IRVINGTON, N.Y., Feb 05, 2009 (BUSINESS WIRE) -- Prestige Brands Holdings, Inc. (NYSE-PBH), a consumer products company with a diversified portfolio of well-known brands in over-the-counter healthcare products, household products and personal care products, today announced results for the third fiscal quarter and nine months of it's 2009 fiscal year ended December 31, 2008.

Third Quarter Results

Net revenues for the third fiscal quarter ended December 31, 2008 were $80.3 million, slightly ahead of last year's comparable period net revenues of $80.2 million.

Operating income of $20.0 million for the third fiscal quarter was $2.9 million or 12.9% below last year's third quarter operating income of $22.9 million. Although the quarter's gross profit increased by $1.1 million, the increase was offset by increased advertising and promotion (A&P) and general and administrative expenses (G&A) of $1.8 million and $2.1 million, respectively. The gross profit increase was the result of a favorable sales mix and a reduction in obsolescence expenses. The A&P increase was driven by introductory advertising support for two new allergen block products, Chloraseptic(R) Allergen Block and Little Allergies(R) Allergen Block. G&A increased primarily due to stock-based compensation expenses in the current year, compared to a credit in the prior year quarter, resulting from the reversal of expenses associated with certain stock-based incentive compensation that did not vest because performance targets were not met.

Net income for the third quarter ended December 31, 2008 was $8.0 million or $0.16 per diluted share, 5% below the comparable period's net income of $8.4 million or $0.17 per diluted share. The decrease in operating income was partially offset by a reduction in interest expense due to lower debt outstanding and lower interest rates.

Commenting on the results of the quarter, Mark Pettie, Chairman and CEO said, "This was a challenging quarter for us in the face of a sharply deteriorating economic climate, highlighted by eroding retailer and consumer sentiment. A bright spot continues to be our free cash flow, which increased meaningfully in the third quarter, helping to enhance our liquidity position. Going forward we remain very cautious. While we are still confident in our long-term revenue projection of 2-4%, given the current macroeconomic environment and our year-to-date results, we do not anticipate achieving this growth rate in fiscal year 2009."

Results by Segment

Over-The-Counter (OTC) Healthcare Products

Net revenues for the OTC segment in the fiscal third quarter were $47.6 million, or 6% greater than the prior year comparable quarter. The increase resulted from sales of the new Chloraseptic(R) Allergen Block and Little Allergies(R) Allergen Block products, and sales increases in the Chloraseptic(R) and Little Remedies(R) base brands, New Skin(R) and Dermoplast(R). Those gains were partially offset by declines in sales in the Clear Eyes(R), Murine(R), Compound W(R) and Wartner(R) brands.

Household Products

Net revenues for the household products segment in the third fiscal quarter were $28.1 million, 6% lower than the prior year comparable quarter. This resulted primarily from sales declines in the Spic and Span(R) and Chore Boy(R) brands.

Personal Care Products

The smallest segment of the Company's business registered net revenues of $4.5 million for the third fiscal quarter, 10.2% below last year's third quarter results of $5.1 million. Sales increases in the Cutex(R) brand were offset by declines in the Denorex(R) and Prell(R) shampoo brands.

Free Cash Flow and Debt Repayment

Free cash flow is a "non-GAAP financial measure" as that term is defined by the Securities and Exchange Commission in Regulation G. We view "free cash flow" as an important measure because it is an indicator of cash available for debt repayment and to fund acquisitions. We define "free cash flow" as operating cash flow less capital expenditures.

The Company's free cash flow for the third quarter was $16.4 million, an increase of 16% over the prior year comparable quarter. Free cash flow is composed of operating cash flow of $16.7 million less capital expenditures of $286,000. This compares to the prior year comparable quarter's free cash flow of $14.1 million comprised of operating cash flow of $14.3 million less capital expenditures of $174,000. The free cash flow generated in the quarter enabled the Company to continue to build its cash position to $27.9 million at December 31, 2008 compared to $12.8 million at September 30, 2008. The Company previously announced its intention to enhance its liquidity position by building its cash reserves to approximately $30 million, and then to resume repayment of debt. Total indebtedness was reduced to $384.3 million at December 31, 2008.

Year-To-Date Results

For the nine months period ended December 31, 2008, total revenues were $241.9 million, 1.7% lower than the prior period comparable results of $246.2 million. Operating income of $61.7 million was 7.4% below the prior year comparable period results of $66.6 million, largely as a result of increased advertising and promotion expenses and increased general and administrative expenses. Net income for the nine month period ended December 31, 2008 was $24.3 million, 3.2% higher than the comparable period's results of $23.6 million as lower interest expenses offset the operating income decline.

Conference Call

The Company will host a conference call to review its third quarter fiscal 2009 results on Thursday, February 5, 2009 at 8:30 am (EST). The toll free dial in number is 800-638-4817. International callers may dial 617-614-3943. The conference password is "prestige". We will have a live internet webcast of the call, as well as an archived replay, which can be accessed from the Investor Relations page of www.prestigebrandsinc.com. The archived replay will be available for two weeks following completion of the call. The dial in numbers are 888-286-8010 (domestic) and 617-801-6888 (international). The pass code for the replay is 10641677.

About Prestige Brands Holdings, Inc.

Located in Irvington, New York, Prestige Brands Holdings, Inc. is a marketer and distributor of brand name over-the-counter products, personal care and household products sold throughout the U.S., Canada and certain international markets. Key brands include Compound W(R) wart remover, Chloraseptic(R) sore throat and allergy treatment, New-Skin(R) liquid bandage, Clear eyes(R) and Murine(R) eye and ear care products, Little Remedies(R) pediatric over-the-counter products, Cutex(R) nail polish remover, Comet(R) and Spic and Span(R) household products, and other well-known brands.

Forward Looking Statements

Note: This news release contains "forward-looking statements" within the meaning of the federal securities laws and is 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 economic outlook for the Company and the demand for its products, and future cash flows from operations. 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 projected as a result of certain 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.

Prestige Brands Holdings, Inc.
Consolidated Statements of Operations
(Unaudited)
			Three Months Ended December 31										Nine Months Ended December 31
(In thousands, except per share data)			2008					2007					2008					2007
Revenues
Net sales			$	79,657				$	79,644				$	239,942				$	244,525
Other revenues				621					578					1,921					1,645
Total revenues				80,278					80,222					241,863					246,170
Cost of Sales
Costs of sales				37,817					38,783					113,881					118,875
Gross profit				42,461					41,439					127,982					127,295
Operating Expenses
Advertising and promotion				11,428					9,572					32,385					28,375
General and administrative				8,311					6,209					25,647					24,039
Depreciation and amortization				2,760					2,753					8,273					8,260
Total operating expenses				22,499					18,534					66,305					60,674
Operating income				19,962					22,905					61,677					66,621
Other (income) expense
Interest income				(14	)				(164	)				(143	)				(524	)
Interest expense				7,065					9,490					22,656					29,132
Total other (income) expense				7,051					9,326					22,513					28,608
Income before income taxes				12,911					13,579					39,164					38,013
Provision for income taxes				4,893					5,160					14,843					14,445
Net income			$	8,018				$	8,419				$	24,321				$	23,568
Basic earnings per share			$	0.16				$	0.17				$	0.49				$	0.47
Diluted earnings per share			$	0.16				$	0.17				$	0.49				$	0.47
Weighted average shares outstanding:
Basic				49,960					49,799					49,921					49,744
Diluted				50,040					50,035					50,038					50,040

Prestige Brands Holdings, Inc.
Consolidated Balance Sheets
(Unaudited)
(In thousands)
Assets		December 31, 2008					March 31, 2008
Current assets
Cash and cash equivalents		$	27,934				$	6,078
Accounts receivable			34,631					44,219
Inventories			28,751					29,696
Deferred income tax assets			3,515					3,066
Prepaid expenses and other current assets			2,843					2,316
Total current assets			97,674					85,375
Property and equipment			1,437					1,433
Goodwill			309,879					308,915
Intangible assets			638,803					646,683
Other long-term assets			5,139					6,750
Total Assets		$	1,052,932				$	1,049,156
Liabilities and Stockholders' Equity
Current liabilities
Accounts payable		$	18,393				$	20,539
Accrued interest payable			2,455					5,772
Other accrued liabilities			13,207					8,030
Current portion of long-term debt			3,550					3,550
Total current liabilities			37,605					37,891
Long-term debt			380,788					407,675
Other long-term liabilities			--					2,377
Deferred income tax liabilities			129,575					122,140
Total Liabilities			547,968					570,083
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 - 50,060 shares			501					501
Additional paid-in capital			382,612					380,364
Treasury stock, at cost - 124 shares and 59 shares at December 31 and March 31, 2008, respectively			(63	)				(47	)
Accumulated other comprehensive income (loss)			(1,661	)				(999	)
Retained earnings			123,575					99,254
Total stockholders' equity			504,964					479,073
Total Liabilities and Stockholders' Equity		$	1,052,932				$	1,049,156

Prestige Brands Holdings, Inc.
Consolidated Statements of Cash Flows
(Unaudited)
			Nine Months Ended December 31
(In thousands)			2008					2007
Operating Activities
Net income			$	24,321				$	23,568
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization				8,273					8,260
Deferred income taxes				7,393					7,366
Amortization of deferred financing costs				1,696					2,283
Stock-based compensation				2,248					758
Changes in operating assets and liabilities
Accounts receivable				9,588					(3,810	)
Inventories				945					(486	)
Prepaid expenses and other current assets				(527	)				(66	)
Accounts payable				(2,450	)				(795	)
Accrued liabilities				1,860					(1,772	)
Net cash provided by operating activities				53,347					35,306
Investing Activities
Purchases of equipment				(397	)				(364	)
Business acquisition purchase price adjustments				(4,191	)				(16	)
Net cash used for investing activities				(4,588	)				(380	)
Financing Activities
Repayment of long-term debt				(26,887	)				(37,125	)
Purchase of common stock for treasury				(16	)				(5	)
Net cash used for financing activities				(26,903	)				(37,130	)
Increase (Decrease) in cash				21,856					(2,204	)
Cash - beginning of period				6,078					13,758
Cash - end of period			$	27,934				$	11,554
Interest paid			$	24,276				$	29,828
Income taxes paid			$	7,251				$	6,911

Prestige Brands Holdings, Inc.
Consolidating Statements of Operations
(Unaudited)
			Three Months Ended December 31, 2008
			Over-the-Counter				Household				Personal
			Healthcare				Cleaning				Care				Consolidated
Net sales			$	47,526			$	27,586			$	4,545			$	79,657
Other revenues				69				552				--				621
Total revenues				47,595				28,138				4,545				80,278
Cost of sales				16,892				18,253				2,672				37,817
Gross profit				30,703				9,885				1,873				42,461
Advertising and promotion				9,459				1,794				175				11,428
Contribution margin			$	21,244			$	8,091			$	1,698				31,033
Other operating expenses																11,071
Operating income																19,962
Other (income) expense																7,051
Provision for income taxes																4,893
Net income															$	8,018

			Nine Months Ended December 31, 2008
			Over-the-Counter				Household				Personal
			Healthcare				Cleaning				Care				Consolidated
Net sales			$	137,090			$	87,472			$	15,380			$	239,942
Other revenues				93				1,828				--				1,921
Total revenues				137,183				89,300				15,380				241,863
Cost of sales				47,667				57,113				9,101				113,881
Gross profit				89,516				32,187				6,279				127,982
Advertising and promotion				25,150				6,595				640				32,385
Contribution margin			$	64,366			$	25,592			$	5,639				95,597
Other operating expenses																33,920
Operating income																61,677
Other (income) expense																22,513
Provision for income taxes																14,843
Net income															$	24,321

Prestige Brands Holdings, Inc.
Consolidating Statements of Operations
(Unaudited)
			Three Months Ended December 31, 2007
			Over-the-Counter				Household				Personal
			Healthcare				Cleaning				Care				Consolidated
Net sales			$	45,015			$	29,568			$	5,061			$	79,644
Other revenues				51				527				--				578
Total revenues				45,066				30,095				5,061				80,222
Cost of sales				16,994				18,332				3,457				38,783
Gross profit				28,072				11,763				1,604				41,439
Advertising and promotion				7,045				2,271				256				9,572
Contribution margin			$	21,027			$	9,492			$	1,348				31,867
Other operating expenses																8,962
Operating income																22,905
Other (income) expense																9,326
Provision for income taxes																5,160
Net income															$	8,419

			Nine Months Ended December 31, 2007
			Over-the-Counter				Household				Personal
			Healthcare				Cleaning				Care				Consolidated
Net sales			$	137,444			$	89,838			$	17,243			$	244,525
Other revenues				51				1,566				28				1,645
Total revenues				137,495				91,404				17,271				246,170
Cost of sales				52,068				56,312				10,495				118,875
Gross profit				85,427				35,092				6,776				127,295
Advertising and promotion				21,080				6,474				821				28,375
Contribution margin			$	64,347			$	28,618			$	5,955				98,920
Other operating expenses																32,299
Operating income																66,621
Other (income) expense																28,608
Provision for income taxes																14,445
Net income															$	23,568

SOURCE: Prestige Brands Holdings, Inc.

Prestige Brands Holdings, Inc.
Dean Siegal, 914-524-6819