News Releases
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. This includes free cash flow, a non-GAAP financial measure indicative of cash available for debt repayment and acquisitions. 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.
The results include reported third fiscal quarter revenues of
Reported net income for the third fiscal quarter was
Reported net income for the first nine months of fiscal 2014 was
Reported revenues for the
Free Cash Flow and Debt
The Company's free cash flow (“FCF”) for the third fiscal quarter was
At
Commentary & Outlook
According to
Mr. Mannelly continued, “Moving forward, we will leverage the strength
of our business model which revolves around strong and consistent free
cash flow. We continue to expect free cash flow of approximately
Q3 Conference Call & Accompanying Slide Presentation
The Company will host a conference call to review its third quarter
results on
About
The Company markets and distributes brand name over-the-counter and
household cleaning products throughout the U.S. and
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
"will," "expect," 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
expected future operating results including earnings per share and free
cash flow, our strategy and focus, our intention to invest in our core
brands, development of innovative products, and aggressive and
disciplined M&A. 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, the strength of the cough/cold season, 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
Prestige Brands Holdings, Inc. |
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Consolidated Statements of Income and Comprehensive Income |
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(Unaudited) |
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Three Months Ended |
Nine Months Ended |
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(In thousands, except per share data) |
2013 | 2012 | 2013 | 2012 | ||||||||||||||||
Revenues | ||||||||||||||||||||
Net sales | $ | 145,054 | $ | 159,492 | $ | 454,159 | $ | 466,735 | ||||||||||||
Other revenues | 1,158 | 740 | 3,466 | 2,349 | ||||||||||||||||
Total revenues | 146,212 | 160,232 | 457,625 | 469,084 | ||||||||||||||||
Cost of Sales | ||||||||||||||||||||
Cost of sales (exclusive of depreciation shown below) | 64,403 | 75,235 | 197,614 | 209,938 | ||||||||||||||||
Gross profit | 81,809 | 84,997 | 260,011 | 259,146 | ||||||||||||||||
Operating Expenses | ||||||||||||||||||||
Advertising and promotion | 25,570 | 23,538 | 70,754 | 67,371 | ||||||||||||||||
General and administrative | 12,137 | 11,378 | 35,390 | 40,114 | ||||||||||||||||
Depreciation and amortization | 3,644 | 3,359 | 10,206 | 9,950 | ||||||||||||||||
Total operating expenses | 41,351 | 38,275 | 116,350 | 117,435 | ||||||||||||||||
Operating income | 40,458 | 46,722 | 143,661 | 141,711 | ||||||||||||||||
Other (income) expense | ||||||||||||||||||||
Interest income | (16 | ) | (4 | ) | (44 | ) | (9 | ) | ||||||||||||
Interest expense | 21,276 | 26,665 | 53,648 | 66,178 | ||||||||||||||||
Loss on extinguishment of debt | 15,012 | — | 15,012 | — | ||||||||||||||||
Total other expense | 36,272 | 26,661 | 68,616 | 66,169 | ||||||||||||||||
Income before income taxes | 4,186 | 20,061 | 75,045 | 75,542 | ||||||||||||||||
Provision for income taxes | 1,056 | 7,804 | 18,431 | 29,386 | ||||||||||||||||
Net income | $ | 3,130 | $ | 12,257 | $ | 56,614 | $ | 46,156 | ||||||||||||
Earnings per share: | ||||||||||||||||||||
Basic | $ | 0.06 | $ | 0.24 | $ | 1.10 | $ | 0.91 | ||||||||||||
Diluted | $ | 0.06 | $ | 0.24 | $ | 1.08 | $ | 0.90 | ||||||||||||
Weighted average shares outstanding: | ||||||||||||||||||||
Basic | 51,806 | 50,686 | 51,498 | 50,465 | ||||||||||||||||
Diluted | 52,445 | 51,523 | 52,236 | 51,285 | ||||||||||||||||
Comprehensive (loss) income, net of tax: | ||||||||||||||||||||
Currency translation adjustments | (2,694 | ) | (1 | ) | (1,571 | ) | 23 | |||||||||||||
Total other comprehensive (loss) income | (2,694 | ) | (1 | ) | (1,571 | ) | 23 | |||||||||||||
Comprehensive income | $ | 436 | $ | 12,256 | $ | 55,043 | $ | 46,179 | ||||||||||||
Prestige Brands Holdings, Inc. |
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Consolidated Balance Sheets |
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(Unaudited) |
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(In thousands) |
December 31, |
March 31, |
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Current assets | ||||||||||
Cash and cash equivalents | $ | 94,353 | $ | 15,670 | ||||||
Accounts receivable, net | 66,188 | 73,053 | ||||||||
Inventories | 64,798 | 60,201 | ||||||||
Deferred income tax assets | 6,836 | 6,349 | ||||||||
Prepaid expenses and other current assets | 12,326 | 8,900 | ||||||||
Total current assets | 244,501 | 164,173 | ||||||||
Property and equipment, net | 10,528 | 9,896 | ||||||||
Goodwill | 189,955 | 167,546 | ||||||||
Intangible assets, net | 1,395,755 | 1,373,240 | ||||||||
Other long-term assets | 24,107 | 24,944 | ||||||||
Total Assets | $ | 1,864,846 | $ | 1,739,799 | ||||||
Liabilities and Stockholders' Equity | ||||||||||
Current liabilities | ||||||||||
Current portion of long-term debt | $ | 48,290 | $ | — | ||||||
Accounts payable | 51,547 | 51,376 | ||||||||
Accrued interest payable | 10,781 | 13,894 | ||||||||
Other accrued liabilities | 23,445 | 31,398 | ||||||||
Total current liabilities | 134,063 | 96,668 | ||||||||
Long-term debt | ||||||||||
Principal amount | 985,000 | 978,000 | ||||||||
Less unamortized discount | (3,489 | ) | (7,100 | ) | ||||||
Long-term debt, net of unamortized discount | 981,511 | 970,900 | ||||||||
Deferred income tax liabilities | 205,036 | 194,288 | ||||||||
Other long-term liabilities | 302 | — | ||||||||
Total Liabilities | 1,320,912 | 1,261,856 | ||||||||
Stockholders' Equity | ||||||||||
Preferred stock - $0.01 par value | ||||||||||
Authorized - 5,000 shares | ||||||||||
Issued and outstanding - None | — | — | ||||||||
Preferred share rights | 283 | 283 | ||||||||
Common stock - $0.01 par value | ||||||||||
Authorized - 250,000 shares | ||||||||||
Issued - 51,961 shares at December 31, 2013 and 51,311 shares at March 31, 2013 | 520 | 513 | ||||||||
Additional paid-in capital | 412,910 | 401,691 | ||||||||
Treasury stock, at cost - 194 shares at December 31, 2013 and 181 shares March 31, 2013 | (965 | ) | (687 | ) | ||||||
Accumulated other comprehensive loss, net of tax | (1,675 | ) | (104 | ) | ||||||
Retained earnings | 132,861 | 76,247 | ||||||||
Total Stockholders' Equity | 543,934 | 477,943 | ||||||||
Total Liabilities and Stockholders' Equity | $ | 1,864,846 | $ | 1,739,799 | ||||||
Prestige Brands Holdings, Inc. |
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Consolidated Statements of Cash Flows |
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(Unaudited) |
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Nine Months Ended December 31, | ||||||||||
(In thousands) |
2013 | 2012 | ||||||||
Operating Activities | ||||||||||
Net income | $ | 56,614 | $ | 46,156 | ||||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||
Depreciation and amortization | 10,209 | 9,950 | ||||||||
Deferred income taxes | 10,261 | 15,979 | ||||||||
Amortization of deferred financing costs | 6,023 | 8,220 | ||||||||
Stock-based compensation costs | 3,763 | 2,965 | ||||||||
Loss on extinguishment of debt | 15,012 | — | ||||||||
Premium payment on 2010 Senior Notes | (12,768 | ) | — | |||||||
Amortization of debt discount | 3,115 | 3,892 | ||||||||
Lease termination costs | — | 975 | ||||||||
(Gain) loss on sale or disposal of equipment | (3 | ) | 51 | |||||||
Changes in operating assets and liabilities, net of effects of acquisitions | ||||||||||
Accounts receivable | 8,495 | (13,518 | ) | |||||||
Inventories | (2,262 | ) | (3,351 | ) | ||||||
Prepaid expenses and other current assets | (2,783 | ) | 5,801 | |||||||
Accounts payable | (1,285 | ) | 14,125 | |||||||
Accrued liabilities | (13,531 | ) | 9,631 | |||||||
Net cash provided by operating activities | 80,860 | 100,876 | ||||||||
Investing Activities | ||||||||||
Purchases of property and equipment | (2,658 | ) | (8,922 | ) | ||||||
Proceeds from sale of property and equipment | 3 | 15 | ||||||||
Proceeds from the sale of the Phazyme brand | — | 21,700 | ||||||||
Acquisition of brands from GSK purchase price adjustments | — | (226 | ) | |||||||
Acquisition of Care Pharmaceuticals, less cash acquired | (55,215 | ) | — | |||||||
Net cash (used in) provided by investing activities | (57,870 | ) | 12,567 | |||||||
Financing Activities | ||||||||||
Proceeds from issuance of 2013 Senior Notes | 400,000 | — | ||||||||
Repayment of 2010 Senior Notes | (201,710 | ) | — | |||||||
Repayments of long-term debt | (147,500 | ) | (167,500 | ) | ||||||
Repayments under revolving credit agreement | (45,500 | ) | (8,000 | ) | ||||||
Borrowings under revolving credit agreement | 50,000 | 48,000 | ||||||||
Payment of deferred financing costs | (6,933 | ) | — | |||||||
Proceeds from exercise of stock options | 5,738 | 5,460 | ||||||||
Excess tax benefits from share-based awards | 1,725 | — | ||||||||
Fair value of shares surrendered as payment of tax withholding | (278 | ) | — | |||||||
Net cash provided by (used in) financing activities | 55,542 | (122,040 | ) | |||||||
Effects of exchange rate changes on cash and cash equivalents | 151 | 13 | ||||||||
Increase (decrease) in cash and cash equivalents | 78,683 | (8,584 | ) | |||||||
Cash and cash equivalents - beginning of year | 15,670 | 19,015 | ||||||||
Cash and cash equivalents - end of year | $ | 94,353 | $ | 10,431 | ||||||
Interest paid | $ | 47,586 | $ | 54,149 | ||||||
Income taxes paid | $ | 9,761 | $ | 7,183 | ||||||
Prestige Brands Holdings, Inc. |
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Consolidated Statements of Income |
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Business Segments |
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(Unaudited) |
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Three Months Ended December 31, 2013 | Nine Months Ended December 31, 2013 | ||||||||||||||||||||||||||||
(In thousands) |
OTC |
Household |
Consolidated |
OTC |
Household |
Consolidated | |||||||||||||||||||||||
Net sales | $ | 125,448 | $ | 19,606 | $ | 145,054 | $ | 390,670 | $ | 63,489 | $ | 454,159 | |||||||||||||||||
Other revenues | 150 | 1,008 | 1,158 | 462 | 3,004 | 3,466 | |||||||||||||||||||||||
Total revenues | 125,598 | 20,614 | 146,212 | 391,132 | 66,493 | 457,625 | |||||||||||||||||||||||
Cost of sales | 49,042 | 15,361 | 64,403 | 149,378 | 48,236 | 197,614 | |||||||||||||||||||||||
Gross profit | 76,556 | 5,253 | 81,809 | 241,754 | 18,257 | 260,011 | |||||||||||||||||||||||
Advertising and promotion | 24,830 | 740 | 25,570 | 68,375 | 2,379 | 70,754 | |||||||||||||||||||||||
Contribution margin | $ | 51,726 | $ | 4,513 | 56,239 | $ | 173,379 | $ | 15,878 | 189,257 | |||||||||||||||||||
Other operating expenses | 15,781 | 45,596 | |||||||||||||||||||||||||||
Operating income | 40,458 | 143,661 | |||||||||||||||||||||||||||
Other expense | 36,272 | 68,616 | |||||||||||||||||||||||||||
Income before income taxes | 4,186 | 75,045 | |||||||||||||||||||||||||||
Provision for income taxes | 1,056 | 18,431 | |||||||||||||||||||||||||||
Net income | $ | 3,130 | $ | 56,614 | |||||||||||||||||||||||||
Three Months Ended December 31, 2012 | Nine Months Ended December 31, 2012 | ||||||||||||||||||||||||||||
(In thousands) |
OTC |
Household |
Consolidated |
OTC |
Household |
Consolidated | |||||||||||||||||||||||
Net sales | $ | 138,858 | $ | 20,634 | $ | 159,492 | $ | 402,633 | $ | 64,102 | $ | 466,735 | |||||||||||||||||
Other revenues | 175 | 565 | 740 | 520 | 1,829 | 2,349 | |||||||||||||||||||||||
Total revenues | 139,033 | 21,199 | 160,232 | 403,153 | 65,931 | 469,084 | |||||||||||||||||||||||
Cost of sales | 59,381 | 15,854 | 75,235 | 160,249 | 49,689 | 209,938 | |||||||||||||||||||||||
Gross profit | 79,652 | 5,345 | 84,997 | 242,904 | 16,242 | 259,146 | |||||||||||||||||||||||
Advertising and promotion | 22,410 | 1,128 | 23,538 | 62,309 | 5,062 | 67,371 | |||||||||||||||||||||||
Contribution margin | $ | 57,242 | $ | 4,217 | 61,459 | $ | 180,595 | $ | 11,180 | 191,775 | |||||||||||||||||||
Other operating expenses | 14,737 | 50,064 | |||||||||||||||||||||||||||
Operating income | 46,722 | 141,711 | |||||||||||||||||||||||||||
Other expense | 26,661 | 66,169 | |||||||||||||||||||||||||||
Income before income taxes | 20,061 | 75,542 | |||||||||||||||||||||||||||
Provision for income taxes | 7,804 | 29,386 | |||||||||||||||||||||||||||
Net income | $ | 12,257 | $ | 46,156 | |||||||||||||||||||||||||
About Non-GAAP Financial Measures
We define Non-GAAP Adjusted Total Revenues excluding additional transition sales costs associated with acquisitions. We define Non-GAAP Total Revenues excluding acquisitions and divestitures as Total Revenues excluding revenues associated with products acquired or divested in the periods presented. We define Non-GAAP Total Revenues excluding sales to mass channel customers Total Revenues excluding revenues for products sold to our mass channel customers. 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, accelerated amortization of debt discount and debt issue costs, 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 Operating Cash Flow as net cash provided by operating activities less premium payments to extinguish debt and accelerated interest payments due to debt refinancing. We define Non-GAAP Free Cash Flow as Net Cash provided by operating activities less premium payments to extinguish debt, accelerated interest payments due to debt refinancing and 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 Operating Cash Flow, 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 Adjusted Total Revenues, Non-GAAP Total Revenues excluding acquisitions and divestitures, Non-GAAP Total Revenues excluding sales to mass channel customers, 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 Operating Cash Flow, 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. Each of Non-GAAP Adjusted Total Revenues, Non-GAAP Total Revenues excluding acquisitions and divestitures, Non-GAAP Total Revenues excluding sales to mass channel customers, 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 Operating Cash Flow, 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 shareholder value; and (iii) we use Non-GAAP Adjusted Total Revenues, Non-GAAP Total Revenues excluding acquisitions and divestitures, Non-GAAP Total Revenues excluding sales to mass channel customers, 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 Adjusted Total Revenues, Non-GAAP Total Revenues excluding acquisitions and divestitures, Non-GAAP Total Revenues excluding sales to mass channel customers, 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 Operating Cash Flow, 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 Adjusted Total Revenues, Non-GAAP Total Revenues excluding acquisitions and divestitures, Non-GAAP Total Revenues excluding sales to mass channel customers, 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 Operating Cash Flow, 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.
Reconciliation of GAAP Total Revenues to Non-GAAP Total Revenues excluding acquisitions and divestitures: |
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Three Months Ended |
Nine Months Ended |
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2013 | 2012 | 2013 | 2012 | |||||||||||||||||
(In thousands) | ||||||||||||||||||||
GAAP Total Revenues | $ | 146,212 | $ | 160,232 | $ | 457,625 | $ | 469,084 | ||||||||||||
Adjustments: (1) |
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Care revenues | (5,069 | ) | — | (10,498 | ) | — | ||||||||||||||
Phazyme revenues | — | (524 | ) | — | (3,568 | ) | ||||||||||||||
Total adjustments | (5,069 | ) | (524 | ) | (10,498 | ) | (3,568 | ) | ||||||||||||
Non-GAAP Total Revenues excluding acquisitions and divestitures | $ | 141,143 | $ | 159,708 | $ | 447,127 | $ | 465,516 | ||||||||||||
(1) Revenue adjustments relate to our OTC Healthcare segment |
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Reconciliation of GAAP Total Revenues to Non-GAAP Total Revenues excluding sales to mass channel customers: |
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Three Months Ended |
% |
Three Months Ended |
% |
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2013 | 2012 | 2013 | 2012 | |||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||
GAAP Total Revenues | $ | 142,971 | $ | 146,997 | (2.7) | $ | 168,442 | $ | 161,855 | 4.1 | ||||||||||||||||
Adjustments: |
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Sales to mass channel customers | (38,081 | ) | (43,082 | ) | (43,430 | ) | (44,182 | ) | ||||||||||||||||||
Total adjustments | (38,081 | ) | (43,082 | ) | (43,430 | ) | (44,182 | ) | ||||||||||||||||||
Non-GAAP Total Revenues excluding sales to mass channel customers | $ | 104,890 | $ | 103,915 | 0.9 | $ | 125,012 | $ | 117,673 | 6.2 | ||||||||||||||||
Three Months Ended |
% |
Nine Months Ended |
% |
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2013 | 2012 | 2013 | 2012 | |||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||
GAAP Total Revenues | $ | 146,212 | $ | 160,232 | (8.7) | $ | 457,625 | $ | 469,084 | (2.4) | ||||||||||||||||
Adjustments: |
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Sales to mass channel customers | (36,627 | ) | (44,678 | ) | (118,138 | ) | (131,942 | ) | ||||||||||||||||||
Total adjustments | (36,627 | ) | (44,678 | ) | (118,138 | ) | (131,942 | ) | ||||||||||||||||||
Non-GAAP Total Revenues excluding sales to mass channel customers | $ | 109,586 | $ | 115,554 | (5.2) | $ | 339,488 | $ | 337,142 | 0.7 | ||||||||||||||||
Reconciliation of GAAP Total Revenues to Non-GAAP Adjusted Total Revenues and GAAP Gross Profit to Non-GAAP Adjusted Gross Margin: |
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Three Months Ended |
Nine Months Ended |
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2013 | 2012 | 2013 | 2012 | |||||||||||||||||
(In thousands) | ||||||||||||||||||||
GAAP Total Revenues | $ | 146,212 | $ | 160,232 | $ | 457,625 | $ | 469,084 | ||||||||||||
Adjustments: (1) |
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Additional sales costs associated with GSK | — | — | — | 411 | ||||||||||||||||
Total adjustments | — | — | — | 411 | ||||||||||||||||
Non-GAAP Adjusted Total Revenues | $ | 146,212 | $ | 160,232 | $ | 457,625 | $ | 469,495 | ||||||||||||
GAAP Gross Profit | $ | 81,809 | $ | 84,997 | $ | 260,011 | $ | 259,146 | ||||||||||||
Adjustments: |
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Additional sales costs associated with GSK | — | — | — | 411 | ||||||||||||||||
Inventory step-up charge associated with acquisitions | — | — | 577 | 23 | ||||||||||||||||
Care acquisition related inventory costs | — | — | 407 | — | ||||||||||||||||
Additional product testing costs associated with GSK | — | — | — | 220 | ||||||||||||||||
Additional supplier transaction costs associated with GSK | — | 3,765 | — | 5,426 | ||||||||||||||||
Total adjustments | — | 3,765 | 984 | 6,080 | ||||||||||||||||
Non-GAAP Adjusted Gross Margin | $ | 81,809 | $ | 88,762 | $ | 260,995 | $ | 265,226 | ||||||||||||
Non-GAAP Adjusted Gross Margin % | 56.0 | % | 55.4 | % | 57.0 | % | 56.5 | % | ||||||||||||
(1) Revenue adjustments relate to our OTC Healthcare segment |
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Reconciliation of GAAP Operating Income to Non-GAAP Adjusted Operating Income: |
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Three Months Ended |
Nine Months Ended |
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2013 | 2012 | 2013 | 2012 | ||||||||||||||||
(In thousands) | |||||||||||||||||||
GAAP Operating Income | $ | 40,458 | $ | 46,722 | $ | 143,661 | $ | 141,711 | |||||||||||
Adjustments: |
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Additional sales costs associated with GSK (1) | — | — | — | 411 | |||||||||||||||
Inventory step-up charge associated with acquisitions (1) | — | — | 577 | 23 | |||||||||||||||
Care acquisition related inventory costs (1) | — | — | 407 | — | |||||||||||||||
Additional product testing costs associated with GSK (1) | — | — | — | 220 | |||||||||||||||
Additional supplier transition costs associated with GSK (1) | — | 3,765 | — | 5,426 | |||||||||||||||
Legal and professional fees associated with acquisitions (2) | — | — | 668 | 98 | |||||||||||||||
Unsolicited proposal costs (2) | — | — | — | 534 | |||||||||||||||
Transition and integration costs associated with GSK (2) | — | — | — | 5,811 | |||||||||||||||
Total adjustments | — | 3,765 | 1,652 | 12,523 | |||||||||||||||
Non-GAAP Adjusted Operating Income | $ | 40,458 | $ | 50,487 | $ | 145,313 | $ | 154,234 | |||||||||||
(1) Adjustments relate to our OTC Healthcare segment |
|||||||||||||||||||
(2) Adjustments relate to G&A expenses |
|||||||||||||||||||
Reconciliation of GAAP Net Income to Non-GAAP Adjusted EBITDA: |
|||||||||||||||||||
Three Months Ended |
Nine Months Ended |
||||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||||
(In thousands) | |||||||||||||||||||
GAAP Net Income | $ | 3,130 | $ | 12,257 | $ | 56,614 | $ | 46,156 | |||||||||||
Interest expense, net | 21,260 | 26,661 | 53,604 | 66,169 | |||||||||||||||
Income tax provision | 1,056 | 7,804 | 18,431 | 29,386 | |||||||||||||||
Depreciation and amortization | 3,644 | 3,359 | 10,206 | 9,950 | |||||||||||||||
Non-GAAP EBITDA: | 29,090 | 50,081 | 138,855 | 151,661 | |||||||||||||||
Adjustments: |
|||||||||||||||||||
Additional sales costs associated with GSK (1) | — | — | — | 411 | |||||||||||||||
Inventory step-up charge associated with acquisitions (1) | — | — | 577 | 23 | |||||||||||||||
Care acquisition related inventory costs (1) | — | — | 407 | — | |||||||||||||||
Additional product testing costs associated with GSK (1) | — | — | — | 220 | |||||||||||||||
Additional supplier transaction costs associated with GSK (1) | — | 3,765 | — | 5,426 | |||||||||||||||
Legal and professional fees associated with acquisitions (2) | — | — | 668 | 98 | |||||||||||||||
Unsolicited proposal costs (2) | — | — | — | 534 | |||||||||||||||
Transition and integration costs associated with GSK(2) | — | — | — | 5,811 | |||||||||||||||
Loss on extinguishment of debt | 15,012 | — | 15,012 | — | |||||||||||||||
Total adjustments | 15,012 | 3,765 | 16,664 | 12,523 | |||||||||||||||
Non-GAAP Adjusted EBITDA | $ | 44,102 | $ | 53,846 | $ | 155,519 | $ | 164,184 | |||||||||||
(1) Adjustments relate to our OTC Healthcare segment |
|||||||||||||||||||
(2) Adjustments relate to G&A expenses |
|||||||||||||||||||
Reconciliation of GAAP Net Income to Non-GAAP Adjusted Net Income and related Adjusted Earnings Per Share: |
|||||||||||||||||||||||||||||||||||||||||
Three Months Ended December 31, | Nine Months Ended December 31, | ||||||||||||||||||||||||||||||||||||||||
2013 |
2013 |
2012 |
2012 |
2013 |
2013 |
2012 |
2012 |
||||||||||||||||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||||||||||||||||||
GAAP Net Income | $ | 3,130 | $ | 0.06 | $ | 12,257 | $ | 0.24 | $ | 56,614 | $ | 1.08 | $ | 46,156 | $ | 0.90 | |||||||||||||||||||||||||
Adjustments: |
|||||||||||||||||||||||||||||||||||||||||
Additional sales costs associated with GSK (1) | — | — | — | — | — | — | 411 | 0.01 | |||||||||||||||||||||||||||||||||
Inventory step-up charge associated with acquisitions (1) | — | — | — | — | 577 | 0.01 | 23 | — | |||||||||||||||||||||||||||||||||
Care acquisition related inventory costs (1) | — | — | — | — | 407 | 0.01 | — | — | |||||||||||||||||||||||||||||||||
Additional product testing costs associated with GSK (1) | — | — | — | — | — | — | 220 | — | |||||||||||||||||||||||||||||||||
Additional supplier transition costs associated with GSK (1) | — | — | 3,765 | 0.07 | — | — | 5,426 | 0.11 | |||||||||||||||||||||||||||||||||
Legal and professional fees associated with acquisitions (2) | — | — | — | — | 668 | 0.01 | 13,907 | 98 | — | ||||||||||||||||||||||||||||||||
Unsolicited proposal costs (2) | — | — | — | — | — | — | 534 | 0.01 | |||||||||||||||||||||||||||||||||
Transition and integration costs associated with GSK (2) | — | — | — | — | — | — | 5,811 | 0.11 | |||||||||||||||||||||||||||||||||
Accelerated amortization of debt discount and debt issue costs | 5,112 | 0.10 | 7,746 | 0.15 | 5,112 | 0.10 | 7,746 | 0.15 | |||||||||||||||||||||||||||||||||
Loss on extinguishment of debt | 15,012 | 0.29 | — | — | 15,012 | 0.29 | — | — | |||||||||||||||||||||||||||||||||
Tax impact of adjustments | (7,285 | ) | (0.14 | ) | (4,513 | ) | (0.09 | ) | (7,641 | ) | (0.15 | ) | (7,920 | ) | (0.15 | ) | |||||||||||||||||||||||||
Impact of state tax adjustments | (380 | ) | (0.01 | ) | — | — | (9,465 | ) | (0.18 | ) | — | — | |||||||||||||||||||||||||||||
Total adjustments | 12,459 | 0.24 | 6,998 | 0.13 | 4,670 | 0.09 | 12,349 | 0.24 | |||||||||||||||||||||||||||||||||
Non-GAAP Adjusted Net Income and Adjusted EPS | $ | 15,589 | $ | 0.30 | $ | 19,255 | $ | 0.37 | $ | 61,284 | $ | 1.17 | $ | 58,505 | $ | 1.14 | |||||||||||||||||||||||||
(1) Adjustments relate to our OTC Healthcare segment |
|||||||||||||||||||||||||||||||||||||||||
(2) Adjustments relate to G&A expenses |
|||||||||||||||||||||||||||||||||||||||||
Reconciliation of GAAP Net Cash Provided by Operating Activities to Non-GAAP Free Cash Flow: |
||||||||||||||||||||
Three Months Ended |
Nine Months Ended |
|||||||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||||||
(In thousands) | ||||||||||||||||||||
GAAP Net cash provided by operating activities | $ | 25,262 | $ | 40,502 | $ | 80,860 | $ | 100,876 | ||||||||||||
Premium payment on 2010 Senior Notes | 12,768 | — | 12,768 | — | ||||||||||||||||
Accelerated interest payments due to debt refinancing | 3,513 | — | 3,513 | — | ||||||||||||||||
Non-GAAP Operating Cash Flow | 41,543 | 40,502 | 97,141 | 100,876 | ||||||||||||||||
Additions to property and equipment for cash | (339 | ) | (3,656 | ) | (2,658 | ) | (8,922 | ) | ||||||||||||
Non-GAAP Free Cash Flow | $ | 41,204 | $ | 36,846 | $ | 94,483 | $ | 91,954 | ||||||||||||
Non-GAAP Free Cash Flow per Share | $ | 0.78 | $ | 0.72 | $ | 1.81 | $ | 1.79 | ||||||||||||
Reconciliation of GAAP Net Income and EPS to Non-GAAP Free Cash Flow and Non-GAAP Free Cash Flow per Share: |
||||||||||||||||||||||||||||||||||||||||
Three Months Ended December 31, | Nine Months Ended December 31, | |||||||||||||||||||||||||||||||||||||||
2013 |
2013 Free |
2012 |
2012 Free |
2013 |
2013 Free |
2012 |
2012 Free |
|||||||||||||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||||||||||||||||
GAAP Net Income | $ | 3,130 | $ | 0.06 | $ | 12,257 | $ | 0.24 | $ | 56,614 | $ | 1.08 | $ | 46,156 | $ | 0.90 | ||||||||||||||||||||||||
Adjustments: |
||||||||||||||||||||||||||||||||||||||||
Adjustments to reconcile net income to net cash provided by operating activities as shown in the Statement of Cash Flows | 19,438 | 0.37 | 17,179 | 0.33 | 35,612 | 0.68 | 42,032 | 0.82 | ||||||||||||||||||||||||||||||||
Changes in operating assets and liabilities, net of effects from acquisitions as shown in the Statement of Cash Flows | 2,694 | 0.05 | 11,066 | 0.22 | (11,366 | ) | (0.22 | ) | 12,688 | 0.25 | ||||||||||||||||||||||||||||||
Total adjustments | 22,132 | 0.42 | 28,245 | 0.55 | 24,246 | 0.46 | 54,720 | 1.07 | ||||||||||||||||||||||||||||||||
GAAP Net cash provided by operating activities | 25,262 | 0.48 | 40,502 | 0.79 | 80,860 | 1.54 | 100,876 | 1.97 | ||||||||||||||||||||||||||||||||
Premium payment on 2010 Senior Notes | 12,768 | 0.24 | — | — | 12,768 | 0.25 | — | — | ||||||||||||||||||||||||||||||||
Accelerated interest payments due to debt refinancing | 3,513 | 0.07 | — | — | 3,513 | 0.07 | — | — | ||||||||||||||||||||||||||||||||
Non-GAAP Operating Cash Flow | 41,543 | 0.79 | 40,502 | 0.79 | 97,141 | 1.86 | 100,876 | 1.97 | ||||||||||||||||||||||||||||||||
Additions to property and equipment for cash | (339 | ) | (0.01 | ) | (3,656 | ) | (0.07 | ) | (2,658 | ) | (0.05 | ) | (8,922 | ) | (0.18 | ) | ||||||||||||||||||||||||
Non-GAAP Free Cash Flow | $ | 41,204 | $ | 0.78 | $ | 36,846 | $ | 0.72 | $ | 94,483 | $ | 1.81 | $ | 91,954 | $ | 1.79 | ||||||||||||||||||||||||
Source:
Prestige Brands Holdings, Inc.
Dean Siegal, 914-524-6819