News Releases
Fourth Quarter Revenues Up 32.9%: Full Year Earnings Up 19.6%
Key fourth quarter and fiscal year highlights include:
-
Revenue increased 32.9% to a record
$190.0 million and 19.6% to a record$714.6 million in Q4 and FY2015, respectively - Organic sales growth of 2.4% in Q4, excluding the impact of foreign exchange
-
Adjusted free cash flow increased 45.0% in Q4 to
$50.1 million -
Adjusted net income increased 33.1% to
$24.8 million , or$0.47 per diluted share in Q4; FY15 adjusted net income increased 22.7% to$98.0 million , or$1.86 per diluted share.
“We are extremely pleased with our fourth quarter and full fiscal year
results,” said
Fourth Fiscal Quarter Ended
Revenues in the fourth fiscal quarter increased 32.9% to a record
Fiscal Year Ended
Revenues for the fiscal year ended
Segment Review
Household Cleaning: Revenues totaled
Balance Sheet and Adjusted Free Cash Flow
Adjusted free cash flow totaled
Commentary and Outlook for FY2016
“Significant value creation initiatives are well underway for fiscal 2016,” Mr. Mannelly said. “Key among them is the stabilization and growth of Monistat and building our women’s health platform. We are investing in educating the healthcare professional about Monistat and, at the same time, creating new, more effective advertising to reach targeted consumers. Our core OTC and international portfolio continues to be the focus of our brand-building efforts and we will invest substantially in new product development within those platforms.”
Mr. Mannelly continued, “The progress we have made in building a
diversified portfolio, strengthening consumption trends among our core
OTC brands and expanding our international footprint in 2015 has us very
well positioned as we enter fiscal 2016. I am proud of these
accomplishments by the Prestige team, and I am confident in the
Company’s future under the leadership of
“We are providing an outlook for fiscal year 2016, which we believe will
be driven by organic growth in our legacy business and recent
acquisitions,” Mr. Mannelly continued. “For fiscal year 2016, we
anticipate revenue growth in the range of 10-12% including the impact of
foreign exchange, adjusted earnings per share in the range of
Q4 and Fiscal Year Conference Call, Accompanying Slide Presentation and Replay
The Company will host a conference call to review its fourth quarter and
full year results on
Non-GAAP Financial Information
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.
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
"outlook," "may," "will," "would," "expect," “intend,” “estimate,”
“anticipate,” “believe,” 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 positioning in fiscal 2016, our creation of shareholder
value, investments in advertising, promotion and product development,
brand growth, our expected future operating results, including revenue
growth, adjusted EPS, adjusted free cash flow, and our expected use of
free cash flow for rapid deleveraging and building M&A capacity, and our
execution of 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 fluctuating
exchange rates, the ability to identify and consummate acquisitions at
attractive valuations, the impact of our advertising and promotional
initiatives, competition in our industry, supplier issues, and the
success of our brand-building investments. 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. |
||||||||||||||||||
Three Months Ended |
Year Ended |
|||||||||||||||||
(In thousands, except per share data) | 2015 | 2014 | 2015 | 2014 | ||||||||||||||
Revenues | ||||||||||||||||||
Net sales | $ | 189,089 | $ | 141,592 | $ | 710,070 | $ | 592,454 | ||||||||||
Other revenues | 957 | 1,461 | 4,553 | 4,927 | ||||||||||||||
Total revenues | 190,046 | 143,053 | 714,623 | 597,381 | ||||||||||||||
Cost of Sales | ||||||||||||||||||
Cost of sales (exclusive of depreciation shown below) | 79,976 | 64,216 | 308,400 | 261,830 | ||||||||||||||
Gross profit | 110,070 | 78,837 | 406,223 | 335,551 | ||||||||||||||
Operating Expenses | ||||||||||||||||||
Advertising and promotion | 25,367 | 17,511 | 99,651 | 84,968 | ||||||||||||||
General and administrative | 17,685 | 13,091 | 81,273 | 48,481 | ||||||||||||||
Depreciation and amortization | 5,773 | 3,280 | 17,740 | 13,486 | ||||||||||||||
Total operating expenses | 48,825 | 33,882 | 198,664 | 146,935 | ||||||||||||||
Operating income | 61,245 | 44,955 | 207,559 | 188,616 | ||||||||||||||
Other (income) expense | ||||||||||||||||||
Interest income | (25 | ) | (16 | ) | (92 | ) | (60 | ) | ||||||||||
Interest expense | 23,821 | 14,994 | 81,326 | 68,642 | ||||||||||||||
Gain on sale of asset | — | — | (1,133 | ) | — | |||||||||||||
Loss on extinguishment of debt | — | 3,274 | — | 18,286 | ||||||||||||||
Total other expense | 23,796 | 18,252 | 80,101 | 86,868 | ||||||||||||||
Income before income taxes | 37,449 | 26,703 | 127,458 | 101,748 | ||||||||||||||
Provision for income taxes | 13,677 | 10,702 | 49,198 | 29,133 | ||||||||||||||
Net income | $ | 23,772 | $ | 16,001 | $ | 78,260 | $ | 72,615 | ||||||||||
Earnings per share: | ||||||||||||||||||
Basic | $ | 0.45 | $ | 0.31 | $ | 1.50 | $ | 1.41 | ||||||||||
Diluted | $ | 0.45 | $ | 0.30 | $ | 1.49 | $ | 1.39 | ||||||||||
Weighted average shares outstanding: | ||||||||||||||||||
Basic | 52,356 | 51,893 | 52,170 | 51,641 | ||||||||||||||
Diluted | 52,821 | 52,513 | 52,670 | 52,349 | ||||||||||||||
Comprehensive income, net of tax: | ||||||||||||||||||
Currency translation adjustments | (7,268 | ) | 2,414 | (24,151 | ) | 843 | ||||||||||||
Total other comprehensive income (loss) | (7,268 | ) | 2,414 | (24,151 | ) | 843 | ||||||||||||
Comprehensive income | $ | 16,504 | $ | 18,415 | $ | 54,109 | $ | 73,458 | ||||||||||
Prestige Brands Holdings, Inc. |
|||||||||
(In thousands)
Assets |
March 31, 2015 |
March 31, 2014 |
|||||||
Current assets | |||||||||
Cash and cash equivalents | $ | 21,318 | $ | 28,331 | |||||
Accounts receivable, net | 87,858 | 65,050 | |||||||
Inventories | 74,000 | 65,586 | |||||||
Deferred income tax assets | 8,097 | 6,544 | |||||||
Prepaid expenses and other current assets | 10,434 | 11,674 | |||||||
Total current assets | 201,707 | 177,185 | |||||||
Property and equipment, net | 13,744 | 9,597 | |||||||
Goodwill | 290,651 | 190,911 | |||||||
Intangible assets, net | 2,134,700 | 1,394,817 | |||||||
Other long-term assets | 28,603 | 23,153 | |||||||
Total Assets | $ | 2,669,405 | $ | 1,795,663 | |||||
Liabilities and Stockholders' Equity | |||||||||
Current liabilities | |||||||||
Accounts payable | $ | 46,115 | $ | 48,286 | |||||
Accrued interest payable | 11,974 | 9,626 | |||||||
Other accrued liabilities | 40,948 | 26,446 | |||||||
Total current liabilities | 99,037 | 84,358 | |||||||
Long-term debt | |||||||||
Principal amount | 1,593,600 | 937,500 | |||||||
Less unamortized discount | (4,889 | ) | (3,086 | ) | |||||
Long-term debt, net of unamortized discount | 1,588,711 | 934,414 | |||||||
Deferred income tax liabilities | 351,569 | 213,204 | |||||||
Other long-term liabilities | 2,464 | 327 | |||||||
Total Liabilities | 2,041,781 | 1,232,303 | |||||||
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 – 52,562 shares and 52,021 shares at March 31, 2015 and 2014, respectively | 525 | 520 | |||||||
Additional paid-in capital | 426,584 | 414,387 | |||||||
Treasury stock, at cost – 266 shares at March 31, 2015 and 206 at March 31, 2014 | (3,478 | ) | (1,431 | ) | |||||
Accumulated other comprehensive income (loss), net of tax | (23,412 | ) | 739 | ||||||
Retained earnings | 227,405 | 149,145 | |||||||
Total Stockholders' Equity | 627,624 | 563,360 | |||||||
Total Liabilities and Stockholders' Equity | $ | 2,669,405 | $ | 1,795,663 | |||||
Prestige Brands Holdings, Inc. |
|||||||||
Year Ended March 31, | |||||||||
(In thousands) | 2015 | 2014 | |||||||
Operating Activities | |||||||||
Net income | $ | 78,260 | $ | 72,615 | |||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||
Depreciation and amortization | 17,740 | 13,486 | |||||||
Gain on sale of asset | (1,133 | ) | — | ||||||
Deferred income taxes | 28,922 | 19,012 | |||||||
Long term income taxes payable | 2,294 | — | |||||||
Amortization of deferred financing costs | 6,735 | 7,102 | |||||||
Stock-based compensation costs | 6,918 | 5,146 | |||||||
Loss on extinguishment of debt | — | 18,286 | |||||||
Premium payment on 2010 Senior Notes | — | (15,527 | ) | ||||||
Amortization of debt discount | 2,086 | 3,410 | |||||||
Lease termination costs | 785 | — | |||||||
Loss (gain) on sale or disposal of property and equipment | 321 | (3 | ) | ||||||
Changes in operating assets and liabilities, net of effects of acquisitions | |||||||||
Accounts receivable | 1,608 | 9,735 | |||||||
Inventories | 15,360 | (2,850 | ) | ||||||
Prepaid expenses and other current assets | 4,664 | (2,130 | ) | ||||||
Accounts payable | (17,637 | ) | (4,641 | ) | |||||
Accrued liabilities | 9,332 | (12,059 | ) | ||||||
Net cash provided by operating activities | 156,255 | 111,582 | |||||||
Investing Activities | |||||||||
Purchases of property and equipment | (6,101 | ) | (2,764 | ) | |||||
Proceeds from sale of property and equipment | — | 3 | |||||||
Proceeds from sale of business | 18,500 | — | |||||||
Proceeds from sale of asset | 10,000 | — | |||||||
Acquisition of Insight Pharmaceuticals, less cash acquired | (749,666 | ) | — | ||||||
Acquisition of the Hydralyte brand | (77,991 | ) | — | ||||||
Acquisition of Care Pharmaceuticals, less cash acquired | — | (55,215 | ) | ||||||
Net cash used in investing activities | (805,258 | ) | (57,976 | ) | |||||
Financing Activities | |||||||||
Proceeds from issuance of 2013 Senior Notes | — | 400,000 | |||||||
Repayment of 2010 Senior Notes | — | (250,000 | ) | ||||||
Term loan borrowings | 720,000 | — | |||||||
Term loan repayments | (130,000 | ) | (157,500 | ) | |||||
Borrowings under revolving credit agreement | 124,600 | 50,000 | |||||||
Repayments under revolving credit agreement | (58,500 | ) | (83,000 | ) | |||||
Payment of deferred financing costs | (16,072 | ) | (7,466 | ) | |||||
Proceeds from exercise of stock options | 3,954 | 5,907 | |||||||
Proceeds from restricted stock exercises | 57 | — | |||||||
Excess tax benefits from share-based awards | 1,330 | 1,650 | |||||||
Fair value of shares surrendered as payment of tax withholding | (2,104 | ) | (744 | ) | |||||
Net cash provided by (used in) financing activities | 643,265 | (41,153 | ) | ||||||
Effects of exchange rate changes on cash and cash equivalents | (1,275 | ) | 208 | ||||||
Increase (decrease) in cash and cash equivalents | (7,013 | ) | 12,661 | ||||||
Cash and cash equivalents - beginning of year | 28,331 | 15,670 | |||||||
Cash and cash equivalents - end of year | $ | 21,318 | $ | 28,331 | |||||
Interest paid | $ | 70,155 | $ | 62,357 | |||||
Income taxes paid | $ | 11,939 | $ | 11,020 | |||||
Prestige Brands Holdings, Inc. |
|||||||||||||||||
Three Months Ended March 31, 2015 | |||||||||||||||||
(In thousands) |
North |
International |
Household |
Consolidated | |||||||||||||
Gross segment revenues | $ | 156,489 | $ | 13,023 | $ | 20,028 | $ | 189,540 | |||||||||
Elimination of intersegment revenues | (451 | ) | — | — | (451 | ) | |||||||||||
Third-party segment revenues | 156,038 | 13,023 | 20,028 | 189,089 | |||||||||||||
Other revenues | 159 | 2 | 796 | 957 | |||||||||||||
Total segment revenues | 156,197 | 13,025 | 20,824 | 190,046 | |||||||||||||
Cost of sales | 58,776 | 4,894 | 16,306 | 79,976 | |||||||||||||
Gross profit | 97,421 | 8,131 | 4,518 | 110,070 | |||||||||||||
Advertising and promotion | 22,324 | 2,771 | 272 | 25,367 | |||||||||||||
Contribution margin | $ | 75,097 | $ | 5,360 | $ | 4,246 | $ | 84,703 | |||||||||
Other operating expenses | 23,458 | ||||||||||||||||
Operating income | 61,245 | ||||||||||||||||
Other expense | 23,796 | ||||||||||||||||
Income before income taxes | 37,449 | ||||||||||||||||
Provision for income taxes | 13,677 | ||||||||||||||||
Net income | $ | 23,772 | |||||||||||||||
Year Ended March 31, 2015 | |||||||||||||||||
(In thousands) |
North |
International |
Household |
Consolidated | |||||||||||||
Gross segment revenues | $ | 566,256 | $ | 61,116 | $ | 86,085 | $ | 713,457 | |||||||||
Elimination of intersegment revenues | (3,387 | ) | — | — | (3,387 | ) | |||||||||||
Third-party segment revenues | 562,869 | 61,116 | 86,085 | 710,070 | |||||||||||||
Other revenues | 637 | 64 | 3,852 | 4,553 | |||||||||||||
Total segment revenues | 563,506 | 61,180 | 89,937 | 714,623 | |||||||||||||
Cost of sales | 216,781 | 22,820 | 68,799 | 308,400 | |||||||||||||
Gross profit | 346,725 | 38,360 | 21,138 | 406,223 | |||||||||||||
Advertising and promotion | 86,897 | 10,922 | 1,832 | 99,651 | |||||||||||||
Contribution margin | $ | 259,828 | $ | 27,438 | $ | 19,306 | $ | 306,572 | |||||||||
Other operating expenses | 99,013 | ||||||||||||||||
Operating income | 207,559 | ||||||||||||||||
Other expense | 80,101 | ||||||||||||||||
Income before income taxes | 127,458 | ||||||||||||||||
Provision for income taxes | 49,198 | ||||||||||||||||
Net income | $ | 78,260 | |||||||||||||||
Three Months Ended March 31, 2014 | |||||||||||||||||
(In thousands) |
North |
International |
Household |
Consolidated | |||||||||||||
Gross segment revenues | $ | 112,782 | $ | 9,236 | $ | 20,431 | $ | 142,449 | |||||||||
Elimination of intersegment revenues | (857 | ) | — | — | (857 | ) | |||||||||||
Third-party segment revenues | 111,925 | 9,236 | 20,431 | 141,592 | |||||||||||||
Other revenues | 299 | 28 | 1,134 | 1,461 | |||||||||||||
Total segment revenues | 112,224 | 9,264 | 21,565 | 143,053 | |||||||||||||
Cost of sales | 44,377 | 3,699 | 16,140 | 64,216 | |||||||||||||
Gross profit | 67,847 | 5,565 | 5,425 | 78,837 | |||||||||||||
Advertising and promotion | 15,606 | 1,409 | 496 | 17,511 | |||||||||||||
Contribution margin | $ | 52,241 | $ | 4,156 | $ | 4,929 | $ | 61,326 | |||||||||
Other operating expenses | 16,371 | ||||||||||||||||
Operating income | 44,955 | ||||||||||||||||
Other expense | 18,252 | ||||||||||||||||
Income before income taxes | 26,703 | ||||||||||||||||
Provision for income taxes | 10,702 | ||||||||||||||||
Net income | $ | 16,001 | |||||||||||||||
Year Ended March 31, 2014 | |||||||||||||||||
(In thousands) |
North |
International |
Household |
Consolidated | |||||||||||||
Gross segment revenues | $ | 482,138 | $ | 29,872 | $ | 83,629 | $ | 595,639 | |||||||||
Elimination of intersegment revenues | (3,185 | ) | — | — | (3,185 | ) | |||||||||||
Third-party segment revenues | 478,953 | 29,872 | 83,629 | 592,454 | |||||||||||||
Other revenues | 749 | 42 | 4,136 | 4,927 | |||||||||||||
Total segment revenues | 479,702 | 29,914 | 87,765 | 597,381 | |||||||||||||
Cost of sales | 184,796 | 12,646 | 64,388 | 261,830 | |||||||||||||
Gross profit | 294,906 | 17,268 | 23,377 | 335,551 | |||||||||||||
Advertising and promotion | 77,083 | 5,264 | 2,621 | 84,968 | |||||||||||||
Contribution margin | $ | 217,823 | $ | 12,004 | $ | 20,756 | $ | 250,583 | |||||||||
Other operating expenses | 61,967 | ||||||||||||||||
Operating income | 188,616 | ||||||||||||||||
Other expense | 86,868 | ||||||||||||||||
Income before income taxes | 101,748 | ||||||||||||||||
Provision for income taxes | 29,133 | ||||||||||||||||
Net income | $ | 72,615 | |||||||||||||||
About Non-GAAP Financial Measures
We define Non-GAAP Adjusted Total Revenues excluding acquisitions and divestitures and the impact of current year foreign exchange rates as Total Revenues excluding revenues associated with products acquired or divested in the periods presented and the impact of current year foreign exchange rates on total revenues. We define Non-GAAP Adjusted EBITDA as earnings before interest expense (income), income taxes, depreciation and amortization, certain other legal and professional fees, and other acquisition-related costs. Non-GAAP Adjusted EBITDA margin is calculated as Non-GAAP Adjusted EBITDA divided by GAAP Total Revenues. We define Non-GAAP Adjusted Gross Margin as Gross Profit before inventory step up charges and certain other acquisition and integration-related costs. Non-GAAP Adjusted Gross Margin percentage is calculated based on Non-GAAP Adjusted Gross Margin divided by GAAP Total Revenues. We define Non-GAAP Adjusted General and Administrative expenses as General and Administrative expenses minus certain other legal and professional fees, acquisition and other integration costs. Non-GAAP Adjusted General and Administrative expense percentage is calculated based on Non-GAAP Adjusted General and Administrative expense divided by GAAP Total Revenues. We define Non-GAAP Adjusted Net Income as Net Income before inventory step-up charges, certain other legal and professional fees, other acquisition and integration-related costs, 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 Adjusted 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, plus payments for integration, transition and other payments associated with acquisitions. Non-GAAP Adjusted Total Revenues excluding acquisitions and divestitures and the impact of current year foreign exchange rates, Non-GAAP Adjusted EBITDA, Non-GAAP Adjusted EBITDA Margin, Non-GAAP Adjusted Gross Margin, Non-GAAP Adjusted Gross Margin percentage, Non-GAAP Adjusted General and Administrative Expense, Non-GAAP Adjusted General and Administrative Expense percentage, Non-GAAP Adjusted Net Income, Non-GAAP Adjusted EPS, and Non-GAAP Adjusted Free Cash Flow may not be comparable to similarly titled measures reported by other companies.
We are presenting Non-GAAP Adjusted Total Revenues excluding acquisitions and divestitures and exchange rates, Non-GAAP Adjusted EBITDA, Non-GAAP Adjusted EBITDA Margin, Non-GAAP Adjusted Gross Margin, Non-GAAP Adjusted Gross Margin percentage, Non-GAAP Adjusted General and Administrative Expense, Non-GAAP Adjusted General and Administrative Expense percentage, Non-GAAP Adjusted Net Income, Non-GAAP Adjusted EPS, and Non-GAAP Adjusted Free Cash Flow, because they provide additional ways to view our operation when considered with both our GAAP results and the reconciliation to net income and net cash provided by operating activities, respectively, which we believe provides a more complete understanding of our business than could be obtained absent this disclosure. Each of Non-GAAP Adjusted Total Revenues excluding acquisitions and divestitures and exchange rates, Non-GAAP Adjusted EBITDA, Non-GAAP Adjusted EBITDA Margin, Non-GAAP Adjusted Gross Margin, Non-GAAP Adjusted Gross Margin percentage, Non-GAAP Adjusted General and Administrative Expense, Non-GAAP Adjusted General and Administrative Expense percentage, Non-GAAP Adjusted Net Income, Non-GAAP Adjusted EPS, and Non-GAAP Adjusted Free Cash Flow 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 excluding acquisitions and divestitures and exchange rates, Non-GAAP Adjusted EBITDA, Non-GAAP Adjusted EBITDA Margin, Non-GAAP Adjusted Gross Margin, Non-GAAP Adjusted Gross Margin percentage, Non-GAAP Adjusted General and Administrative Expense, Non-GAAP Adjusted General and Administrative Expense percentage, Non-GAAP Adjusted Net Income, Non-GAAP Adjusted EPS, and Non-GAAP Adjusted Free Cash Flow 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 excluding acquisitions and divestitures and exchange rates, Non-GAAP Adjusted EBITDA, Non-GAAP Adjusted EBITDA Margin, Non-GAAP Adjusted Gross Margin, Non-GAAP Adjusted Gross Margin percentage, Non-GAAP Adjusted General and Administrative Expense, Non-GAAP Adjusted General and Administrative Expense percentage, Non-GAAP Adjusted Net Income, Non-GAAP Adjusted EPS, and Non-GAAP Adjusted Free Cash Flow have limitations, and you should not consider these measures in isolation from or as an alternative to GAAP measures such as General and Administrative expense, 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 excluding acquisitions and divestitures and exchange rates, Non-GAAP Adjusted EBITDA, Non-GAAP Adjusted EBITDA Margin, Non-GAAP Adjusted Gross Margin, Non-GAAP Adjusted Gross Margin percentage, Non-GAAP Adjusted General and Administrative Expense, Non-GAAP Adjusted General and Administrative Expense percentage, Non-GAAP Adjusted Net Income, Non-GAAP Adjusted EPS, Non-GAAP Adjusted Free Cash Flow, all of which are non-GAAP financial measures, to GAAP Gross Profit, GAAP General and Administrative expense, 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 Adjusted Total Revenues excluding acquisitions and divestitures and exchange rates:
Three Months Ended |
Year Ended |
||||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||||
(In thousands) | |||||||||||||||||
GAAP Total Revenues | $ | 190,046 | $ | 143,053 | $ | 714,623 | $ | 597,381 | |||||||||
Adjustments: |
|||||||||||||||||
Care Pharma and Hydralyte revenues (1) | (4,452 | ) | — | (23,043 | ) | — | |||||||||||
Insight revenues (2) | (40,978 | ) | — | (97,068 | ) | — | |||||||||||
Total adjustments | (45,430 | ) | — | (120,111 | ) | — | |||||||||||
Non-GAAP Adjusted Total Revenues excluding acquisitions and divestitures | 144,616 | 143,053 | 594,512 | 597,381 | |||||||||||||
Organic Revenue Growth (decline) | 1.1 | % | (0.5 | )% | |||||||||||||
Impact of current year foreign exchange rates (3) | (1,805 | ) | (3,839 | ) | |||||||||||||
Non-GAAP Adjusted Total Revenues excluding acquisitions and divestitures and impact of current year foreign exchange rates |
$ | 144,616 | $ | 141,248 | $ | 594,512 | $ | 593,542 | |||||||||
Constant Currency Organic Revenue Growth | 2.4 | % | 0.2 | % |
(1) | Revenue adjustments relate to our International OTC Healthcare segment | |
(2) | Revenue adjustments relate to our North American OTC Healthcare segment | |
(3) | Foreign exchange rate adjustments relate to all segments | |
Reconciliation of GAAP Gross Profit to Non-GAAP Adjusted Gross Margin and related Adjusted Gross Margin percentage:
Three Months Ended |
Year Ended |
||||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||||
(In thousands) | |||||||||||||||||
GAAP Total Revenues | $ | 190,046 | $ | 143,053 | $ | 714,623 | $ | 597,381 | |||||||||
GAAP Gross Profit | $ | 110,070 | $ | 78,837 | $ | 406,223 | $ | 335,551 | |||||||||
Adjustments: |
|||||||||||||||||
Inventory step-up charges and other costs associated with Care and Hydralyte acquisitions (1) |
— | — | 246 | 577 | |||||||||||||
Inventory step-up charges associated with Insight acquisition (2) | — | — | 1,979 | — | |||||||||||||
Care acquisition related inventory costs (1) | — | — | — | 407 | |||||||||||||
Total adjustments | — | — | 2,225 | 984 | |||||||||||||
Non-GAAP Adjusted Gross Margin | $ | 110,070 | $ | 78,837 | $ | 408,448 | $ | 336,535 | |||||||||
Non-GAAP Adjusted Gross Margin % | 57.9 | % | 55.1 | % | 57.2 | % | 56.3 | % | |||||||||
(1) | Inventory step-up charges and other costs relate to our International OTC Healthcare segment | |
(2) | Inventory step-up charges relate to our North American OTC Healthcare segment | |
Reconciliation of GAAP General and Administrative Expense to Non-GAAP Adjusted General and Administrative Expense and Non-GAAP Adjusted General and Administrative Expense percentage:
Three Months Ended |
Year Ended |
||||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||||
(In thousands) | |||||||||||||||||
GAAP General and Administrative Expense | $ | 17,685 | $ | 13,091 | $ | 81,273 | $ | 48,481 | |||||||||
Adjustments: |
|||||||||||||||||
Legal and professional fees associated with acquisitions and divestitures | 640 | 443 | 10,974 | 1,111 | |||||||||||||
Stamp/Duty Tax on Australian acquisition | — | — | 2,940 | — | |||||||||||||
Integration, transition and other costs associated with acquisitions | 920 | — | 10,533 | — | |||||||||||||
Total adjustments | 1,560 | 443 | 24,447 | 1,111 | |||||||||||||
Non-GAAP Adjusted General and Administrative Expense | $ | 16,125 | $ | 12,648 | $ | 56,826 | $ | 47,370 | |||||||||
Non-GAAP Adjusted General and Administrative Expense Percentage | 8.5 | % | 8.8 | % | 8.0 | % | 7.9 | % | |||||||||
Reconciliation of GAAP Net Income to Non-GAAP Adjusted EBITDA and Non-GAAP Adjusted EBITDA Margin:
Three Months Ended |
Year Ended |
||||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||||
(In thousands) | |||||||||||||||||
GAAP Net Income | $ | 23,772 | $ | 16,001 | $ | 78,260 | $ | 72,615 | |||||||||
Interest expense, net | 23,796 | 14,978 | 81,234 | 68,582 | |||||||||||||
Provision for income taxes | 13,677 | 10,702 | 49,198 | 29,133 | |||||||||||||
Depreciation and amortization | 5,773 | 3,280 | 17,740 | 13,486 | |||||||||||||
Non-GAAP EBITDA: | 67,018 | 44,961 | 226,432 | 183,816 | |||||||||||||
Adjustments: |
|||||||||||||||||
Inventory step-up charges and other costs associated with Care and Hydralyte acquisitions (1) | — | — | 246 | 577 | |||||||||||||
Inventory step-up charges associated with Insight acquisition (2) | — | — | 1,979 | — | |||||||||||||
Care acquisition related inventory costs (1) | — | — | — | 407 | |||||||||||||
Legal and professional fees associated with acquisitions and divestitures (3) | 640 | 443 | 10,974 | 1,111 | |||||||||||||
Stamp/Duty Tax on Australian acquisition (3) | — | — | 2,940 | — | |||||||||||||
Integration, transition and other costs associated with acquisitions (3) | 920 | — | 10,533 | — | |||||||||||||
Gain on sale of asset | — | — | (1,133 | ) | — | ||||||||||||
Loss on extinguishment of debt | — | 3,274 | — | 18,286 | |||||||||||||
Total adjustments | 1,560 | 3,717 | 25,539 | 20,381 | |||||||||||||
Non-GAAP Adjusted EBITDA | $ | 68,578 | $ | 48,678 | $ | 251,971 | $ | 204,197 | |||||||||
Non-GAAP Adjusted EBITDA Margin | 36.1 | % | 34.0 | % | 35.3 | % | 34.2 | % |
(1) | Inventory step-up charges and other costs relate to our International OTC Healthcare segment | |
(2) | Inventory step-up charges relate to our North American OTC Healthcare segment | |
(3) | 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 March 31, | Year Ended March 31, | ||||||||||||||||||||||||||||||||
2015 |
2015 |
2014 |
2014 |
2015 |
2015 |
2014 |
2014 |
||||||||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||||||||||
GAAP Net Income | $ | 23,772 | $ | 0.45 | $ | 16,001 | $ | 0.30 | $ | 78,260 | $ | 1.49 | $ | 72,615 | $ | 1.39 | |||||||||||||||||
Adjustments: |
|||||||||||||||||||||||||||||||||
Inventory step-up charges and other costs associated with Care and Hydralyte acquisitions (1) | — | — | — | — | 246 | — | 577 | 0.01 | |||||||||||||||||||||||||
Inventory step-up charges associated with Insight acquisition (2) | — | — | — | — | 1,979 | 0.04 | — | — | |||||||||||||||||||||||||
Care acquisition related inventory costs (1) | — | — | — | — | — | — | 407 | 0.01 | |||||||||||||||||||||||||
Legal and professional fees associated with acquisitions and divestitures (3) | 640 | 0.01 | 443 | 0.01 | 10,974 | 0.21 | 1,111 | 0.02 | |||||||||||||||||||||||||
Stamp/Duty Tax on Australian acquisition (3) | — | — | — | — | 2,940 | 0.05 | — | — | |||||||||||||||||||||||||
Integration, transition and other costs associated with acquisitions (3) | 920 | 0.02 | — | — | 10,533 | 0.20 | — | — | |||||||||||||||||||||||||
Accelerated amortization of debt discount and debt issue costs | — | — | 365 | 0.01 | 218 | — | 5,477 | 0.10 | |||||||||||||||||||||||||
Gain on sale of asset | — | — | — | — | (1,133 | ) | (0.02 | ) | — | — | |||||||||||||||||||||||
Loss on extinguishment of debt | — | — | 3,274 | 0.06 | — | — | 18,286 | 0.35 | |||||||||||||||||||||||||
Tax impact of adjustments | (549 | ) | (0.01 | ) | (1,459 | ) | (0.03 | ) | (5,968 | ) | (0.11 | ) | (9,100 | ) | (0.17 | ) | |||||||||||||||||
Impact of state tax adjustments | — | — | — | — | — | — | (9,465 | ) | (0.18 | ) | |||||||||||||||||||||||
Total adjustments | 1,011 | 0.02 | 2,623 | 0.05 | 19,789 | 0.37 | 7,293 | 0.14 | |||||||||||||||||||||||||
Non-GAAP Adjusted Net Income and Adjusted EPS | $ | 24,783 | $ | 0.47 | $ | 18,624 | $ | 0.35 | $ | 98,049 | $ | 1.86 | $ | 79,908 | $ | 1.53 |
(1) | Inventory step-up charges and other costs relate to our International OTC Healthcare segment | |
(2) | Inventory step-up charges relate to our North American OTC Healthcare segment | |
(3) | Adjustments relate to G&A expenses | |
Reconciliation of GAAP Net Income to Adjusted Non-GAAP Free Cash Flow:
Three Months Ended |
Year Ended |
||||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||||
(In thousands) | |||||||||||||||||
GAAP Net Income | $ | 23,772 | $ | 16,001 | $ | 78,260 | $ | 72,615 | |||||||||
Adjustments: |
|||||||||||||||||
Adjustments to reconcile net income to net cash provided by operating activities as shown in the Statement of Cash Flows | 22,048 | 15,300 | 64,668 | 50,912 | |||||||||||||
Changes in operating assets and liabilities, net of effects from acquisitions as shown in the Statement of Cash Flows | 6,293 | (579 | ) | 13,327 | (11,945 | ) | |||||||||||
Total adjustments | 28,341 | 14,721 | 77,995 | 38,967 | |||||||||||||
GAAP Net cash provided by operating activities | 52,113 | 30,722 | 156,255 | 111,582 | |||||||||||||
Premium payment on 2010 Senior Notes | — | 2,759 | — | 15,527 | |||||||||||||
Accelerated interest payments due to debt refinancing | — | 1,162 | — | 4,675 | |||||||||||||
Purchases of property and equipment | (2,401 | ) | (106 | ) | (6,101 | ) | (2,764 | ) | |||||||||
Non-GAAP Free Cash Flow | 49,712 | 34,537 | 150,154 | 129,020 | |||||||||||||
Integration, transition and other payments associated with acquisitions | 362 | — | 13,563 | 512 | |||||||||||||
Adjusted Non-GAAP Free Cash Flow | $ | 50,074 | $ | 34,537 | $ | 163,717 | $ | 129,532 | |||||||||
Outlook for Fiscal Year 2016:
Reconciliation of Projected GAAP EPS to Projected Non-GAAP Adjusted EPS:
2016 Projected EPS | |||||||||
Low | High | ||||||||
Projected FY'16 GAAP EPS | $ | 2.00 | $ | 2.05 | |||||
Adjustments: |
|||||||||
Costs associated with term loan refinancing and CEO retirement | 0.05 | 0.05 | |||||||
Total Adjustments | 0.05 | 0.05 | |||||||
Projected Non-GAAP Adjusted EPS | $ | 2.05 | $ | 2.10 | |||||
Reconciliation of Projected GAAP Net cash provided by operating activities to Projected Non-GAAP Adjusted Free Cash Flow:
2016 |
||||||
(In millions) | ||||||
Projected FY'16 GAAP Net cash provided by operating activities | $ | 181 | ||||
Additions to property and equipment for cash | (6 | ) | ||||
Projected Non-GAAP Adjusted Free Cash Flow | $ | 175 | ||||
Source:
Prestige Brands Holdings, Inc.
Dean Siegal, 914-524-6819
or
ICR
Kristen
Nungesser, 646-277-1261
or
John Mills, 646-277-1254