Revlon has announced a restructuring program expected to generate annualized cost reductions of between $200 million and $230 million by the end of 2022. The restructuring includes streamlining support functions and distribution activities, resulting in eliminating approximately 1,000 positions worldwide, including about 650 current employees and 350 open positions.
Preliminary unaudited fourth quarter results revealed net sales were $699.4 million, compared to $741.6 million during the prior-year period, a decline of 5.7 percent. On a constant currency basis, net sales decreased 4.8 percent driven primarily by net sales declines in the Fragrances and Revlon segments, partially offset by net sales growth in the Elizabeth Arden segment. Operating income improved to $76.7 million in the fourth quarter of 2019, compared to $32.2 million during the prior-year period. The higher operating income was driven by $30 million in lower SG&A expenses; a benefit from the prior-year non-recurring accelerated amortization related to Pure Ice brand intangible assets; a $26.6 million gain on the divestiture of certain regional brands, and a $18 million benefit from prior-year non-recurring goodwill impairment charge, partially offset by lower gross profit margin. Net income improved to $25.8 million in the fourth quarter of 2019 versus a $70.3 million net loss in the prior year period. The higher net income was driven primarily by the $44.5 million improvement in operating income, a $41.9 million improvement in the benefit from income taxes driven primarily by a non-cash release of a foreign valuation allowance and a $16 million favorable foreign currency impact versus the prior-year period, partially offset by higher interest expense.
In addition, Revlon has executed an agreement with Jefferies Finance LLC to refinance its senior notes due February 2021, bringing in $850 million in new financing to repay its 5.75 percent notes, of which there are $500 million outstanding. In 2020, Revlon expects to realize approximately $105 million to $115 million of in-year cost reductions and recognize approximately $55 million to $65 million of total pre-tax restructuring and related charges, consisting of employee-related costs, such as severance, retention and other contractual termination costs. The company expects restructuring charges in the range of $65 million to $75 million to be charged and paid in the period of 2021 to 2022.
Revlon continues to work with Goldman Sachs on reviewing strategic alternatives. Shares were down 2.2 percent post-market after declining 14.8 percent during the regular session.