media pressure in the second quarter. And then finally the in-store execution and competitive environment there hasn't changed. It remains an intensely competitive environment and everyone is competing very strongly. So we are focused on those drivers which over time we believe will deliver the sales growth.

Okay. And just finally, as Mr. Meyers has had a chance to assess Revlon's R&D capability I think you mentioned some game changing kind of prospects. Is he on the call? Could he comment on what his impressions are or could you summarize what he believes Revlon's strengths and weaknesses or opportunities to be?

Sure. He is not on the call but I can comment, Connie. First of all, Alan, as you know, joined us from L'Oreal. His initial observations are that our portfolio plans and the product innovations that we have in place are very strong. What he is bringing to the table as I see it is he is challenging some of the things that we haven't challenged in the past. He is looking for opportunities to further enhance the innovation pipeline. He is looking at bringing new formulas, new technology, and so he has only been here for four months but already I see strong signs of him elevating our game to the next level.

Great. Thanks.

And Connie, just with regard to the question on advertising in the second quarter. On page 33 of the 10-Q we filed this morning and consistent with the comments I made earlier in my prepared remarks we say that consistent with our strategy we currently intend to support our brands with increased advertising spending in the second quarter of 2010 as compared to the second quarter of 2009.

Okay. I will look at that. Thanks.

At this time there are no further questions. I would like to turn the conference back over to Alan Ennis for closing remarks.

Thank you. I would like to take this opportunity first and foremost to thank our employees around the world for their execution during the first quarter of 2010 and I would like to thank you all for your continued interest and support in Revlon. Thank you.

Thank you. This concludes today's conference call. You may now disconnect.