Full Press Release Details
Brands Holdings, Inc. Reports Fiscal First Quarter 2011 Results
NY, August 5, 2010-Prestige Brands Holdings, Inc. (NYSE-PBH) today announced
results for the first quarter of fiscal 2011, which ended on June 30,
income from continuing operations for the first quarter was $9.6 million, or
$0.19 of fully diluted earnings per share, 20% higher than the prior year's
comparable period's net income of $8.0 million or $0.16 per fully diluted
revenues for the quarter ended June 30, 2010 were $73.4 million, 3% higher than
the prior year comparable quarter's results of $71.0 million.
income for the first fiscal quarter was $21.3 million, 15% higher than the prior
year's comparable period results of $18.5 million. The increase in
operating income was due to an increase in gross profit resulting from higher
revenues combined with favorable advertising and promotion (A&P) and general
and administrative (G&A) expenditures.
quarter's results affirm the strength of our core OTC business model and the
overall direction of our strategic plan," said Matthew Mannelly, President and
CEO. "We are pleased with the growth of our core OTC brands as well
as their long-term potential. We remain confident in achieving our long-term
goals, however, we are realistic about the overall economic environment and the
challenges we face for the full year. In particular, given last years' heavy
retailer buy-in of cough/cold products in anticipation of H1N1, the second
quarter will be challenging from a revenue standpoint. Retailers have
told us as well as our competitors that this buy-in will not be repeated this
year in the second quarter."
Mannelly concluded, "We continue to look at optimizing our growth portfolio as a
marathon, not a sprint. With our refinancing in place, we are focused on both
organic growth in our core OTC brands as well as pursuing appropriate outside
by Segment for the First Fiscal Quarter
Healthcare Products (OTC)
revenues of $44.3 million for the OTC segment were $4.0 million or 10% higher
than the prior year comparable period results of $40.3 million. The
increase was driven by sales of Clear Eyes , Compound W , Wartner , New Skin ,
Tears, Percogesic , and Sleep-Eze in Canada, partially offset by decreases on
the Allergen Block products and Earigate .
Company's six core brands, five are in the OTC segment. These include
Chloraseptic , Clear Eyes , Compound W , Little Remedies , and The Doctor's
NightGuard . Revenues for our core OTC brands were up 16% in the aggregate over
the prior year comparable quarter.
for this segment were $26.5 million, 3% less than the comparable first quarter
of fiscal 2010. A sales increase on the Spic and Span brand was
offset by declines on the Comet and Chore Boy brands.
for this segment were $2.6 million, 22% below the prior year comparable
quarter's revenues of $3.3 million. The sales decline traces to
distribution losses for the Cutex brand in the fall of 2010.
flow is a "non-GAAP" 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 is
an indication of cash available for debt repayment and
acquisitions. The Company defines free cash flow as operating cash
flows less capital expenditures.
Company's free cash flow for the first quarter ended June 30, 2010 was $20.6
million, composed of operating cash flow of $20.7 million, less capital
expenditures of $0.1 million. This is a $2.6 million increase over
the comparable quarter's free cash flow of $18.0 million, composed of operating
cash flow of $18.1 million, less capital expenditures of $0.1
Company will host a conference call today at 8:30 a.m. EDT. To access
the call, listeners calling from within North America may dial 800-299-0433 at
least 15 minutes prior to the start of the call. To access the call
from outside North America, callers should dial 617-801-9712. The
conference passcode is "prestige". The Company will provide a live
internet webcast as well as an archived replay, which can be accessed from the
Investor Relations page of http://prestigebrandsinc.com. Telephonic
replays will be available for two weeks following the completion of the call and
can be accessed at 888-286-8010 within North America, and at 617-801-6888 from
outside North America. The passcode is 79554986.
Prestige Brands Holdings, Inc.
in Irvington, New York, Prestige Brands Holdings, Inc. is a marketer and
distributor of brand name over-the-counter healthcare, household and personal
care products sold throughout the U.S., Canada and certain international
markets. Key brands include Compound W wart remover, Chloraseptic
sore throat and allergy treatment, New-Skin liquid bandage, Clear Eyes and
Murine eye and ear care products, The Doctor's NightGuard dental protector,
Little Remedies pediatric over-the-counter products, Cutex nail polish
remover, Comet and Spic and Span household products, and other well-known
This news release contains "forward-looking statements" within the meaning of
the federal securities laws and that are intended to qualify for the Safe Harbor
from liability established by the Private Securities Litigation Reform Act of
1995. "Forward-looking statements" generally can be identified by the use
of forward-looking terminology such as "assumptions," "target," "guidance,"
"outlook," "plans," "projection," "may," "will," "would," "expect," "intend,"
"estimate," "anticipate," "believe, "potential," or "continue" (or the negative
or other derivatives of each of these terms) or similar terminology. The
"forward-looking statements" include, without limitation, statements regarding
the Company's future performance, liquidity, and borrowing capacity of
Prestige Brands Holdings. These statements are based on management's
estimates and assumptions with respect to future events and financial
performance and are believed to be reasonable, though are inherently uncertain
and difficult to predict. Actual results could differ materially from
those expected as a result of a variety of factors. A discussion of
factors that could cause results to vary is included in the Company's Annual
Report on Form 10-K and other periodic and other reports filed with the
Securities and Exchange Commission.
Consolidated Statements of
| Three Months Ended June 30 | ||||||||
| (In thousands, except share data) | 2010 | 2009 | ||||||
| Revenues | ||||||||
| Net sales | $ | 72,706 | $ | 70,395 | ||||
| Other revenues | 719 | 617 | ||||||
| Total revenues | 73,425 | 71,012 | ||||||
| Cost of Sales | ||||||||
| Cost of sales (exclusive of depreciation shown below) | 34,546 | 33,181 | ||||||
| Gross profit | 38,879 | 37,831 | ||||||
| Operating Expenses | ||||||||
| Advertising and promotion | 7,598 | 8,765 | ||||||
| General and administrative | 7,414 | 8,195 | ||||||
| Depreciation and amortization | 2,547 | 2,345 | ||||||
| Total operating expenses | 17,559 | 19,305 | ||||||
| Operating income | 21,320 | 18,526 | ||||||
| Other expense | ||||||||
| Interest expense | 5,461 | 5,654 | ||||||
| Loss on extinguishment of debt | 300 | - | ||||||
| Total other expense | 5,761 | 5,654 | ||||||
| Income from continuing operations before income taxes | 15,559 | 12,872 | ||||||
| Provision for income taxes | 5,944 | 4,878 | ||||||
| Income from continuing operations | 9,615 | 7,994 | ||||||
| Discontinued Operations | ||||||||
| Income (loss) from discontinued operations, net of income tax | (10 | ) | 331 | |||||
| Net income | $ | 9,605 | $ | 8,325 | ||||
| Basic earnings per share: | ||||||||
| Income from continuing operations | $ | 0.19 | $ | 0.16 | ||||
| Net income | $ | 0.19 | $ | 0.17 | ||||
| Diluted earnings per share: | ||||||||
| Income from continuing operations | $ | 0.19 | $ | 0.16 | ||||
| Net income | $ | 0.19 | $ | 0.17 | ||||
| Weighted average shares outstanding: | ||||||||
| Basic | 50,038 | 49,982 | ||||||
| Diluted | 50,105 | 50,095 |
Brands Holdings, Inc.
Consolidated Balance
| (In thousands) Assets | June 30, 2010 | March 31, 2010 | ||||||
| Current assets | ||||||||
| Cash and cash equivalents | $ | 33,106 | $ | 41,097 | ||||
| Accounts receivable | 28,543 | 30,621 | ||||||
| Inventories | 28,076 | 29,162 | ||||||
| Deferred income tax assets | 6,745 | 6,353 | ||||||
| Prepaid expenses and other current assets | 2,888 | 4,917 | ||||||
| Total current assets | 99,358 | 112,150 | ||||||
| Property and equipment | 1,243 | 1,396 | ||||||
| Goodwill | 111,489 | 111,489 | ||||||
| Intangible assets | 556,840 | 559,229 | ||||||
| Other long-term assets | 6,705 | 7,148 | ||||||
| Total Assets | $ | 775,635 | $ | 791,412 | ||||
| Liabilities and Stockholders' Equity | ||||||||
| Current liabilities | ||||||||
| Accounts payable | $ | 12,112 | $ | 12,771 | ||||
| Accrued interest payable | 3,443 | 1,561 | ||||||
| Other accrued liabilities | 10,161 | 11,733 | ||||||
| Current portion of long-term debt | 1,500 | 29,587 | ||||||
| Total current liabilities | 27,216 | 55,652 | ||||||
| Long-term debt | ||||||||
| Principal amount | 298,125 | 298,500 | ||||||
| Less unamortized discount | (3,801 | ) | (3,943 | ) | ||||
| Long-term debt, net of unamortized discount | 294,324 | 294,557 | ||||||
| Deferred income tax liabilities | 114,574 | 112,144 | ||||||
| Total Liabilities | 436,114 | 462,353 | ||||||
| Stockholders' Equity | ||||||||
| Preferred stock - $0.01 par value | ||||||||
| Authorized - 5,000 shares | ||||||||
| Issued and outstanding - None | - | - | ||||||
| Common stock - $0.01 par value | ||||||||
| Authorized - 250,000 shares | ||||||||
| Issued - 50,173 shares at June 30, 2010 and 50,154 shares at March 31, 2010 | 502 | 502 | ||||||
| Additional paid-in capital | 384,884 | 384,027 | ||||||
| Treasury stock, at cost - 124 shares at June 30, 2010 and March 31, 2010 | (63 | ) | (63 | ) | ||||
| Accumulated other comprehensive income (loss) | - | - | ||||||
| Retained earnings (accumulated deficit) | (45,802 | ) | (55,407 | ) | ||||
| Total Stockholders' Equity | 339,521 | 329,059 | ||||||
| Total Liabilities and Stockholders' Equity | $ | 775,635 | $ | 791,412 |
Prestige Brands Holdings,
Consolidated Statements of Cash
| Three Months Ended June 30 | ||||||||
| (In thousands) | 2010 | 2009 | ||||||
| Operating Activities | ||||||||
| Net income | $ | 9,605 | $ | 8,325 | ||||
| Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
| Depreciation and amortization | 2,547 | 2,777 | ||||||
| Deferred income taxes | 2,036 | 2,430 | ||||||
| Amortization of deferred financing costs | 397 | 480 | ||||||
| Impairment of goodwill and intangible assets | ||||||||
| Stock-based compensation cost | 857 | 671 | ||||||
| Loss on extinguishment of debt | 300 | - | ||||||
| Loss on disposition of equipment | 126 | - | ||||||
| Changes in operating assets and liabilities | ||||||||
| Accounts receivable | 2,078 | 3,010 | ||||||
| Inventories | 1,086 | 528 | ||||||
| Prepaid expenses and other current assets | 2,029 | (1,452 | ) | |||||
| Accounts payable | (659 | ) | 584 | |||||
| Income taxes payable | - | 1,551 | ||||||
| Accrued liabilities | 310 | (836 | ) | |||||
| Net cash provided by operating activities | 20,712 | 18,068 | ||||||
| Investing Activities | ||||||||
| Purchases of equipment | (130 | ) | (98 | ) | ||||
| Net cash provided by (used for) investing activities | (130 | ) | (98 | ) | ||||
| Financing Activities | ||||||||
| Proceeds from the issuance of debt | - | - | ||||||
| Payment of deferred financing costs | (111 | ) | - | |||||
| Repayment of long-term debt | (28,462 | ) | (17,000 | ) | ||||
| Purchase of common stock for treasury | - | - | ||||||
| Net cash used for financing activities | (28,573 | ) | (17,000 | ) | ||||
| Increase (decrease) in cash | (7,991 | ) | 970 | |||||
| Cash - beginning of period | 41,097 | 35,181 | ||||||
| Cash - end of period | $ | 33,106 | $ | 36,151 | ||||
| Interest paid | $ | 3,182 | $ | 8,085 | ||||
| Income taxes paid | $ | 342 | $ | 1,100 |
Prestige Brands Holdings,