Full Press Release Details
Brands Holdings, Inc. Reports Third Quarter & Nine Months Fiscal 2011
the Quarter, Prestige Reports Strong Revenue Growth, Driven by Core OTC Growth
and Blacksmith Brands Acquisition
N.Y., Feb 9, 2011 (BUSINESS WIRE) --
Brands Holdings, Inc. (NYSE:PBH) today announced results for the third quarter
and nine months of fiscal year 2011, which ended on December 31, 2010. Following
the close of the quarter, the Company completed the previously announced
acquisition of the Dramamine Brand in the U.S. from McNeil-PPC,
for the third fiscal quarter were $90.6 million, $16.8 million or 22.7% above
the prior year's comparable quarter revenues of $73.8 million. The Company's
revenue from its five core OTC brands (Chloraseptic , Clear Eyes , Compound W ,
Little Remedies and The Doctor's NightGuard ) increased 14.0% over the prior
year comparable quarter. Revenue for the third fiscal quarter for the remaining
OTC brands, the Household segment and International, decreased 7% versus the
prior year comparable period. Overall, revenues were up $1.6 million, or 2%
above the prior year's comparable quarter, excluding the impact of the
Blacksmith Brands ("BSB") acquisition in November, 2010.
income for the third fiscal quarter was $13.0 million, which was impacted by
$10.5 million of charges associated with the acquisition of BSB. Excluding the
impact of these charges, operating income would have been $23.5 million, $0.2
million or 1.0% above the prior year's comparable quarter operating income of
$23.3 million. Gross profit for the third fiscal quarter was $44.0 million,
which included $3.5 million of charges associated with the inventory valuation
from the BSB acquisition. Excluding the impact of these acquisition related
charges, gross profit would have been $47.5 million and gross margin would have
been stable at approximately 53% of net revenue, in line with the prior year's
quarter. During the quarter, the Company invested significantly behind
Advertising and Promotion ("A&P") in support of its core brands within the
Over-the-Counter ("OTC") segment as well as the acquired brands from
from continuing operations for the third fiscal quarter was $2.1 million and was
impacted by $8.2 million of acquisition related charges, net of tax. Excluding
the impact of these acquisition related charges, income from continuing
operations would have been $10.3 million, 2.4% higher than the prior year
comparable period's results of $10.0 million.
third fiscal quarter, basic earnings per share from continuing operations was
$0.04, and was impacted by the acquisition related charges by $0.17. Excluding
the impact of the acquisition related charges, basic earnings per share from
continuing operations would have been $0.21 compared to $0.20 in the prior
year's third fiscal quarter.
pleased with our results for the quarter. Our strategy for growing the core OTC
brands is well underway. Increased investment in advertising and promotion
coupled with new product introductions resulted in strong sell through during
the quarter. Consumption for Prestige's core OTC brands, including Blacksmith
Brands, grew 26.5% during the quarter, as compared to a decline of 1% for the
respective categories," said Matthew Mannelly, President and CEO. "In addition,
our M&A focus is driving the Company's strategic and financial
transformation. The Blacksmith Brands integration is on track and we are making
the appropriate advertising and promotional investment to support long-term
sustainable growth," he said. "Furthermore, we just completed the acquisition of
the Dramamine brand in the U.S. Dramamine has the dominant position in the
motion sickness category and possesses attractive growth characteristics. With
the addition of this brand, our OTC segment now includes nine core OTC brands
which represent approximately 90% of our OTC segment revenue. Looking forward,
we are cautiously optimistic as the retail environment shows some signs of
improvement. We will continue to view this as an opportunity to build our brands
and invest in our future growth. We expect our continued investments in the
fourth quarter to position our expanded core OTC portfolio for growth in fiscal
year 2012 and beyond."
Quarter Results by Segment
for the OTC segment increased $20.9 million, or 44.9%, during the third quarter
of fiscal year 2011 versus the same period in fiscal year 2010. This increase
was primarily due to $15.2 million of revenues attributable to the acquired BSB
products. The OTC segment increased revenues by $5.7 million or 12.3%, excluding
the impact of the acquisition of BSB. Overall, revenue increases for
Chloraseptic , Little Remedies , Compound W and Clear Eyes brands were
partially offset by revenue decreases for The Doctor's brand. To drive revenue
growth, the Company increased advertising and promotional activities, which led
to increased consumption at retail.
for the Household segment decreased $4.1 million, or 15.1%, during fiscal year
2011 versus the same period in fiscal year 2010. In a challenging retail and
competitive market, the Company's largest Household brand, Comet , grew market
share in abrasive cleaners while experiencing revenue declines in bathroom
sprays primarily due to competitive new product introductions and lower consumer
nine month period ending December 31, 2010, revenues were $240.1 million, an
increase of 7.9% over the prior year comparable period's results of $222.7
million. Revenues were $2.2 million, or 1% above the prior year's comparable
period, excluding the BSB revenues.
income for the nine month period ending December 31, 2010 was $57.5 million,
which was impacted by $10.5 million of charges associated with the acquisition
of BSB. Excluding the impact of these charges, operating income would have been
$68.0 million, $7.3 million or 12.1% above the prior year's comparable period
operating income of $60.7 million. Gross profit for the current nine month
period was $124.6 million, which included $3.5 million of charges associated
with the inventory valuation from the BSB acquisition. Excluding the impact of
these acquisition related charges, gross profit would have been $128.1 million
and gross margin would have been stable at approximately 53% of revenue, in line
with the prior year's comparable period.
from continuing operations was $22.7 million and was impacted by $8.2 million of
acquisition related charges, net of tax. Excluding the impact of these charges,
income from continuing operations would have been $30.9 million, an increase of
17.7%, compared to $26.3 million in the prior year's comparable
current nine month period, basic earnings per share from continuing operations
was $0.46, and was impacted by the acquisition related charges by $0.16.
Excluding the impact of the acquisition related charges, basic earnings per
share from continuing operations would have been $0.62 compared to $0.53, 17.4%
higher than the prior year's comparable period.
flow is a "non-GAAP" financial measure as that term is defined by the Securities
and Exchange Commission in Regulation G. Free cash flow is presented here
because management believes it is a commonly used measure of liquidity, and
indicative of cash available for debt repayment and acquisitions. The Company