Investor Day Slated for May 22nd

TARRYTOWN, N.Y.--(BUSINESS WIRE)--May. 16, 2013-- Prestige Brands Holdings, Inc. (NYSE-PBH) today announced record results for the fourth quarter and the fiscal year ended March 31, 2013, driven by strong growth in both the legacy and acquired core brands in the Company's Over-the-Counter Healthcare (OTC) segment.

Revenues for the fourth fiscal quarter were $154.5 million, an increase of $20.5 million, or 15.3%, above the prior year comparable quarter's revenues of $134.0 million. The revenue increase was primarily due to the growth of the Company's 14 core OTC brands which increased 9.3% over the prior year comparable period. The prior year comparable period results include revenues from two months of ownership of 15 of the 17 brands acquired from GSK on January 31, 2012. The remaining two brands closed on March 30, 2012.

In addition to financial results reported in accordance with generally accepted accounting principles (GAAP), we have provided certain non-GAAP financial information in this release to aid investors in understanding the Company's performance. Each non-GAAP financial measure is defined and reconciled to its most closely related GAAP financial measure in the “About Non-GAAP Financial Measures” section at the end of this earnings release.

Operating income for the fourth fiscal quarter was $50.2 million, an increase of $27.6 million, or 122%, over the prior year comparable quarter's operating income of $22.6 million. The prior year comparable period was impacted by $15.3 million of costs associated primarily with the GSK brands acquisition and an unsolicited proposal. Excluding these charges, operating income for the fourth quarter of fiscal 2013 would have increased 33%.

In the fourth fiscal quarter, the Company's diluted earnings per share were $0.37 compared to $0.00 in the prior year comparable period. The fiscal fourth quarter includes a deferred tax benefit and other items of $0.01 per share. Excluding this, fourth quarter earnings per share would have been $0.36, an increase of 38.5% over the prior year adjusted fourth quarter earnings per share of $0.26. The prior year fourth quarter was impacted by the costs noted above.

Reported gross profit for the fourth fiscal quarter was $88.1 million, 29% higher than the comparable quarter's gross profit of $68.5 million. The prior year's fourth quarter results included GSK brand acquisition and transition-related costs of $1.8 million. Excluding these costs, gross profit would have increased 25%. Gross margin was 57.0% in the fourth quarter of fiscal 2013 compared to 51.1% in the prior year comparable period, or adjusted gross margin of 52.5% excluding the charges noted above. The year-over-year improvement in gross margin is primarily a result of the higher proportion of revenue derived from the higher margin OTC segment.

Revenues for the OTC Healthcare segment were $133.8 million, 22% higher than the prior year's fourth quarter revenues of $109.7 million. The increase in revenue in this segment continues to be driven by consumption gains in the Company's core OTC brands, resulting from increased investment in advertising and promotion (“A&P”) support behind them. Revenues for the Household Cleaning segment, which represents less than 15% of overall Company revenues, were $20.7 million, a decrease of 14.5% over the prior year's fourth quarter results of $24.3 million

Fiscal Year 2013

Revenues for fiscal 2013 were $623.6 million, an increase of $182.5 million or 41.4% over the prior year's revenues of $441.1 million. The increase is due primarily to the growth of revenues of the Company's core OTC brands, which grew 5.9% year-over-year, and a full year of ownership of the acquired GSK brands. In the prior year, the GSK brands contributed revenues for only the final two months of the fiscal year.

Reported diluted earnings per share for fiscal 2013 were $1.27, or 74.0% higher than $0.73 reported in the prior fiscal year. Adjusted earnings per share for the fiscal year were $1.50, a 52% increase over adjusted earnings per share of $0.99 in the prior year. Adjusted earnings per share for fiscal 2013 and fiscal 2012 exclude acquisition and transition-related costs, unsolicited proposal costs, and other adjustments, net of applicable taxes.

The Company continued its investment in Advertising and Promotion (“A&P”) during fiscal 2013 in support of its core OTC brands. A&P for the fiscal year was $90.6 million, 59% higher than the prior year spend of $57.1 million. A&P as a percent of revenue was 14.5% for fiscal 2013 compared to 13.0% in the prior year.

Commentary

“We are very pleased with the excellent growth shown in revenue and earnings per share for both the fourth quarter and fiscal year ended March 31, 2013. These results reflect the successful integration of the acquired GSK brands and meaningful growth in our core OTC brands,” said Matthew M. Mannelly, CEO. “Revenues for our core OTC brands grew 9.3% in the fourth quarter and approximately 6% for the fiscal year, significantly ahead of category growth for both periods. Our increased investment in brand-building A&P was a key stimulus for these record results,” he said.

“Our industry-leading and consistent cash flow from operations combined with a strengthened balance sheet helped us de-lever substantially in both the fourth quarter and for the fiscal year,” Mr. Mannelly continued. “Our net debt was reduced by approximately $154 million in the fiscal year, and our leverage ratio fell by one full point since the acquisition of the GSK brands a year ago. Rapid pay-down of debt enables us to continue to be active and disciplined in M&A. This approach has resulted in our successful track record of integrating, innovating and growing acquired brands.”

“Our strategies are in place and we are fully prepared to build on the success of fiscal 2013. As the largest independent OTC products company in the U.S., we are confident in our ability to continue to build brands, innovate within our portfolio, and invest appropriately for future value creation,” he said.

Free Cash Flow and Debt Reduction

The Company's record free cash flow (“FCF”) for the fourth fiscal quarter ended March 31, 2013 was $35.4 million, an increase of $16.2 million over the prior year comparable period's free cash flow of $19.2 million. For the fiscal year ended March 31, 2013, free cash flow totaled $127.3 million compared to $66.8 million in the prior year. FCF for the prior year comparable period was impacted by $15.1 million of working capital investments associated with the acquisition of the GSK brands, and other costs, net of related tax effects. On a per share basis, free cash flow for the fiscal fourth quarter and full fiscal year ended March 31, 2013 translates to $0.68 per share and $2.48 per share, respectively, compared to $0.38 per share and $1.32 per share for the fourth quarter and full fiscal year ended March 31, 2012, respectively.

The Company's net debt at March 31, 2013 was $962.3 million, reflecting a reduction of a total of $34.7 million during the fourth quarter. At March 31, 2013, the Company's covenant-defined leverage ratio was approximately 4.25x, down from approximately 5.25x at the time of the closing on the acquisition of the GSK brands on January 31, 2012.

Q4 Conference Call & Accompanying Slide Presentation

The Company will host a conference call to review its fourth quarter results on May 16, 2013 at 8:30 am EDT. The toll-free dial-in numbers are 866-318-8613 within North America and 617-399-5132 outside of North America. The conference pass code is "prestige". The Company will provide a live Internet webcast, a slide presentation to accompany the call, as well as an archived replay, all of which can be accessed from the Investors page of the Company's website at http://prestigebrands.com. The slide presentation can be accessed just before the call from the Investors page of the website by clicking on Events and Presentations. 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 pass code is 69473606.

Investor Day is Wednesday, May 22^nd

The Company will host its first Investor Day on Wednesday, May 22nd beginning at 10:30am EST. CEO Matthew Mannelly and other members of senior management will present an overview of the Company's operational and financial strategy and highlight new advertising and marketing initiatives. The Company will provide a live Internet webcast, which can be accessed from the Investor Relations page of the Company's website at http://prestigebrands.com. Choose the “Click here for webcast” hyperlink and register for access. A replay of the full event will be available via the same URL three hours after the event. Visit the “News and Events” section of the Company's website for details of the events.

About Prestige Brands Holdings, Inc.

The Company markets and distributes brand name over-the-counter and household cleaning products throughout the U.S. and Canada, and in certain international markets. Core brands include Chloraseptic® sore throat treatments, Clear Eyes® eye care products, Compound W® wart treatments, The Doctor's® NightGuard® dental protector, the Little Remedies® and PediaCare® lines of pediatric over-the-counter products, Efferdent® denture care products, Luden's® throat drops, Dramamine® motion sickness treatment, BC® and Goody's® pain relievers, Beano® gas prevention, Debrox® earwax remover, and Gaviscon® antacid in Canada. Visit the Company's website at www.prestigebrands.com.

Note Regarding Forward-Looking Statements

This news release contains "forward-looking statements" within the meaning of the federal securities laws 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 our ability to build brands, innovate our product portfolio, invest to create value, and our acquisition capacity. 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, including the impact of our advertising and promotional initiatives, competition in our industry, and the success of our new product introductions and integration of newly acquired products. A discussion of other factors that could cause results to vary is included in the Company's Annual Report on Form 10-K for the year ended March 31, 2012, Quarterly Report on Form 10-Q for the quarter ended December 31, 2012, and other periodic reports filed with the Securities and Exchange Commission.

About Non-GAAP Financial Measures

We define Non-GAAP EBITDA as earnings before interest expense (income), income taxes, depreciation and amortization, income or loss from discontinued operations or the sale thereof and Non-GAAP Adjusted EBITDA as earnings before interest expense (income), income taxes, depreciation and amortization, income or loss from discontinued operations and the sale thereof, gain on settlement, loss on extinguishment of debt, certain other legal and professional fees, and acquisition-related costs. We define Non-GAAP Adjusted Gross Margin as Gross Profit before certain acquisition and integration-related costs. We define Non-GAAP Adjusted Operating Income as Operating Income minus certain other legal and professional fees, acquisition and other integration costs. We define Non-GAAP Adjusted Net Income as Net Income before gain on settlement, loss on extinguishment of debt, certain other legal and professional fees, acquisition and integration-related costs, income or loss from discontinued operations and sale thereof, the applicable tax impacts associated with these items and the tax impacts of state tax rate adjustments and other non-deductible items. Non-GAAP Adjusted EPS is calculated based on Non-GAAP Adjusted Net Income, divided by the weighted average number of common and potential common shares outstanding during the period. We define Non-GAAP Free Cash Flow as Net Cash provided by operating activities less cash paid for capital expenditures. Non-GAAP Free Cash Flow per Share is calculated based on Non-GAAP Free Cash Flow, divided by the weighted average number of common and potential common shares outstanding during the period. Non-GAAP EBITDA, Non-GAAP Adjusted EBITDA, Non-GAAP Adjusted Operating Income, Non-GAAP Adjusted Net Income, Non-GAAP Adjusted EPS, Non-GAAP Free Cash Flow and Non-GAAP Free Cash Flow per Share may not be comparable to similarly titled measures reported by other companies.

We are presenting Non-GAAP EBITDA, Non-GAAP Adjusted EBITDA, Non-GAAP Adjusted Gross Margin, Non-GAAP Adjusted Operating Income, Non-GAAP Adjusted Net Income, Non-GAAP Adjusted EPS, Non-GAAP Free Cash Flow and Non-GAAP Free Cash Flow per Share because they provide additional ways to view our operations, when considered with both our GAAP results and the reconciliation to net income and net cash provided by operating activities, respectively, which we believe provide a more complete understanding of our business than could be obtained absent this disclosure. Additionally, we believe that Free Cash Flow and Free Cash Flow per Share are commonly used measures of liquidity and are indicative of cash available for debt repayment and acquisitions. Each of Non-GAAP EBITDA, Non-GAAP Adjusted EBITDA, Non-GAAP Adjusted Gross Margin, Non-GAAP Adjusted Operating Income, Non-GAAP Adjusted Net Income, Non-GAAP Adjusted EPS, Non-GAAP Free Cash Flow and Non-GAAP Free Cash Flow per Share is presented solely as a supplemental disclosure because (i) we believe it is a useful tool for investors to assess the operating performance of the business without the effect of these items; (ii) we believe that investors will find this data useful in assessing our ability to pursue acquisitions or to service or incur indebtedness; and (iii) we use Non-GAAP EBITDA, Non-GAAP Adjusted EBITDA, Non-GAAP Adjusted Gross Margin, Non-GAAP Adjusted Operating Income, Non-GAAP Adjusted Net Income and Non-GAAP Adjusted EPS internally to evaluate the performance of our personnel and also as a benchmark to evaluate our operating performance or compare our performance to that of our competitors. The use of Non-GAAP EBITDA, Non-GAAP Adjusted EBITDA, Non-GAAP Adjusted Gross Margin, Non-GAAP Adjusted Operating Income, Non-GAAP Adjusted Net Income, Non-GAAP Adjusted EPS, Non-GAAP Free Cash Flow and Non-GAAP Free Cash Flow per Share has limitations, and you should not consider these measures in isolation from or as an alternative to GAAP measures such as Operating income, Net income, and Net cash flow provided by operating activities, or cash flow statement data prepared in accordance with GAAP, or as a measure of profitability or liquidity.

The following tables set forth the reconciliation of Non-GAAP EBITDA, Non-GAAP Adjusted EBITDA, Non-GAAP Adjusted Gross Margin, Non-GAAP Adjusted Operating Income, Non-GAAP Adjusted Net Income, Non-GAAP Adjusted EPS, Non-GAAP Free Cash Flow and Non-GAAP Free Cash Flow per Share, all of which are non-GAAP financial measures, to GAAP Gross Profit, GAAP Operating Income, GAAP Net Income, GAAP Diluted EPS and GAAP Net cash provided by operating activities, our most directly comparable financial measures presented in accordance with GAAP.

Source: Prestige Brands Holdings, Inc.

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