Shares of Revlon Inc. fell more than 2% late Monday after the cosmetics company said it would lay off workers, cut costs, and refinance its debt amid deepening losses for U.S. equities.
Revlon REV, +9.33% struck an $850 million agreement with Jefferies to refinance some of its debt and get new funding to “significantly enhance the company’s capital structure,” it said in a statement.
The company also announced a restructuring program aimed at saving between $200 million and $230 million by the end of 2022.
About 60% of the “cost reductions” will come on the back of “headcount reductions occurring in 2020,” Revlon said. Revlon had about 7,300 employees in late 2018, according to a filing.
“The Revlon 2020 restructuring program includes rightsizing the organization and operating with more efficient workflows and processes that the company implemented during the 2018 optimization program,” the company said.
Revlon said it expects to see between $105 million and $115 million in cost reductions this year, and incur about $55 million to $65 million in charges related to severance costs. Restructuring charges in a range between $65 million and $75 million are expected in 2021 and 2022, the company said.
The company said it “continues to work” with Goldman Sachs on “the strategic alternatives process, which remains focused on exploring potential options for our portfolio and regional brands.”
The company also reported preliminary fourth-quarter results, saying sales for the quarter fell to $699 million from $742 million in the year-ago quarter. It swung to a profit of $26 million, or 49 cents a share, versus a loss of $70 million, or $1.33 a share, a year ago.
Analysts polled by FactSet expected a break-even fourth-quarter on sales of $755 million.
Shares of Revlon ended the regular trading day down nearly 15% amid a bloodbath for stocks as a price war among major oil-producing countries triggered a deep plunge for U.S. equities already battered by fears related to the novel coronavirus spread.
The shares have lost 23% in the past 12 months, versus an advance of 0.1% for the S&P 500 SPX, +4.94% and compared with a retreat of 6.3% for the Dow Jones Industrial Average DJIA, +4.89% in the same period.