FORM 8-K |
Avon Products, Inc. | ||||
(Exact name of registrant as specified in charter) | ||||
New York | 1-4881 | 13-0544597 | ||
(State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
Common stock, par value $0.25 per share | AVP | NYSE |
x | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
o | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
AVON PRODUCTS, INC. | |||||||||||||||
(Registrant) | |||||||||||||||
By | /s/ Laura Barbrook | ||||||||||||||
Name: Laura Barbrook | |||||||||||||||
Title: Vice President and Corporate Controller - Principal Accounting Officer |
Exhibit | ||
No. | Description | |
99.1 | ||
Avon Reports Second-Quarter 2019 Results |
THREE MONTHS ENDED JUNE 30, 2019 | |||||||||
Change vs 2Q18 | |||||||||
Reported (GAAP) | Adjusted1 (Non-GAAP) | Reported (GAAP) | Adjusted1 (Non-GAAP) | ||||||
Total US$ Reportable Segment Revenue | $1,170.3 | $1,170.3 | (12)% | (12)% | |||||
Total C$1 Reportable Segment Revenue Change | (5)% | (5)% | |||||||
Gross Margin | 57.7% | 58.4% | (240) bps | (170) bps | |||||
US$ Operating Profit | $30.5 | $89.3 | (42)% | 16% | |||||
Operating Margin | 2.6% | 7.6% | (130) bps | 190 bps | |||||
Diluted EPS from continuing operations | $(0.03) | $0.06 | $0.06 | $0.09 | |||||
Free Cash Flow1 | $26.3 | $26.3 | $59.6 | $59.6 |
• | Total Reportable Segment Revenue decreased 12% in reported currency and 5% in constant dollars. Price/mix increased 9%. |
• | Average Representative Sales in constant dollars from Reportable Segments increased 5%, driven by increases in all segments. |
• | Active Representatives from Reportable Segments declined 10%, with decreases reported in all segments, and declined 3% compared to first-quarter 2019. |
• | Gross Margin of 57.7%. Adjusted Gross Margin decreased 170 basis points to 58.4%, unfavorably impacted primarily by foreign exchange. |
• | Operating Margin of 2.6%. Adjusted Operating Margin increased 190 basis points to 7.6%, driven by price/mix and savings across multiple cost lines. |
• | Diluted Loss Per Share from continuing operations of $0.03. Adjusted Diluted Earnings Per Share of $0.06, compared with Adjusted Diluted Loss Per Share of $0.03 for second-quarter 2018. |
SEGMENT RESULTS | |||||||||||||||||
($ in millions) | |||||||||||||||||
Revenue | Active Representatives | Average Rep Sales C$ | Units Sold | Price/ Mix C$ | Active Representatives | ||||||||||||
US$ | C$ | ||||||||||||||||
Revenue & Drivers | Reported (GAAP) | % var. vs 2Q18 | % var. vs 2Q18 | % var. vs 2Q18 | % var. vs 2Q18 | % var. vs 2Q18 | % var. vs 2Q18 | % var. vs 1Q19 | |||||||||
Europe, Middle East & Africa | $ | 425.1 | (15)% | (8)% | (9)% | 1% | (14)% | 6% | (7)% | ||||||||
South Latin America | 443.0 | (14) | — | (12) | 12 | (17) | 17 | (2) | |||||||||
North Latin America | 193.8 | (7) | (6) | (10) | 4 | (8) | 2 | 1 | |||||||||
Asia Pacific | 108.4 | (4) | (3) | (9) | 6 | (9) | 6 | 1 | |||||||||
Total from reportable segments | 1,170.3 | (12) | (5) | (10) | 5 | (14) | 9 | (3) | |||||||||
Other operating segments and business activities | 4.5 | (69) | (69) | ||||||||||||||
Total Avon | $ | 1,174.8 | (13)% | (5)% |
• | The Company recorded costs to implement ("CTI") restructuring of approximately $46 million, primarily related to the Open Up Avon initiative, mostly for professional services, headcount reductions and asset write-offs. |
• | The Company recorded approximately $13 million of other expenses, primarily professional fees incurred in relation to the Natura transaction, and other impairment losses on assets. |
Operating Profit/Margin | 2Q 2019 Operating Profit US$ | 2Q 2019 Operating Margin US$ | Change in US$ vs 2Q18 | |||||
Segment profit/margin | ||||||||
Europe, Middle East & Africa | $ | 59.0 | 13.9% | (100) bps | ||||
South Latin America | 65.2 | 14.7 | 400 | |||||
North Latin America | 19.1 | 9.9 | 70 | |||||
Asia Pacific | 10.8 | 10.0 | 350 | |||||
Total from reportable segments | 154.1 | 13.2 | 150 | |||||
Other operating segments and business activities | .5 | |||||||
Unallocated global expenses | (65.3 | ) | ||||||
Total Avon Adjusted (Non-GAAP) | $ | 89.3 | 7.6% | 190 bps | ||||
CTI restructuring initiatives | (45.7 | ) | ||||||
Impairment loss on assets and Other items | (13.1 | ) | ||||||
Total Avon Reported (GAAP) | $ | 30.5 | 2.6% | (130) bps | ||||
• | Free Cash Flow improved $59.6 million compared to the prior year as cash proceeds from asset sales funded Open Up Avon initiatives and net favorability resulted from improved earnings and working capital. |
• | Net cash provided by operating activities of continuing operations improved $17.5 million compared to the prior year, driven by higher cash generated from earnings and improved working capital, partially offset by an increase in restructuring payments. |
• | Net cash provided by investing activities of continuing operations improved $42.1 million compared to the prior year, primarily due to net proceeds from the sales of the Rye office and the Malaysia Maximin business. |
Three Months Ended June 30 | ||||||||||||
2019 | 2018 | Change vs 2Q18 | ||||||||||
Net cash provided (used) by operating activities of continuing operations | $ | 7.1 | $ | (10.4 | ) | $ | 17.5 | |||||
Net cash provided (used) by investing activities of continuing operations | $ | 19.2 | $ | (22.9 | ) | $ | 42.1 | |||||
Free Cash Flow | $ | 26.3 | $ | (33.3 | ) | $ | 59.6 |
Contacts (Investors & Media): |
Amy Greene |
Avon Investor & Stakeholder Relations |
(212) 282-5320 |
or |
James Golden/Leigh Parrish/Sophie Throsby |
Joele Frank, Wilkinson Brimmer Katcher |
(212) 355-4449 |
Three Months Ended | Percent Change | Six Months Ended | Percent Change | ||||||||||||||||||
June 30 | June 30 | ||||||||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||||||||
Product sales | $ | 1,108.8 | $ | 1,268.8 | (13)% | $ | 2,225.0 | $ | 2,578.4 | (14)% | |||||||||||
Other revenue | 66.0 | 83.1 | 136.7 | 167.0 | |||||||||||||||||
Total revenue | 1,174.8 | 1,351.9 | (13)% | 2,361.7 | 2,745.4 | (14)% | |||||||||||||||
Cost of sales | (497.5 | ) | (539.7 | ) | (1,014.5 | ) | (1,119.4 | ) | |||||||||||||
Selling, general and administrative expenses | (646.8 | ) | (759.2 | ) | (1,320.6 | ) | (1,528.1 | ) | |||||||||||||
Operating profit | 30.5 | 53.0 | (42)% | 26.6 | 97.9 | (73)% | |||||||||||||||
Interest expense | (30.7 | ) | (34.5 | ) | (63.9 | ) | (70.7 | ) | |||||||||||||
Loss on extinguishment of debt and credit facilities | — | (2.9 | ) | (2.0 | ) | (2.9 | ) | ||||||||||||||
Interest income | 1.5 | 3.5 | 3.2 | 7.7 | |||||||||||||||||
Other income (expense), net | 6.8 | (19.4 | ) | 29.4 | (21.9 | ) | |||||||||||||||
Gain on sale of business / assets | 13.2 | — | 23.5 | — | |||||||||||||||||
Total other expenses | (9.2 | ) | (53.3 | ) | (9.8 | ) | (87.8 | ) | |||||||||||||
Income (loss) from continuing operations, before income taxes | 21.3 | (0.3 | ) | * | 16.8 | 10.1 | 66% | ||||||||||||||
Income taxes | (27.2 | ) | (36.7 | ) | (46.7 | ) | (68.2 | ) | |||||||||||||
Loss from continuing operations, net of tax | (5.9 | ) | (37.0 | ) | 84% | (29.9 | ) | (58.1 | ) | 49% | |||||||||||
Loss from discontinued operations, net of tax | (13.2 | ) | — | (22.7 | ) | — | |||||||||||||||
Net loss | (19.1 | ) | (37.0 | ) | 48% | (52.6 | ) | (58.1 | ) | 9% | |||||||||||
Net (income) loss attributable to noncontrolling interests | (0.4 | ) | 0.9 | 0.4 | 1.7 | ||||||||||||||||
Net loss attributable to Avon | $ | (19.5 | ) | $ | (36.1 | ) | 46% | $ | (52.2 | ) | $ | (56.4 | ) | 7% | |||||||
Loss per share (1) | |||||||||||||||||||||
Basic | |||||||||||||||||||||
Basic EPS from continuing operations | $ | (0.03 | ) | $ | (0.09 | ) | 67% | $ | (0.09 | ) | $ | (0.15 | ) | 40% | |||||||
Basic EPS from discontinued operations | (0.03 | ) | — | * | (0.05 | ) | — | * | |||||||||||||
Basic EPS attributable to Avon | $ | (0.06 | ) | $ | (0.09 | ) | 33% | $ | (0.14 | ) | $ | (0.15 | ) | 7% | |||||||
Diluted | |||||||||||||||||||||
Diluted EPS from continuing operations | $ | (0.03 | ) | $ | (0.09 | ) | 67% | $ | (0.09 | ) | $ | (0.15 | ) | 40% | |||||||
Diluted EPS from discontinued operations | (0.03 | ) | — | * | (0.05 | ) | — | * | |||||||||||||
Diluted EPS attributable to Avon | $ | (0.06 | ) | $ | (0.09 | ) | 33% | $ | (0.14 | ) | $ | (0.15 | ) | 7% | |||||||
Weighted-average shares outstanding: | |||||||||||||||||||||
Basic | 442.3 | 442.2 | 442.5 | 441.5 | |||||||||||||||||
Diluted | 442.5 | 442.2 | 442.6 | 441.5 | |||||||||||||||||
* Calculation not meaningful | |||||||||||||||||||||
(1) Under the two-class method, loss per share is calculated using net loss allocable to common shares, which is derived by reducing net loss by the loss allocable to participating securities and earnings allocated to convertible preferred stock. Net loss allocable to common shares used in the basic and diluted earnings per share calculation was ($25.5) and ($41.7) for the three months ended June 30, 2019 and 2018, respectively. Net loss allocable to common shares used in the basic and diluted earnings per share calculation was ($64.1) and ($67.8) for the six months ended June 30, 2019 and 2018, respectively. |
June 30, | March 31, | December 31, | ||||||||||
2019 | 2019 | 2018 | ||||||||||
Assets | ||||||||||||
Current Assets | ||||||||||||
Cash and cash equivalents | $ | 421.0 | $ | 406.4 | $ | 532.7 | ||||||
Restricted cash | — | 17.0 | — | |||||||||
Accounts receivable, net | 332.8 | 340.9 | 349.7 | |||||||||
Inventories | 515.6 | 532.3 | 542.0 | |||||||||
Prepaid expenses and other | 264.2 | 255.2 | 272.0 | |||||||||
Assets held for sale | 10.1 | 15.7 | 65.6 | |||||||||
Total current assets | 1,543.7 | 1,567.5 | 1,762.0 | |||||||||
Property, plant and equipment, at cost | 1,177.8 | 1,200.5 | 1,207.8 | |||||||||
Less accumulated depreciation | (657.6 | ) | (657.3 | ) | (650.2 | ) | ||||||
Property, plant and equipment, net | 520.2 | 543.2 | 557.6 | |||||||||
Right-of-use assets | 174.9 | 180.3 | — | |||||||||
Goodwill | 89.9 | 88.6 | 87.4 | |||||||||
Deferred tax asset | 208.2 | 204.2 | 212.6 | |||||||||
Other assets | 434.3 | 413.7 | 390.4 | |||||||||
Total assets | $ | 2,971.2 | $ | 2,997.5 | $ | 3,010.0 | ||||||
Liabilities, Series C Convertible Preferred Stock and Shareholders' Deficit | ||||||||||||
Current Liabilities | ||||||||||||
Debt maturing within one year | 398.5 | 425.4 | 12.0 | |||||||||
Accounts payable | 682.2 | 706.0 | 816.5 | |||||||||
Accrued compensation | 94.1 | 103.9 | 85.5 | |||||||||
Other accrued liabilities | 436.1 | 425.2 | 451.3 | |||||||||
Sales taxes and taxes other than income | 116.0 | 94.1 | 103.9 | |||||||||
Income taxes | 11.7 | 11.0 | 15.9 | |||||||||
Liabilities held for sale | — | 0.1 | 11.4 | |||||||||
Current liabilities of discontinued operations | 18.1 | 9.5 | — | |||||||||
Total current liabilities | 1,756.7 | 1,775.2 | 1,496.5 | |||||||||
Long-term debt | 1,197.0 | 1,196.4 | 1,581.6 | |||||||||
Long-term operating lease liability | 144.8 | 150.4 | — | |||||||||
Employee benefit plans | 129.6 | 128.2 | 128.3 | |||||||||
Long-term income taxes | 140.9 | 135.3 | 136.2 | |||||||||
Other liabilities | 54.8 | 55.2 | 72.1 | |||||||||
Total liabilities | 3,423.8 | 3,440.7 | 3,414.7 | |||||||||
Series C convertible preferred stock | 504.7 | 498.3 | 492.1 | |||||||||
Shareholders' Deficit | ||||||||||||
Common stock | 190.7 | 190.6 | 190.3 | |||||||||
Additional paid-in capital | 2,307.5 | 2,302.1 | 2,303.6 | |||||||||
Retained earnings | 2,169.5 | 2,195.4 | 2,234.3 | |||||||||
Accumulated other comprehensive loss | (1,028.9 | ) | (1,034.4 | ) | (1,030.4 | ) | ||||||
Treasury stock, at cost | (4,603.3 | ) | (4,602.3 | ) | (4,602.3 | ) | ||||||
Total Avon shareholders' deficit | (964.5 | ) | (948.6 | ) | (904.5 | ) | ||||||
Noncontrolling interests | 7.2 | 7.1 | 7.7 | |||||||||
Total shareholders' deficit | (957.3 | ) | (941.5 | ) | (896.8 | ) | ||||||
Total liabilities, series C convertible preferred stock and shareholders' deficit | $ | 2,971.2 | $ | 2,997.5 | $ | 3,010.0 | ||||||
Three Months Ended | Six Months Ended | |||||||||||||||
June 30 | June 30 | |||||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||
Cash Flows from Operating Activities | ||||||||||||||||
Net loss | $ | (19.1 | ) | $ | (37.0 | ) | $ | (52.6 | ) | $ | (58.1 | ) | ||||
Loss from discontinued operations, net of tax | (13.2 | ) | — | (22.7 | ) | — | ||||||||||
Loss from continuing operations, net of tax | (5.9 | ) | (37.0 | ) | (29.9 | ) | (58.1 | ) | ||||||||
Adjustments to reconcile net loss to net cash provided (used) by operating activities: | ||||||||||||||||
Depreciation | 15.9 | 20.8 | 36.5 | 41.6 | ||||||||||||
Amortization | 6.2 | 6.7 | 12.8 | 13.8 | ||||||||||||
Provision for doubtful accounts | 28.8 | 43.1 | 58.7 | 86.2 | ||||||||||||
Provision for obsolescence | 9.5 | 3.6 | 16.2 | 13.3 | ||||||||||||
Share-based compensation | 5.7 | 3.7 | 5.2 | 7.5 | ||||||||||||
Foreign exchange losses (gains) | 11.9 | 8.9 | (7.3 | ) | 13.5 | |||||||||||
Deferred income taxes | (0.9 | ) | (2.0 | ) | 7.3 | (0.2 | ) | |||||||||
Impairment loss on assets | 13.3 | — | 13.3 | — | ||||||||||||
Gain on sale of business / assets | (13.2 | ) | — | (23.5 | ) | — | ||||||||||
Other | 3.5 | — | 5.2 | 3.2 | ||||||||||||
Changes in assets and liabilities: | ||||||||||||||||
Accounts receivable | (16.6 | ) | (45.6 | ) | (40.9 | ) | (50.0 | ) | ||||||||
Inventories | 13.2 | (41.3 | ) | 18.0 | (99.7 | ) | ||||||||||
Prepaid expenses and other | (23.2 | ) | 1.6 | 15.2 | 1.7 | |||||||||||
Accounts payable and accrued liabilities | (47.1 | ) | 29.7 | (211.3 | ) | (76.6 | ) | |||||||||
Income and other taxes | 19.2 | 0.6 | 7.2 | (0.3 | ) | |||||||||||
Noncurrent assets and liabilities | (13.2 | ) | (3.2 | ) | (18.3 | ) | (2.6 | ) | ||||||||
Net cash provided (used) by operating activities of continuing operations | 7.1 | (10.4 | ) | (135.6 | ) | (106.7 | ) | |||||||||
Cash Flows from Investing Activities | ||||||||||||||||
Capital expenditures | (11.3 | ) | (20.2 | ) | (32.5 | ) | (48.0 | ) | ||||||||
Disposal of assets | 0.4 | 0.6 | 0.8 | 1.4 | ||||||||||||
Net proceeds from sale of business | 30.1 | — | 76.5 | — | ||||||||||||
Other investing activities | — | (3.3 | ) | — | (3.3 | ) | ||||||||||
Net cash provided (used) by investing activities of continuing operations | 19.2 | (22.9 | ) | 44.8 | (49.9 | ) | ||||||||||
Cash Flows from Financing Activities | ||||||||||||||||
Debt, net (maturities of three months or less) | (26.7 | ) | (14.0 | ) | 0.5 | (10.4 | ) | |||||||||
Repayment of debt | (0.3 | ) | (238.1 | ) | (0.3 | ) | (238.6 | ) | ||||||||
Repurchase of common stock | (1.1 | ) | (0.5 | ) | (1.1 | ) | (3.2 | ) | ||||||||
Other financing activities | — | (0.1 | ) | (9.2 | ) | (0.1 | ) | |||||||||
Net cash used by financing activities of continuing operations | (28.1 | ) | (252.7 | ) | (10.1 | ) | (252.3 | ) | ||||||||
Cash Flows from Discontinued Operations | ||||||||||||||||
Net cash used by operating activities of discontinued operations | (4.6 | ) | — | (4.6 | ) | — | ||||||||||
Net cash used by discontinued operations | (4.6 | ) | — | (4.6 | ) | — | ||||||||||
Effect of exchange rate changes on cash and cash equivalents, and restricted cash | 4.0 | (42.6 | ) | (2.3 | ) | (28.7 | ) | |||||||||
Net decrease in cash and cash equivalents, and restricted cash | (2.4 | ) | (328.6 | ) | (107.8 | ) | (437.6 | ) | ||||||||
Cash and cash equivalents, and restricted cash at beginning of period (1) | 431.0 | 772.5 | 536.4 | 881.5 | ||||||||||||
Cash and cash equivalents, and restricted cash at end of period (2) | $ | 428.6 | $ | 443.9 | $ | 428.6 | $ | 443.9 |
(1) | The balance at the beginning of the six month period ended June 30, 2019 includes cash and cash equivalents of $3.7 classified as Assets held for sale in the Company's Consolidated Balance Sheets at the end of the year in 2018 |
(2) | Includes restricted cash of $7.6 related to the sale of Avon Manufacturing (Guangzhou), Ltd. at June 30, 2019. |
THREE MONTHS ENDED JUNE 30, 2019 | ||||||||||||||||
Reported (GAAP) | CTI restructuring initiatives | Impairment loss on assets and other items2 | Adjusted (Non-GAAP) | |||||||||||||
Total revenue | $ | 1,174.8 | $ | — | $ | — | $ | 1,174.8 | ||||||||
Cost of sales | (497.5 | ) | 8.6 | — | (488.9 | ) | ||||||||||
Selling, general and administrative expenses | (646.8 | ) | 37.1 | 13.1 | (596.6 | ) | ||||||||||
Operating profit | 30.5 | 45.7 | 13.1 | 89.3 | ||||||||||||
Gain on sale of business / assets1 | 13.2 | (13.2 | ) | — | — | |||||||||||
All other expenses | (22.4 | ) | — | — | (22.4 | ) | ||||||||||
Income from continuing operations, before income taxes | 21.3 | 32.5 | 13.1 | 66.9 | ||||||||||||
Income taxes | (27.2 | ) | (6.6 | ) | — | (33.8 | ) | |||||||||
(Loss) income from continuing operations, net of tax | $ | (5.9 | ) | $ | 25.9 | $ | 13.1 | $ | 33.1 | |||||||
Diluted EPS from continuing operations | $ | (0.03 | ) | $ | 0.06 | |||||||||||
Gross margin | 57.7 | % | 0.7 | — | 58.4 | % | ||||||||||
SG&A as a % of revenue | 55.1 | % | (3.2 | ) | (1.1 | ) | 50.8 | % | ||||||||
Operating margin | 2.6 | % | 3.9 | 1.1 | 7.6 | % | ||||||||||
Effective tax rate | 127.7 | % | 50.5 | % | ||||||||||||
Three Months Ended June 30, 2019 | ||||
Net cash provided by operating activities of continuing operations | $ | 7.1 | ||
Net cash provided by investing activities of continuing operations | 19.2 | |||
Free cash flow | $ | 26.3 | ||
Net cash used by financing activities of continuing operations | $ | (28.1 | ) | |
SIX MONTHS ENDED JUNE 30, 2019 | ||||||||||||||||
Reported (GAAP) | CTI restructuring initiatives | Impairment loss on assets and other items 2 | Adjusted (Non-GAAP) | |||||||||||||
Total revenue | $ | 2,361.7 | $ | — | $ | — | $ | 2,361.7 | ||||||||
Cost of sales | (1,014.5 | ) | 12.9 | — | (1,001.6 | ) | ||||||||||
Selling, general and administrative expenses | (1,320.6 | ) | 86.3 | 17.2 | (1,217.1 | ) | ||||||||||
Operating profit | 26.6 | 99.2 | 17.2 | 143.0 | ||||||||||||
Gain on sale of business / assets1 | 23.5 | (23.5 | ) | — | — | |||||||||||
All other expenses | (33.3 | ) | — | — | (33.3 | ) | ||||||||||
Income from continuing operations, before income taxes | 16.8 | 75.7 | 17.2 | 109.7 | ||||||||||||
Income taxes | (46.7 | ) | (10.3 | ) | — | (57.0 | ) | |||||||||
(Loss) income from continuing operations, net of tax | $ | (29.9 | ) | $ | 65.4 | $ | 17.2 | $ | 52.7 | |||||||
Diluted EPS from continuing operations | $ | (0.09 | ) | $ | 0.09 | |||||||||||
Gross margin | 57.0 | % | 0.6 | — | 57.6 | % | ||||||||||
SG&A as a % of revenue | 55.9 | % | (3.6 | ) | (0.7 | ) | 51.5 | % | ||||||||
Operating margin | 1.1 | % | 4.2 | 0.7 | 6.1 | % | ||||||||||
Effective tax rate | 278.0 | % | 52.0 | % | ||||||||||||
Six Months Ended June 30, 2019 | ||||
Net cash used by operating activities of continuing operations | $ | (135.6 | ) | |
Net cash provided by investing activities of continuing operations | 44.8 | |||
Free cash flow | $ | (90.8 | ) | |
Net cash used by financing activities of continuing operations | $ | (10.1 | ) | |
THREE MONTHS ENDED JUNE 30, 2018 | ||||||||||||||||
Reported (GAAP) | CTI restructuring initiatives | Special tax items | Adjusted (Non-GAAP) | |||||||||||||
Total revenue | $ | 1,351.9 | $ | — | $ | — | $ | 1,351.9 | ||||||||
Cost of sales | (539.7 | ) | 0.5 | — | (539.2 | ) | ||||||||||
Selling, general and administrative expenses | (759.2 | ) | 23.2 | — | (736.0 | ) | ||||||||||
Operating profit | 53.0 | 23.7 | — | 76.7 | ||||||||||||
(Loss) income before income taxes | (0.3 | ) | 23.7 | — | 23.4 | |||||||||||
Income taxes | (36.7 | ) | — | 5.5 | (31.2 | ) | ||||||||||
Net loss | $ | (37.0 | ) | $ | 23.7 | $ | 5.5 | $ | (7.8 | ) | ||||||
Diluted EPS | $ | (0.09 | ) | $ | (0.03 | ) | ||||||||||
Gross margin | 60.1 | % | — | — | 60.1 | % | ||||||||||
SG&A as a % of revenue | 56.2 | % | (1.8 | ) | — | 54.4 | % | |||||||||
Operating margin | 3.9 | % | 1.8 | — | 5.7 | % | ||||||||||
Effective tax rate | * | 133.3 | % | |||||||||||||
Three Months Ended June 30, 2018 | ||||
Net cash used by operating activities of continuing operations | $ | (10.4 | ) | |
Net cash used by investing activities of continuing operations | (22.9 | ) | ||
Free cash flow | $ | (33.3 | ) | |
Net cash used by financing activities of continuing operations | $ | (252.7 | ) | |
SIX MONTHS ENDED JUNE 30, 2018 | ||||||||||||||||
Reported (GAAP) | CTI restructuring initiatives | Special tax items | Adjusted (Non-GAAP) | |||||||||||||
Total revenue | $ | 2,745.4 | $ | — | $ | — | $ | 2,745.4 | ||||||||
Cost of sales | (1,119.4 | ) | 1.1 | — | (1,118.3 | ) | ||||||||||
Selling, general and administrative expenses | (1,528.1 | ) | 33.5 | — | (1,494.6 | ) | ||||||||||
Operating profit | 97.9 | 34.6 | — | 132.5 | ||||||||||||
Income before income taxes | 10.1 | 34.6 | — | 44.7 | ||||||||||||
Income taxes | (68.2 | ) | (2.1 | ) | 14.7 | (55.6 | ) | |||||||||
Net loss | $ | (58.1 | ) | $ | 32.5 | $ | 14.7 | $ | (10.9 | ) | ||||||
Diluted EPS | $ | (0.15 | ) | $ | (0.05 | ) | ||||||||||
Gross margin | 59.2 | % | — | — | 59.3 | % | ||||||||||
SG&A as a % of revenue | 55.7 | % | (1.2 | ) | — | 54.4 | % | |||||||||
Operating margin | 3.6 | % | 1.2 | — | 4.8 | % | ||||||||||
Effective tax rate | 675.2 | % | 124.4 | % | ||||||||||||
Six Months Ended June 30, 2018 | ||||
Net cash used by operating activities of continuing operations | $ | (106.7 | ) | |
Net cash used by investing activities of continuing operations | (49.9 | ) | ||
Free cash flow | $ | (156.6 | ) | |
Net cash used by financing activities of continuing operations | $ | (252.3 | ) | |
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