Revlon Inc (REV) 2013 Q1 法說會逐字稿

Good morning, ladies and gentlemen, and welcome to Revlon's first quarter 2013 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. (Operator Instructions).

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.

Thank you, Cynthia. Good morning, everyone, and thanks for joining today's call. Earlier today, we released our results for the first quarter ended March 31st, 2013. If you have not already received a copy of the earnings release, you can obtain one on our website at revloninc.com.

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

Before I turn the call over to Alan, I'd 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.

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 2012 Form 10-K and our 2013 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, both of which are non-GAAP measures. These non-GAAP measures are defined in the footnotes to our release, and are also reconciled to their most directly comparable GAAP measure in the financial tables at the end of our release.

And finally, as a reminder, our discussion this morning should not be copied or recorded.

With that, I'll turn the call over to Alan.

Thank you, Elise, and good morning, everyone. As we have discussed for some time, our strategic goal is to profitably grow our business. We accomplished this by building our strong brands, developing our organizational capability, driving our Company to act globally, pursuing growth opportunities, and improving our financial performance.

In the first quarter of 2013, we grew our net sales by 2.1%, primarily driven by Revlon color cosmetics and our Pure Ice and Sinful Colors brands. With respect to our acquisitions, Sinful Colors performed very well during the quarter, and we are on track with the integration of our more recently acquired Pure Ice brand, which also performed well this quarter.

From a regional perspective, net sales increased in the quarter in the US and Latin America/Canada regions, while we saw some softness in Asia-Pacific and EMEA.

With regard to our brands, we believe that success in the marketplace is driven by delivering innovative, high-quality, new products, supported by effective brand communication and superb in-store execution. Our continued emphasis and focus on this approach is of the utmost importance to our objective of driving profitable growth.

We have recently introduced a number of successful new products, which Chris will touch upon later in the call, and we increased marketplace support behind our brands during the quarter.

Also, in the first quarter we improved our capital structure by refinancing our senior notes and amending our term loan, meaningfully reducing interest rates on both facilities and significantly extending the maturity of our senior notes to 2021. Also of note, Moody's upgraded our corporate credit rating. We remain focused on executing our business strategies to deliver top line growth at highly competitive margins over time.

So, with that, I will hand the call to Chris, who will talk about our marketplace performance.

Thank you, Alan, and good morning, everyone. Today I will review our net sales performance by region and by brand, excluding the impact of changes in foreign currencies.

Total Company net sales in the first quarter of 2013 were $331.9 million, an increase of $7.1 million or 2.1% versus the first quarter of last year. This increase was primarily driven by higher net sales of Revlon color cosmetics and Sinful Colors, plus the inclusion of Pure ice, partially offset by lower net sales of Almay and Revlon ColorSilk hair color.

In the United States, net sales increased $7.4 million, or 4%, primarily driven by higher net sales of Revlon color cosmetics and Sinful Colors, plus the inclusion of Pure Ice, partially offset by lower net sales of Almay and Revlon ColorSilk hair color.

Net sales in the US region grew in the first quarter of 2013, excluding the results of Pure Ice.

In Asia-Pacific, net sales decreased $1.1 million, or 2%, primarily due to lower net sales or Revlon color cosmetics in China, partially offset by higher net sales of Revlon color cosmetics in Japan and the introduction of Sinful Colors in Australia.

With respect to China, consistent with the second half of 2012, the rate of growth in the economy slowed in the first quarter of 2013, and we also saw a slowdown in the rate of consumption. In line with that, and while also proactively reducing inventory with our distributors, our net sales in China were lower in the quarter. We continue to manage this business closely, working with our retail partners and focusing on the execution of our marketing plans.

Moving on to Europe, Middle East, and Africa, net sales decreased $1.9 million, or 4.1%, primarily due to lower net sales of both Revlon color cosmetics and other beauty care products in France. As we have previously discussed, in France we are in the process of completing our restructuring and exiting our manufacturing facility.

In the UK, we continue to be very pleased with the strong performance of the Revlon brand from a marketplace perspective.

In Latin America and Canada, net sales increased $2.7 million, or 6.1%, primarily due to higher net sales of Revlon color cosmetics throughout the region and higher net sales of other beauty care products in Argentina.

Venezuela was not a driver of the net sales increase year over year, as higher selling prices were largely offset by lower sales volumes. With respect to Venezuela, as you know, it represents approximately 2% of our total Company net sales. The country is going through a period of uncertainty as well as strict currency controls, where our access to US dollars has been virtually eliminated since February.

Our current focus is to manage the business such that Revlon Venezuela is only taking delivery of imported products for which it can pay in US dollars. We are continuing to monitor the local currency market developments closely.

Now, moving on to our performance by brand. Starting with Revlon color cosmetics, net sales increased as compared to the prior year. With respect to notable product performance in the marketplace, in face and eye segments we have recently introduced new products building upon our PhotoReady franchise. In face, our PhotoReady BB Cream was recognized in Oprah magazine's Spring O-wards for makeup as one of the fresh new formulas for flawless skin. Where launched, this BB cream is performing well in the marketplace.

In eye, we introduced PhotoReady Primer, Shadow + Sparkle, a palette featuring a primer, three highly pigmented shadows that can be used wet or dry, and a sparkle topcoat, that allows for limitless eye looks in one convenient package. To date, where launched, this product is performing well in the marketplace.

Moving on to the lip category, we continue to be pleased with our ongoing success across several franchises. For example, we recently extended our ColorStay franchise with Ultimate Suede Lipstick, which contains a velvety soft formula that truly achieves the ultimate combination in long wear by giving lips instant moisture as well as all-day color. The consumer obviously agrees with our assessment, as ColorStay Ultimate Suede Lipstick has been exceptionally received in the marketplace.

In addition to new product introductions in Lip, our core Super Lustrous franchise, which has been a mainstay of Revlon, continues to be a highly desirable product amongst our consumers.

Recently, Revlon's Super Lustrous Lipstick was recognized in Teen Vogue's Reader's Choice Awards as the best lipstick. We're proud of this franchise's longevity and ability to attract a new generation of consumers. We're also looking forward to the relaunch of Super Lustrous Lipgloss and new Super Lustrous Lipstick shades later this year.

Finally, in nail, the most recent new product is Revlon Nail Art, a collection of nail shades and art trends offered in a unique dual-ended package containing everything needed to achieve the latest nail designs at home. Where launched, Revlon Nail Art is performing very well in the marketplace.

Turning now to Almay. Net sales decreased year over year, primarily due to its performance in the US. Almay remains a priority focus area for improvement as we continue to be dissatisfied with the marketplace performance of the brand.

As you know from prior calls, we continue to work on a number of actions to improve Almay's performance, including modifying our brand support activity with increased advertising and promotional support, and refining our brand positioning, which includes improving our in-store presentation through graphics, packaging, and merchandising, all of which are in progress.

A critical component of our brand success is the introduction of successful, innovative new products. Next month we are launching a number of new Almay products, including an exciting initial launch by the Almay brand into the lip category with Almay Color + Care Liquid Lip Balm, which is a new type of lip balm in a liquid form that provides hydration as well as color in a range of ten on-trend shades.

Also new is our CC Cream, which provides skin care benefits as well as color correction, along with the instantly flawless coverage. Almay will be one of the first CC creams introduced into the mass market. This launch will be under our core Almay smart shade franchise.

And lastly, we are extending our highly successful eye makeup remover business by bringing new benefits which we believe further differentiate our product offering in the marketplace. The entire range will also benefit from a fresher look and feel as we introduce new packaging. We continue to monitor and refine our actions in order to profitably grow the Almay brand over the long term.

Moving on to women's hair color, net sales of Revlon ColorSilk declined as compared to the same period last year. However, ColorSilk continues to perform well despite softer demand in the US category overall. Today, we are pleased with the recent introduction of our new Revlon Luxurious ColorSilk Buttercream, an extension of our Revlon ColorSilk product line.

In Revlon Beauty Tools, net sales increased year over year. In 2012, our new products performed exceptionally well, and we are off to a similar start in 2013 with our new product performance, as we continue to bring exciting and innovative new products to the market. Consistent with our comments in the past, the Beauty Tools category remains soft. However, we continue to maintain our strong leadership position in the US and Canada.

And finally, since acquiring Sinful Colors two years ago, we have gained new distribution, not only in the US but also in a number of our key international markets, such as Canada, South Africa, Australia, and the UK. We are very pleased with the net sales growth of this brand.

Now I'll turn it over to Steven to walk you through the rest of our financial results for the quarter.

Thank you, Chris. Good morning, everyone.

Starting with gross margin performance, gross margin in the first quarter of 2013 was essentially flat year over year at 64.8% versus 65% in the first quarter of 2012.

The first quarter of 2013 was impacted by a few items. First, unabsorbed fixed costs related to the previously-announced exit of our manufacturing facility in France, which had an unfavorable impact of 0.2%, or $800,000. And second, the impact of foreign currency fluctuations, which had an unfavorable impact of 0.1%, or $4.3 million.

These unfavorable impacts on gross margin were largely offset by product mix, which had a favorable impact on gross margin of 0.2%, or $700,000.

SG&A was $167.5 million in the first quarter of 2013 as compared to $170.7 million in the same period last year. The $3.2 million decrease is primarily attributable to the following items.

In the first quarter of 2013, we benefited from an $8.3 million gain on insurance proceeds from the settlement of our inventory claim due to the 2007 fire in Venezuela. This compares to the first quarter of 2012, which benefited from $1.1 million of income from insurance proceeds for business interruption losses related to the Venezuela fire.

SG&A in the first quarter of 2013 also benefited from $2.2 million of favorable changes in foreign currency fluctuations. These benefits were partially offset by $2.9 million of higher advertising and promotional expenses and $1.6 million of higher general and administrative expenses, primarily due to higher incentive compensation and higher insurance expenses.

SG&A for the first quarter of 2013 included $1.1 million of higher incentive compensation expense, related to a modification to the structure of the Company's long-term incentive plan to better align the plan with the Company's long-term performance.

While the new structure does not change the amount of the potential annual incentive award, the transition is expected to result in higher expense in 2013 and 2014 as compared to 2012. In 2013, this incremental expense is expected to be approximately $5 million, and in 2014 the incremental expense is expected to be approximately $3 million. The Company expects no additional expense related to the transition to the new structure after 2014.

Operating income in the first quarter of 2013 was $47.3 million, compared to $44.3 million in the same period last year, and adjusted EBITDA was $64.3 million compared to $60 million in the same period last year.

As there were some meaningful currency moves in the first quarter of 2013 compared to the first quarter of 2012, let me summarize the impact of these for you.

The total unfavorable impact on operating income in the first quarter of 2013 was $2.1 million, which included net sales, which were negatively impacted by $5.9 million; gross profit, which was negatively impacted by $4.3 million; and finally, SG&A, which was positively impacted by $2.2 million.

Moving on to interest expense. Interest expense including dividends on preferred stock decreased $1.2 million to $20.4 million in the first quarter of 2013, primarily due to lower interest rates as a result of our senior notes refinancing and bank term loan amendment.

Related to the Company's first quarter 2013 refinancing activity, we recognized an aggregate loss on the early extinguishment of debt of $27.9 million. As Alan indicated earlier, these transactions improved our capital structure by meaningfully reducing interest rates and extending the maturity of our senior notes to 2021.

Moving on to taxes. The provision for income taxes was $1.2 million in the first quarter of 2013 compared to $11 million in the same period last year. The decrease in the provision for income taxes was primarily attributable to the $27.9 million loss on early extinguishment of debt. Cash paid for income taxes in the first quarter was $2.7 million, compared to payments of $3.4 million last year.

Net loss in the first quarter of 2013 was $6.9 million, or $0.13 per diluted share, compared to net income of $8.5 million or $0.16 per diluted share in the same period last year.

Moving on to cash flows, net cash used in operating activities in the first quarter of 2013 improved by $3.5 million to a use of $16.9 million.

The first quarter of 2013, as compared to 2012, benefited from lower premium payments related to certain of the Company's multi-year insurance programs, lower pension contributions, and other favorable changes in working capital. These improvements were partially offset by accelerated payments of interest expense due to our refinancing activities, higher incentive compensation payments, and restructuring payments related to our September 2012 restructuring plan.

As a general reminder, with respect to operating cash flow, the timing of cash flows from working capital can vary from quarter to quarter based on a number of factors. We continue to closely manage our key working capital accounts, including receivables, payables, and inventory.

On the liquidity front, our unutilized borrowing capacity and cash on hand as of March 31, 2013, was $242.2 million, comprised of $112.5 million in available cash and $129.7 million available under our revolving credit facilities. Our revolver was undrawn at the end of the quarter, and we had $10.3 million of standby letters of credit issued under this facility.

Now, moving on to the balance of 2013. Consistent with our historical practice, I'm going to provide certain 2013 cash flow information, none of which has changed from the prior guidance we gave on our last earnings call.

Capital expenditures are expected to be approximately $25 million. Permanent display expenditures are expected to be approximately $50 million. Pension plan contributions are expected to be approximately $20 million. And lastly, cash paid for income taxes is expected to be approximately $20 million.

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). Karru Martinson, Deutsche Bank.

When we look at the top line sales in the US, how much was Pure Ice contributing to that 4% gain?

So, you know, we don't talk about our performance specifically by brand, as you know, at the sales line. I can tell you that the US did grow the top line excluding Pure Ice.

Okay. And when we kind of look at the repositioning and the new products coming from Almay, you know, this has certainly been something that's been, you know, being worked on for a couple of quarters now. When do you -- we feel, kind of, we'll get traction there?

Well, Karru, it's Chris here. Obviously, we're not going to forecast when that is. What I can tell you is, we are extremely focused on making the right moves to drive profitable sales growth over time.

So, those areas of focus on things that we know build cosmetic brands. So, getting the right mix and level of advertising promotion. And we monitor that very closely and make adjustments in function of our launches in the marketplace.

The in-store experience and then the experience the consumer has with the product at home, which is why we're making all the changes to packaging and in-store graphics.

And then new products, as I said. You know, the new products we have coming are important. There's our re-entry into the lip segment with a new form of lip balm. There is one of the first CC creams en masse that's coming to the US marketplace. And then we're building on -- upon the successful eye makeup remover.

So, we're making all these changes in a very disciplined way, and the brand has been successful over time in the marketplace. We've had great products like smoky-i, intense i, smart shade. So, we're focused on replicating that success in the future.

And just lastly, a number of retailers -- you know, Target and others -- have talked about the difficult first quarter, you know, whether it be weather-related; you know, the payroll tax increase; delayed tax returns. I mean, how much do you feel that you were fighting somewhat of a headwind here in the first quarter, that will abate as we go forward?

Well, I'm sure they're talking about their businesses overall. Of course, you know, we're really focused on the cosmetics category, which grew at a reasonable rate in the first quarter. And we continue to compete very strongly in that category.

Connie Maneaty, BMO Capital Markets.

On the change to your incentive plan, can you talk about how the dynamics work here? So, there's incremental expense of $5 million this year and $3 million next year; but no change to the potential awards. So, exactly what's going on with the plan?

So, Connie, our prior long-term incentive plan was based on a single year's performance with a payout over three years. The new structure is based on the cumulative results of three years of performance, for which a payout is then made in a single payment at the end of the third year.

So, as we transition from the prior plan -- which, once again, was a single year's performance paid out over three years; that's the prior plan -- to the new plan, the cumulative result payable after three years, the result is higher expense, as we're still expensing the final two years of the prior plan, as well as the expense related to the new plan.

So, as we stated, the new structure doesn't provide additional potential annual incentive awards to employees. However, it just has this expense as relates to the old plan while still -- while expensing the new plan.

And there's no impact on the cash flow to the Company during this period. It's consistent with the expected cash flows that we had in 2012 related to these plans.

And then on the insurance-related matters, they've been really kind of woolly ever since the fire in Venezuela. So, is the gain that you booked in the quarter -- is that a taxable event, or does the whole thing drop to earnings?

The -- at this point in time, the expectation is that $8.3 million that we reflected in the P&L drops straight to earnings.

Okay. And should we consider that to be -- I mean, because in the past you've had payments that protected your profit and sort of made you whole, based on what you would have earned in Venezuela had there not been a fire. Is this payment the end of the insurance settlement?

So, there were two -- go ahead.

If you could answer that, that'd be helpful.

So, there were two claims effectively, you know, in plain English; not necessarily in insurance English. So, two claims. One is, we had an inventory loss. And we also had a property and business interruption loss. So, the property and business interruption is a single, if you would, claim. And the other claim is the inventory claim.

In the first quarter of 2013, the settlement that was reached with the insurance carrier was just around the inventory claim. And so, that's what the $8.3 million recognition relates to.

In the periods prior, where we had recognized business interruption losses, that was during the first approximately 15 months subsequent to the fire. So, that ended at the end of the third quarter of 2012. And so, we had experienced business interruption losses.

As we show in our 10-Q, we have $4 million which we've received which is deferred on our balance sheet until such time as there's a final settlement and resolution of the property and business interruption claim. We don't know the timing of that, and final amounts. It just is a pending insurance claim.

So, what's business like in Venezuela? Do you have a building? Are you importing? I mean, a lot of time's gone by, so --

Yes. So, we're in rented offices there, Connie. We are importing product from outside the country.

But, as I said, we are only importing product for which Revlon Venezuela can pay for in US dollars. And therefore, they rely upon the currency markets there in order to be able to import business.

Clearly, as you know, in the country there's a lot of shortage on the shelves of products. So, the issue is more about getting products in, than being able to sell them once they're there. Now, of course, you've got to remember also, in the context of total Revlon, it's only 2% of net sales.

And if could ask one final question -- in China, how much inventory do you believe is out with distributors, and is there a lot to work down, or do you think you're fairly balanced?

Yes. We -- our inventory's fairly close now to what we understand to be competitive. So, we -- as I say, we took out inventory during the first quarter. So, we're pretty close to where we think we ought to be at this stage.

Grant Jordan, Wells Fargo.

Just from a high level, you know, it seems like you guys ended the year with a lot of momentum in your business, and Q1 was a relatively easy comp, up against last year. So, just trying to really figure out how the business performed relative to your expectations, and did you see any sort of slowdown in market share?

Well, Grant, a couple of things. Yes, certainly, we ended 2012 with a lot of momentum. And as you know, while we don't provide guidance, you know, our strategic goal is to drive profitable growth over time, and to do so at highly competitive margins. And we continue on that path.

You know, and that revolves around, you know, bringing the right products to the marketplace; effectively communicating with the consumers; making sure that we're spending appropriately, and as I mentioned, in the first quarter we did increase our marketplace support behind the brands in the first quarter; and then executing very effectively with retailers.

You know, we're also looking at growth opportunities. We're looking at expanding our existing portfolio of brands into new geographies and new territories -- you know, organically growing. And growing through acquisition. We've done two very nice acquisitions over the last couple of years.

And so, while I think Q1 did have some challenges, we're very aware of what those challenges are, the drivers of those challenges, and very focused on addressing them. So, I think the momentum will continue.

And were any of those challenges related to market share?

You know, we have -- we don't report market share, as you know. We had some challenges in certain retailers around the world. We had successes in retailers around the world. So, it's very retailer-specific or market-specific. Nothing worth calling out.

So, overall, that wasn't really one of the drivers for the decline in profitability in Q1?

Not particularly.

You talked about China being a challenge. Have you seen any sort of recovery in the spending in China?

Well, as I said, our consumption was down. So, the economy there remains difficult. There, you know, is reduced footfall in the department stores.

So, we haven't experienced it ourselves. We're hopeful that [some] will come. But we're really focused on therefore executing our plans in-store. So, given the fact that we've experienced less consumers in the stores, we need to focus on making sure that when they're in the store and at our counter, we maximize our effectiveness with them, which is where we're focused.

Hey, Grant, just -- Grant, it's Alan. Just to make a follow-up on one of your points earlier about decline in profitability -- you know what, Steven mentioned earlier, specifically, you know, we had some fairly significant headwinds from currency in the quarter.

So, you look at our top line. It was impacted almost $6 million from currency, which had a greater than $2 million impact on profitability in the quarter, primarily because of our businesses in South Africa and Japan, and the strength of the US dollar relative to the two of those. And also, we had higher compensation expenses, as Steven mentioned. So, if you look at those two items as kind of unique, profitability was essentially flat year over year in the quarter.

That's helpful. Thank you.

Jeff Kobylarz, Stone Harbor Investments.

Just curious about the -- just the oil -- the lower cost of that commodity. Just curious if that could help your [cost of goods sold] for the balance of this year. Or, can you comment about how much you're locked in with your costs for this year?

Jeff, it's Steven Berns. So, as we've discussed in the past, oil is not a big driver of cost -- of our input costs. You know, obviously, with all manufacturers and distributors it relates to more about the cost of transportation. But it's not a big driver for us in our cost of inputs.

Do you have any general comment about how your costs outlook is for this year?

Yes. I mean, we -- when we look at our input costs, you know, clearly, labor's a big piece of our costs. And from a material standpoint, we don't see anything significant versus what our expectations were.

And, you know -- and as we always have said, you know, we're managing both from the standpoint of looking for efficiencies within our production capabilities, while -- so, we're not expecting costs to necessarily go up; but we plan for savings in our cost of goods line as we go through each of the periods to -- as technology enables us and production capabilities enable us to take out costs.

And then you -- just given this bank debt, or just the total debt refinance you've gone through so far this year, that's going to give you more free cash flow, and you've made acquisitions in 2011 and 2012. So, anything you can say about the use of free cash flow? Are acquisitions sort of like the top of the list, as far as the use of free cash flow?

Yes. So, just as it relates to the use of cash flow specifically, you know, we have been acquisitive over the last couple of years. We've done two, as I said, very nice acquisitions, with Sinful Colors and Pure Ice. You know, we are investing appropriately in the business where we need to today. And so, certainly, continuing to grow, both through organic opportunities and through acquisition, is a key priority for us.

Connie Maneaty, BMO Capital Markets.

Just two things. On Almay, what gives you confidence that an Almay lip offering will be successful this time? Because it's -- you know, I forget what it was called, Hydracolor or something like that? You know, Almay's just not known for lip, and there are other lip balms out there. So, what's the special sauce on Almay lip?

Okay. So, yes you're right; Almay has been in lip before and we've not been particularly successful, and now we are re-entering.

So, here's how we're re-entering. First of all, lip is an increasingly hot category, and we are seeing future trends heading in that direction. And it's becoming a category a little bit like nail, where people are prepared to try a lot more things.

Lip balm is that kind of product. Lip balm is a much more impulse product than, say, a standard lipstick that you can have. So, we think that we're entering in the place where there's more opportunity for impulse.

Second thing is, liquid lip balm is a new form. Normally, a balm is a solid in a stick; but this is a liquid form, which also provides not just color but hydration. So, that's a unique offering in the marketplace.

So, between the trend towards impulse on lip, what we think is a unique form, what we then have to do is make sure that we execute it in stores so that we gain those impulse sales. So, that's what we're basing our perspective on. Time will tell, of course. But that's why we think it's a good launch to make.

And when does that -- when does this ship?

It's shipping next month.

And advertising, I imagine, will be supportive of this, right? To get it to rise above the other (inaudible)?

Yes. Yes. We'll be advertising shortly after. Obviously, as you know, there, we start with displays in-store and then it moves to the wall when the resets take place in the middle of the year. And that's when the -- you know, more of the support kicks off then. But obviously, you know, we're looking to see what the sales offtake is off -- from the initial displays.

That's interesting. And then just -- I know you don't comment on market shares. But they are available, and I just wanted to confirm that what we look at matches what you're seeing. Which is, Revlon gaining share in lip, and face makeup, and nail -- this is just US, over the last 12 weeks; and having lost share in eye. Does that match what you see?

Well, we're very pleased with all those categories you mentioned. Eye, we do continue to focus on. As you know, because you know our business well, we have a relatively small mascara business. We're just about to launch some new mascaras there and we're very focused on driving that. Although we do have a strong eye shadow business. Because, as you know, Revlon's all about color. So, we're pleased with the state of our business in general.

And at this time there are no further questions. I will now turn the call back over to Mr. Ennis for any additional or closing remarks.

Thank you, Cynthia, and thank you for joining our conference call.

Before we end the call, I would like to take this opportunity to remind you about the Annual Revlon Run/Walk for Women. Our New York City Run/Walk is on Saturday, May 4th and will be hosted by our Brand Ambassadors Emma Stone and Olivia Wilde. Our Los Angeles Run/Walk is on Saturday, May 11th and will be hosted by our Brand Ambassador, Halle Berry.

We are very proud of our longstanding philanthropic support for women's health initiatives and the fight against women's cancers. Over the years, we have helped raise millions of dollars for research, education, and advocacy. If you would like to donate to this cause or register to participate in either of the Run/Walk events, please visit revlonrunwalk.org.

We look forward to speaking with you when we report our second quarter 2013 results. Thank you, and have a wonderful day.

Ladies and gentlemen, this will conclude today's conference call. We thank you for your participation.