Q3 Earnings per Share From Continuing Operations $0.21 vs. $0.15 Last Year; Revenues Slightly DownIRVINGTON, N.Y., Feb 05, 2010 (BUSINESS WIRE) -- Prestige Brands Holdings, Inc. (NYSE:PBH) today announced results for the third fiscal quarter and nine months ending December 31, 2009.

Third Quarter

Net revenues from continuing operations for the third fiscal quarter ended December 31, 2009 were $75.4 million, $2.6 million or 3% below last year's results of $78.0 million. Revenues of the divested Denorex(R), Prell(R) and Zincon(R) shampoo brands in October, 2009, are reflected in discontinued operations for both the current year and the prior year comparable period.

Operating income for the third fiscal quarter was $23.7 million, $4.2 million or 22% greater than last year's operating income of $19.5 million. The increase in operating income resulted from decreases in advertising and promotional (A&P) expenditures when compared to the higher levels during the prior year comparable period that were related to last year's introductory spending levels to support Allergen Block products, and general and administrative (G&A) expenses. The reduction in G&A expense when compared to the prior year comparable period was primarily due to decreased legal, salary expenses and currency valuation expenses.

Net income from continuing operations for the third quarter ended December 31, 2009 was $10.3 million, $2.6 million or 34% greater than last year's net income from continuing operations of $7.7 million. Earnings per share from continuing operations were $0.21 compared to $0.15 in the prior year comparable period.

Commenting on the results of the quarter, Matthew Mannelly, President and CEO said, "We are pleased with our improved profitability and continue to work to drive revenue in this challenging economy. We are increasing our focus on supporting our core brands. This quarter, we are particularly pleased with the performance on our core brands, Chloraseptic(R), Little Remedies(R), Clear Eyes(R) and New-Skin(R)," he said.

Results by Segment

Over-The-Counter (OTC) Healthcare Products

Net revenues for the OTC segment in the fiscal third quarter were $46.2 million, $1.4 million or 3% below the prior year comparable period. Increases in sales of the Chloraseptic(R), Clear Eyes(R) and Little Remedies(R) brands were offset by declines in the two Allergen Block products and the Murine(R) Ear line.

Household Products

Net revenues for the household products segment in the third fiscal quarter were $27.3 million, $900 thousand, or 3% less than last year. Sales increases on the Spic and Span(R) and Chore Boy(R) lines were offset by a decline for Comet(R).

Personal Care Products

From this quarter forward, the results of this segment will exclude sales from the three shampoo brands divested in October, 2009, which are now reflected in discontinued operations. Net revenues from continuing operations for this segment were $2.0 million, $200 thousand or 10% below the prior year comparable period. The decline was primarily due to decreased sales of Cutex(R).

Year-To-Date Results

For the nine month period ending December 31, 2009, total revenues from continuing operations were $230.6 million, 2% lower than the prior period results of $234.5 million. Operating income from continuing operations of $63.5 million was 6% greater than the prior year comparable results of $60.0 million, largely as a result of reduced advertising and promotion expenses when compared with the prior year period. Net income from continuing operations for the nine month period was $28.0 million, an increase of $4.7 million over the prior year comparable period's results of $23.3 million.

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 $10.4 million, compared to $16.4 million in the prior year comparable quarter. The decrease in free cash flow is primarily a result of an increase in working capital partially offset by an increase in deferred income taxes. Free cash flow is comprised of operating cash flow of $10.6 million less capital expenditures of $170,000. This compares to the prior year comparable quarter's operating cash flow of $16.7 million, less capital expenditures of $288,000. The free cash flow generated during the quarter ended December 31, 2009 combined with the funds generated from the divestiture of the three shampoo brands during the quarter allowed us to pay down $19.0 million on our term loan during the quarter. At December 31, 2009, total debt was reduced to $319.3 million.

Conference Call

The Company will host a conference call to review its third quarter fiscal 2010 results on Friday, February 5, 2010 at 8:30am (EST). The toll free dial-in number is 866-277-1181. International callers may dial 617-597-5358. The conference pass code 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 only is 65721192.

About Prestige Brands Holdings, Inc.

Located in Irvington, NY, Prestige Brands Holdings, Inc. is a marketer and distributor of brand name over-the-counter healthcare products, household products and personal care products sold throughout the U.S., Canada, and certain international markets. Key brands include Chloraseptic(R) sore throat treatment, Compound W(R) wart remover, 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 cleaners, 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 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 share data)		2009				2008				2009				2008
Revenues
Net sales		$	74,997			$	77,345			$	229,130			$	232,582
Other revenues			451				621				1,511				1,921
Total revenues			75,448				77,966				230,641				234,503
Cost of Sales
Cost of sales			35,641				36,480				108,670				109,789
Gross profit			39,807				41,486				121,971				124,714
Operating Expenses
Advertising and promotion			6,099				11,349				24,645				32,129
General and administrative			7,411				8,311				26,088				25,647
Depreciation and amortization			2,596				2,311				7,781				6,926
Total operating expenses			16,106				21,971				58,514				64,702
Operating income			23,701				19,515				63,457				60,012
Other (income) expense
Interest income			-				(14	)			-				(143	)
Interest expense			5,558				7,065				16,853				22,656
Total other expense			5,558				7,051				16,853				22,513
Income from continuing operations before income taxes			18,143				12,464				46,604				37,499
Provision for income taxes			7,807				4,724				18,594				14,212
Income from continuing operations			10,336				7,740				28,010				23,287
Discontinued Operations
Income from discontinued operations, net of income tax			87				278				661				1,034
Gain on sale of discontinued operations, net of income tax			157				-				157				-
Net income		$	10,580			$	8,018			$	28,828			$	24,321
Basic earnings per share:
Income from continuing operations		$	0.21			$	0.15			$	0.56			$	0.47
Net income		$	0.21			$	0.16			$	0.58			$	0.49
Diluted earnings per share:
Income from continuing operations		$	0.21			$	0.15			$	0.56			$	0.47
Net income		$	0.21			$	0.16			$	0.58			$	0.49
Weighted average shares outstanding:
Basic			50,030				49,960				50,008				49,921
Diluted			50,074				50,040				50,078				50,038

Prestige Brands Holdings, Inc. Consolidated Balance Sheets (Unaudited)
(In thousands) Assets		December 31, 2009				March 31, 2009
Current assets
Cash and cash equivalents		$	34,262			$	35,181
Accounts receivable			30,618				36,025
Inventories			34,092				25,939
Deferred income tax assets			5,045				4,022
Prepaid expenses and other current assets			2,022				1,358
Current assets of discontinued operations			-				1,038
Total current assets			106,039				103,563
Property and equipment			1,297				1,367
Goodwill			114,240				114,240
Intangible assets			561,828				569,137
Other long-term assets			3,170				4,602
Long-term assets of discontinued operations			-				8,472
Total Assets		$	786,574			$	801,381
Liabilities and Stockholders' Equity
Current liabilities
Accounts payable		$	16,904			$	15,898
Accrued interest payable			2,446				5,371
Other accrued liabilities			13,258				9,407
Current portion of long-term debt			3,550				3,550
Total current liabilities			36,158				34,226
Long-term debt			315,787				374,787
Deferred income tax liabilities			109,776				97,983
Total Liabilities			461,721				506,996
Commitments and Contingencies - Note 16
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 - 50,154 shares at December 31, 2009 and 50,060 shares at March 31, 2009			502				501
Additional paid-in capital			383,600				382,803
Treasury stock, at cost - 124 shares at December 31, 2009 and March 31, 2009			(63	)			(63	)
Accumulated other comprehensive loss			(492	)			(1,334	)
Accumulated deficit			(58,694	)			(87,522	)
Total Stockholders' Equity			324,853				294,385
Total Liabilities and Stockholders' Equity		$	786,574			$	801,381

Prestige Brands Holdings, Inc. Consolidated Statements of Cash Flows (Unaudited)
		Nine Months Ended December 31
(In thousands)		2009				2008
Operating Activities
Net income		$	28,828			$	24,321
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization			8,679				8,273
Gain on sale of discontinued operations			(253	)			-
Deferred income taxes			10,254				7,393
Amortization of deferred financing costs			1,432				1,696
Stock-based compensation			1,658				2,248
Changes in operating assets and liabilities
Accounts receivable			6,407				9,588
Inventories			(8,281	)			945
Inventories held for sale			-				-
Prepaid expenses and other current assets			(664	)			(527	)
Accounts payable			1,006				(2,450	)
Accrued liabilities			1,424				1,860
Net cash provided by operating activities			50,490				53,347
Investing Activities
Purchases of equipment			(402	)			(397	)
Proceeds from sale of discontinued operations			7,993				-
Business acquisition purchase price adjustments			-				(4,191	)
Net cash provided by (used for) investing activities			7,591				(4,588	)
Financing Activities
Repayment of long-term debt			(59,000	)			(26,887	)
Purchase of common stock for treasury			-				(16	)
Net cash used for financing activities			(59,000	)			(26,903	)
Increase (Decrease) in cash			(919	)			21,856
Cash - beginning of period			35,181				6,078
Cash - end of period		$	34,262			$	27,934
Interest paid		$	18,345			$	24,276
Income taxes paid		$	9,820			$	7,251

Prestige Brands Holdings, Inc. Notes to Consolidated Financial Statements
Business Segments
		Three Months Ended December 31, 2009
		Over-the-Counter Healthcare				Household Cleaning				Personal Care				Consolidated
(In thousands)
Net sales		$	46,160			$	26,828			$	2,009			$	74,997
Other revenues			9				437				5				451
Total revenues			46,169				27,265				2,014				75,448
Cost of sales			16,919				17,481				1,241				35,641
Gross profit			29,250				9,784				773				39,807
Advertising and promotion			5,146				877				76				6,099
Contribution margin		$	24,104			$	8,907			$	697				33,708
Other operating expenses															10,007
Operating income															23,701
Other expense															5,558
Provision for income taxes															7,807
Income from continuing operations															10,336
Income from discontinued operations, net of income tax															87
Gain on sale of assets, net of income tax															157
Net income														$	10,580

		Nine Months Ended December 31, 2009
		Over-the-Counter Healthcare				Household Cleaning				Personal Care				Consolidated
(In thousands)
Net sales		$	137,800			$	82,271			$	9,059			$	229,130
Other revenues			29				1,454				28				1,511
Total revenues			137,829				83,725				9,087				230,641
Cost of sales			49,664				53,765				5,241				108,670
Gross profit			88,165				29,960				3,846				121,971
Advertising and promotion			19,264				5,080				301				24,645
Contribution margin		$	68,901			$	24,880			$	3,545				97,326
Other operating expenses															33,869
Operating income															63,457
Other expense															16,853
Provision for income taxes															18,594
Income from continuing operations															28,010
Income from discontinued operations, net of income tax															661
Gain on sale of assets, net of income tax															157
Net income														$	28,828

		Three Months Ended December 31, 2008
		Over-the-Counter Healthcare				Household Cleaning				Personal Care				Consolidated
(In thousands)
Net sales		$	47,526			$	27,586			$	2,233			$	77,345
Other revenues			69				552				-				621
Total revenues			47,595				28,138				2,233				77,966
Cost of sales			16,892				18,253				1,335				36,480
Gross profit			30,703				9,885				898				41,486
Advertising and promotion			9,459				1,794				96				11,349
Contribution margin		$	21,244			$	8,091			$	802				30,137
Other operating expenses															10,622
Operating income															19,515
Other expense															7,051
Provision for income taxes															4,724
Income from continuing operations															7,740
Income from discontinued operations, net of income tax															278
Net income														$	8,018

		Nine Months Ended December 31, 2008
		Over-the-Counter Healthcare				Household Cleaning				Personal Care				Consolidated
(In thousands)
Net sales		$	137,090			$	87,472			$	8,020			$	232,582
Other revenues			93				1,828				-				1,921
Total revenues			137,183				89,300				8,020				234,503
Cost of sales			47,667				57,113				5,009				109,789
Gross profit			89,516				32,187				3,011				124,714
Advertising and promotion			25,150				6,595				384				32,129
Contribution margin		$	64,366			$	25,592			$	2,627				92,585
Other operating expenses															32,573
Operating income															60,012
Other expense															22,513
Provision for income taxes															14,212
Income from continuing operations															23,287
Income from discontinued operations, net of income tax															1,034
Net income														$	24,321

SOURCE: Prestige Brands Holdings, Inc.

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