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    Prestige Brands Holdings, Inc. Reports Record First Quarter Fiscal 2016 Revenues Up 31.9% to $192.1 Million & Free Cash Flow Up 46.5% to $42.7 Million

    Outlook Reaffirmed for Fiscal Year 2016

    TARRYTOWN, N.Y.--(BUSINESS WIRE)--Aug. 6, 2015-- Prestige Brands Holdings, Inc. (NYSE-PBH) today announced results for the first quarter of fiscal year 2016, which ended June 30, 2015, and reconfirmed the outlook for the fiscal year previously provided for revenues, adjusted earnings per share, and free cash flow.

    Key first quarter highlights include:

    • Revenues increased 31.9% to a record $192.1 million
    • Free cash flow increased 46.5% to $42.7 million
    • Organic sales growth of 3.7%, excluding the impact of foreign currency fluctuations
    • Adjusted earnings per share increased 26.8% to $0.52

    First Fiscal Quarter Ended June 30, 2015

    Revenues for the first quarter of fiscal 2016 were $192.1 million, an increase of 31.9% over the prior year comparable quarter’s revenues of $145.7 million. These results reflect strong consumption levels across the Company’s core over-the-counter healthcare brands (OTC), our growing international business, as well as the acquisitions of Insight Pharmaceuticals (Insight) and Hydralyte. Organic sales growth for the quarter was 3.7%, excluding the impact of foreign currency fluctuations.

    Reported net income for the first quarter of fiscal 2016 totaled $26.2 million, or $0.49 per diluted share, an increase of 56.4% over the prior year comparable quarter’s results of $16.7 million, or $0.32 per diluted share. Adjusted net income for the first quarter of fiscal 2016 was $27.4 million, or $0.52 per diluted share, an increase of 27.4% over the prior year comparable period's adjusted net income of $21.5 million, or $0.41 per diluted share.

    Free Cash Flow & Balance Sheet

    The Company's free cash flow for the quarter ended June 30, 2015 was $42.7 million compared to the prior year comparable quarter’s free cash flow of $29.2 million, an increase of 46.5%. Adjusted EBITDA for the first quarter of fiscal 2016 was $69.6 million, an increase of 36.4% over the prior year comparable quarter’s adjusted EBITDA of $51.0 million.

    The Company's net debt at June 30, 2015 was approximately $1.5 billion, reflecting net debt repayments of approximately $45.0 million during the first fiscal quarter. The Company also completed the previously announced refinancing of its term loan to more favorable rates during the first fiscal quarter. At June 30, 2015, the Company's covenant-defined leverage ratio was approximately 5.1.

    Segment Review

    Revenues for the North American OTC Healthcare segment were $155.7 million for the first quarter of fiscal 2016, 40.9% higher than the prior year comparable quarter's revenues of $110.4 million. Revenues for the International OTC Healthcare segment were $14.2 million, 3.5% higher than $13.7 million reported in the prior year's comparable period. Revenues for both the North American OTC Healthcare segment and the International OTC Healthcare segment were impacted by increased consumption levels and the acquisitions of Insight and Hydralyte. Revenues for the Household Cleaning segment were $22.3 million for the first quarter of fiscal 2016, an increase of 3.4% over the prior year comparable quarter's revenues of $21.5 million.

    Commentary & Outlook

    “We are very pleased with our first quarter results, highlighted by record revenues driven by strong organic growth of 3.7%, excluding the impact of foreign currency fluctuations, and solid performance of our Insight and Hydralyte acquisitions,” said Ron Lombardi, President and CEO.

    “With first quarter results under our belt, strong consumption trends across many of our key brands, and a growing international business, we believe the Company is on track to achieve our previously provided outlook. For the full fiscal year 2016, we are reconfirming our revenue growth projection to be in the range of 10% to 12%, including the estimated impact of foreign currency fluctuations. We continue to anticipate revenue growth for the first half of the fiscal year of 20% to 23% and 1.5% to 2% for the second half as we annualize the Insight and Hydralyte acquisitions which closed during the first half of fiscal 2015,” he said.

    “In addition, we continue to expect fiscal 2016 adjusted earnings per share in the range of $2.05-$2.10,” Mr. Lombardi stated. “Our industry-leading free cash flow is expected to be very strong for the fiscal year with free cash flow estimated to be $175 million or more, which will enable the Company to continue to rapidly de-lever, build M&A capacity, and to continue to invest in building our brands.”

    Q1 Conference Call & Accompanying Slide Presentation

    The Company will host a conference call to review its first quarter results on August 6, 2015 at 8:30 am EDT. The toll-free dial-in numbers are 877-703-6109 within North America and 857-244-7308 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 Investor Relations page of the Company's website at http://prestigebrands.com. The slide presentation can be accessed just before the call from the Investor Relations page of the website by clicking on Webcasts 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 19469360.

    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 Prestige Brands Holdings, Inc.

    The Company markets and distributes brand name over-the-counter healthcare and household cleaning products throughout the U.S., Canada, and Australia and in certain other international markets. Core brands include Monistat® women’s health products, Nix® lice treatment, Chloraseptic® sore throat treatments, Clear Eyes® eye care products, Compound W® wart treatments, The Doctor's® NightGuard® dental protector, Little Remedies® pediatric 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," “strategy,” "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 Company's expectations regarding future operating results including revenues, adjusted earnings per share and free cash flow, the strength of consumption of the Company's products, the growth of the Company's international business and the Company's expectations of rapid de-levering, building M&A capacity and investing in brand building. 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, the severity of the cold and flu season, general economic and business conditions, fluctuating foreign exchange rates, consumer trends, competition in our industry, the ability of our third party manufacturers and suppliers to meet demand for our products, and introductions of new 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, 2015 and other periodic reports filed with the Securities and Exchange Commission.

     

    Prestige Brands Holdings, Inc.
    Consolidated Statements of Income and Comprehensive Income
    (Unaudited)

       
     

    Three Months Ended June 30,

    (In thousands, except per share data)

    2015

      2014
    Revenues
    Net sales

    $

     

    191,287

    $

     

    144,541
    Other revenues 845     1,161  
    Total revenues 192,132 145,702
    Cost of Sales
    Cost of sales (exclusive of depreciation shown below) 79,896     63,836  
    Gross profit 112,236     81,866  
    Operating Expenses
    Advertising and promotion 26,422 19,096
    General and administrative 17,589 17,006
    Depreciation and amortization 5,720     2,961  
    Total operating expenses 49,731     39,063  

    Operating income

    62,505

        42,803  
    Other (income) expense

    Interest income

    (27

    )

    (32

    )

    Interest expense

    21,911

    14,685

    Loss on extinguishment of debt

    451

       

     

    Total other expense

    22,335

       

    14,653

     

    Income before income taxes

    40,170

    28,150

    Provision for income taxes

    13,997

       

    11,418

     

    Net income

    $

     

    26,173

     

    $

     

    16,732

     

    Earnings per share:

    Basic

    $

     

    0.50

     

    $

     

    0.32

     

    Diluted

    $

     

    0.49

     

    $

     

    0.32

     

    Weighted average shares outstanding:

    Basic 52,548     51,956  
    Diluted 52,958     52,533  
    Comprehensive income, net of tax:
    Currency translation adjustments (405 )   2,726  
    Total other comprehensive income (loss) (405 )   2,726  
    Comprehensive income

    $

     

    25,768

     

    $

     

    19,458

     
     
     

    Prestige Brands Holdings, Inc.
    Consolidated Balance Sheets
    (Unaudited)

     

         

    (In thousands)
    Assets

    June 30,
    2015

    March 31,
    2015

    Current assets
    Cash and cash equivalents $ 21,598 $ 21,318
    Accounts receivable, net 85,576 87,858
    Inventories 74,077 74,000
    Deferred income tax assets 7,918 8,097
    Prepaid expenses and other current assets   11,890   10,434  
    Total current assets 201,059 201,707
    Property and equipment, net 13,154 13,744
    Goodwill 290,867 290,651
    Intangible assets, net 2,129,860 2,134,700
    Other long-term assets   1,562   1,165  
    Total Assets $ 2,636,502 $ 2,641,967  
    Liabilities and Stockholders' Equity
    Current liabilities
    Current portion of long term debt $ 8,525

    $

    Accounts payable 47,170 46,115
    Accrued interest payable 9,359 11,974
    Other accrued liabilities   36,738     40,948  

    Total current liabilities

    101,792

      99,037  
    Long-term debt
    Principal amount 1,540,075 1,593,600
    Less unamortized debt costs   (33,534 )   (32,327 )
    Long-term debt, net   1,506,541     1,561,273  
    Deferred income tax liabilities 362,928 351,569
    Other long-term liabilities   2,517     2,464  
    Total Liabilities   1,973,778     2,014,343  
    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 - 53,032 shares at June 30, 2015 and 52,562 shares at March 31, 2015 530 525
    Additional paid-in capital 437,554 426,584
    Treasury stock, at cost - 306 shares at June 30, 2015 and 266 shares at March 31, 2015 (5,121 ) (3,478 )
    Accumulated other comprehensive loss, net of tax (23,817 ) (23,412 )
    Retained earnings   253,578     227,405  
    Total Stockholders' Equity   662,724     627,624  
    Total Liabilities and Stockholders' Equity $ 2,636,502   $ 2,641,967  
     
     

    Prestige Brands Holdings, Inc.
    Consolidated Statements of Cash Flows
    (Unaudited)

     
     

    Three Months Ended June 30,

    (In thousands)

    2015

       

    2014

    Operating Activities

    Net income $ 26,173 $ 16,732
    Adjustments to reconcile net income to net cash provided by operating activities:
    Depreciation and amortization 5,720 2,961
    Gain on sale of asset (36)
    Deferred income taxes 11,536 7,140
    Amortization of debt origination costs 2,138 995
    Stock-based compensation costs 3,047 1,858
    Loss on extinguishment of debt 451

    Changes in operating assets and liabilities, net of effects from acquisitions

    Accounts receivable 2,578 6,956
    Inventories (211) 1,540
    Prepaid expenses and other current assets (1,522) (2,203)
    Accounts payable 783 (3,096)
    Accrued liabilities   (7,136)   (3,212)
    Net cash provided by operating activities   43,521   29,671

    Investing Activities

    Purchases of property and equipment (780) (496)
    Proceeds from the sale of property and equipment 344
    Acquisition of the Hydralyte brand   (77,991)
    Net cash used in investing activities   (436)   (78,487)

    Financing Activities

    Term loan repayments (25,000)
    Borrowings under revolving credit agreement 15,000 65,000
    Repayments under revolving credit agreement (35,000) (30,000)
    Payment of debt origination costs (4,172) (74)
    Proceeds from exercise of stock options 6,328 1,294
    Proceeds from restricted stock exercises 544 57
    Excess tax benefits from share-based awards 1,600 950
    Fair value of shares surrendered as payment of tax withholding   (2,187)   (1,171)
    Net cash (used in) provided by financing activities   (42,887)   36,056
    Effects of exchange rate changes on cash and cash equivalents 82 104
    Increase (decrease) in cash and cash equivalents

    280

    (12,656)
    Cash and cash equivalents - beginning of period   21,318   28,331
    Cash and cash equivalents - end of period

     

    $

    21,598

    $ 15,675
    Interest paid

     

    $

    22,444

    $ 13,867
    Income taxes paid

     

    $

    1,914

    $ 707
     
     

    Prestige Brands Holdings, Inc.
    Consolidated Statements of Income
    Business Segments
    (Unaudited)

     
     

    Three Months Ended June 30, 2015

     

     

    (In thousands)

    North
    American
    OTC
    Healthcare

     

    International
    OTC
    Healthcare

     

     

    Household
    Cleaning

     

     

     

    Consolidated

    Gross segment revenues

    $

    156,339

     

    $

    14,209

    $

    21,467

    $

    192,015

     

    Elimination of intersegment revenues

     

    (728

    )

     

     

     

    (728

    )

    Third-party segment revenues

    155,611

    14,209

    21,467

    191,287

    Other revenues

     

    40

       

     

    805

     

    845

     

    Total segment revenues

    155,651

    14,209

    22,272

    192,132

    Cost of sales

     

    58,126

       

    5,290

     

    16,480

     

    79,896

     
    Gross profit 97,525 8,919 5,792 112,236
    Advertising and promotion 23,195 2,723 504 26,422

    Contribution margin

    $

    74,330

     

    $

    6,196

    $

    5,288

     

    85,814

     

    Other operating expenses

     

    23,309

     
    Operating income 62,505
    Other expense   22,335  
    Income before income taxes 40,170
    Provision for income taxes   13,997  
    Net income $ 26,173  
     

    Three Months Ended June 30, 2014

     

     

    (In thousands)

    North
    American
    OTC
    Healthcare

     

    International
    OTC
    Healthcare

     

     

    Household
    Cleaning

     

     

     

    Consolidated

    Gross segment revenues

    $

    110,973

     

    $

    13,692

    $

    20,593

    $

    145,258

     

    Elimination of intersegment revenues

     

    (717

    )

     

     

     

    (717

    )

    Third-party segment revenues

    110,256

    13,692

    20,593

    144,541

    Other revenues

     

    177

       

    35

     

    949

     

    1,161

     

    Total segment revenues

    110,433

    13,727

    21,542

    145,702

    Cost of sales

     

    42,340

       

    5,078

     

    16,418

     

    63,836

     
    Gross profit 68,093 8,649 5,124 81,866
    Advertising and promotion   16,353     2,339   404   19,096  

    Contribution margin

    $

    51,740

     

    $

    6,310

    $

    4,720

    $

    62,770

     

    Other operating expenses

     

    19,967

     
    Operating income 42,803
    Other expense   14,653  
    Income before income taxes 28,150
    Provision for income taxes   11,418  
    Net income $ 16,732  
     

    About Non-GAAP Financial Measures

    We define Non-GAAP Organic Revenues as Total Revenues excluding revenues associated with products acquired or divested in the periods presented. We define Non-GAAP Organic Revenues on a Constant Currency basis as Total Revenues excluding acquisitions and divestitures 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, other acquisition-related costs, and costs associated with our CEO transition. 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, and costs associated with our CEO transition. 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, costs associated with our CEO transition, 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 Organic Revenues, Non-GAAP Organic Revenues on a Constant Currency basis, 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 Free Cash Flow may not be comparable to similarly titled measures reported by other companies.

    We are presenting Non-GAAP Organic Revenues, Non-GAAP Organic Revenues on a Constant Currency basis, 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 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 Organic Revenues, Non-GAAP Organic Revenues on a Constant Currency basis, 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 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 Organic Revenues, Non-GAAP Organic Revenues on a Constant Currency basis, 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 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 Organic Revenues, Non-GAAP Organic Revenues on a Constant Currency basis, 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 Free Cash Flow have limitations, and you should not consider these measures in isolation from or as an alternative to GAAP measures such as Total Revenues, 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 Organic Revenues, Non-GAAP Organic Revenues on a Constant Currency basis, 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 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 Organic Revenues and Non-GAAP Organic Revenues on a Constant

    Currency basis and related growth percentages:

     
       

    Three Months Ended
    June 30,

    2015

     

    2014

    (In thousands)

    GAAP Total Revenues

    $

    192,132

       

    $

    145,702

     

    Adjustments:

    Hydralyte revenues (1)

    (1,217

    )

    Insight revenues(2)

     

    (42,638

    )

       

     

    Total adjustments

     

    (43,855

    )

       

     

    Non-GAAP Organic Revenues

     

    148,277

         

    145,702

     

    Organic Revenue Growth (decline)

     

    1.8

    %

     
    Impact of foreign currency exchange rates (3)  

    (2,689

    )

    Non-GAAP Organic Revenues on a constant currency basis

    $

    148,277

       

    $

    143,013

     

    Constant Currency Organic Revenue Growth

     

    3.7

    %

     
    (1)   Revenue adjustments relate to our International OTC Healthcare segment
    (2) Revenue adjustments relate to our North American OTC Healthcare segment
    (3) Foreign currency 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 June 30,

    2015

     

    2014

    (In thousands)

    GAAP Total Revenues $ 192,132 $ 145,702
     
    GAAP Gross Profit $ 112,236 $ 81,866

    Adjustments:

    Inventory step-up charges and other costs associated
    with the Hydralyte acquisition (1)   130
    Total adjustments   130

    Non-GAAP Adjusted Gross Margin

    $ 112,236 $ 81,996

    Non-GAAP Adjusted Gross Margin %

     

    58.4%

     

    56.3%

    (1) Inventory step-up charges and other costs relate to our International OTC Healthcare segment

    Reconciliation of GAAP General and Administrative Expense to Non-GAAP Adjusted General and Administrative Expense and related Non-GAAP Adjusted General and Administrative Expense percentage:

       

    Three Months Ended June 30,

    2015   2014
    (In thousands)
    GAAP General and Administrative Expense $ 17,589   $ 17,006  

    Adjustments:

    Costs associated with CEO transition 1,406
    Legal and professional fees associated with acquisitions

    1,799

    Stamp/Duty Tax on Australian acquisition 2,940

    Integration, transition and other costs associated with

    acquisitions       411  
    Total adjustments   1,406     5,150  

    Non-GAAP Adjusted General and Administrative

    Expense $ 16,183   $ 11,856  

    Non-GAAP Adjusted General and Administrative

    Expense Percentage   8.4 %   8.1 %
     

    Reconciliation of GAAP Net Income to Non-GAAP Adjusted EBITDA and related Non-GAAP Adjusted EBITDA Margin:

       

    Three Months Ended
    June 30,

    2015

     

    2014

    (In thousands)

    GAAP Net Income $ 26,173 $ 16,732
    Interest expense, net 21,884 14,653
    Provision for income taxes 13,997 11,418
    Depreciation and amortization   5,720   2,961
    Non-GAAP EBITDA:   67,774   45,764

    Adjustments:

    Costs associated with CEO transition 1,406

    Inventory step-up charges and other costs associated with the Hydralyte acquisition (1)

    130
    Legal and professional fees associated with acquisitions (2)

    1,799
    Stamp/Duty Tax on Australian acquisition (2)

    2,940

    Integration, transition and other costs associated with acquisitions (2)

    411
    Loss on extinguishment of debt

    451

    Total adjustments

      1,857   5,280
    Non-GAAP Adjusted EBITDA $ 69,631 $ 51,044
    Non-GAAP Adjusted EBITDA Margin   36.2%

    35.0%

    (1)   Inventory step-up charges and other costs relate to our International 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 June 30,

    2015

     

    2015
    Adjusted
    EPS

     

    2014

     

    2014
    Adjusted
    EPS

    (In thousands)

       
    GAAP Net Income $ 26,173     $ 0.49  

     

    $

    16,732

       

    $

    0.32

     

    Adjustments:

    Costs associated with CEO transition 1,406 0.03

    Inventory step-up charges and other costs

     

    associated with the Hydralyte acquisition (1)

    130

    Legal and professional fees associated with

    acquisitions (2)

    1,799

    0.03

    Stamp/Duty Tax on Australian acquisition (2) 2,940 0.06

    Integration, transition and other costs

    associated with acquisitions (2)

    411 0.01
    Loss on extinguishment of debt 451 0.01
    Tax impact of adjustments   (657 )     (0.01 )     (528 )     (0.01 )

    Total adjustments

     

    1,200

         

    0.03

         

    4,752

       

    0.09

     

    Non-GAAP Adjusted Net Income and

    Adjusted EPS $ 27,373     $ 0.52   $  

    21,484

       

    $

    0.41

     
    (1)   Inventory step-up charges and other costs relate to our International OTC Healthcare segment
    (2) Adjustments relate to G&A expenses
     

    Reconciliation of GAAP Net Income to Non-GAAP Free Cash Flow:

       

    Three Months Ended
    June 30,

    2015

     

    2014

    (In thousands)
    GAAP Net Income $ 26,173     $ 16,732  

    Adjustments:

    Adjustments to reconcile net income to net cash
    provided by operating activities as shown in the
    Statement of Cash Flows

     

    22,856

     

    12,954

    Changes in operating assets and liabilities, net of
    effects from acquisitions as shown in the
    Statement of Cash Flows

     

     

    (5,508

     

    )

       

     

    (15

     

    )

    Total adjustments   17,348       12,939  
    GAAP Net cash provided by operating activities 43,521 29,671
    Purchases of property and equipment   (780 )     (496 )
    Non-GAAP Free Cash Flow $ 42,741     $ 29,175  
     

    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 transition   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 Free Cash Flow:

     

    2016
    Projected
    Free Cash
    Flow

    (In millions)
    Projected FY'16 GAAP Net cash provided by operating activities $ 181
    Additions to property and equipment for cash   (6 )
    Projected Non-GAAP Free Cash Flow $ 175  
     

    Source: Prestige Brands Holdings, Inc.

    Investors:
    Prestige Brands Holdings, Inc.
    Dean Siegal, 914-524-6819
    or
    ICR
    John Mills, 646-277-1254
    John.mills@icrinc.com

    Primary IR Contact

    Irinquiries@prestigebrands.com
    Prestige Brands Holdings, Inc.
    660 White Plains Road – Ste 250
    Tarrytown, NY 10591
    Telephone: 914-524-6819

    Transfer Agent

    AST
    6201 15th Avenue
    Brooklyn, NY 11219
    Telephone: (800) 937-5449
    help@astfinancial.com
    https://www.astfinancial.com

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