News Releases
-
Q2 Revenues Up 4.4% to
$215.1 Million ; First Half Year Revenues Up 6.6% -
Q2 EPS of
$0.60 ; Non-GAAP Adjusted EPS Increased 5.0% to$0.63 -
Q2 Net Cash Provided by Operating Activities Up 5.2% to
$49.5 Million -
Debt Reduced by
$100.5 Million in Q2 - Outlook Reaffirmed for Full Year FY’17 Revenue, Non-GAAP Adjusted EPS & Non-GAAP Adjusted Free Cash Flow
“We are pleased with the results of the second fiscal quarter, which
reflect record quarterly sales, continued strong adjusted earnings per
share, free cash flow growth and debt repayment of more than
Second Fiscal Quarter and First Half of Fiscal 2017 Ended
Reported revenues for the second quarter of fiscal 2017 were
Reported net income for the second quarter of fiscal 2017 totaled
Reported net income for the first six months of fiscal 2017 totaled
Free Cash Flow & Balance Sheet
The Company's reported net cash provided by operating activities for the
second fiscal quarter increased 5.2% to
For the first six months of fiscal 2017, net cash provided by operating
activities increased 10.7% to
The Company's net debt at
Segment Review
Reported revenues for the
Reported revenues for the
Reported revenues for the Household Cleaning segment were
Commentary and Outlook
“The strength of our diverse domestic and international product
portfolio combined with continued consumption growth are offsetting
retailer headwinds in the U.S., enabling us to reiterate our full year
fiscal guidance and positioning us for another year of solid top and
bottom line results,” Mr. Lombardi said. “We expect full year revenue
growth of 4.5-6%, and anticipate adjusted EPS in the range of
Q2 Conference Call & Accompanying Slide Presentation
The Company will host a conference call to review its first quarter
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
healthcare 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
"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 adjusted free cash flow, and
the Company’s ability to gain market share and meet organic growth
targets. 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
Prestige Brands Holdings, Inc. Consolidated Statements of Income and Comprehensive Income (Unaudited) |
|||||||||||||||||
Three Months Ended September 30, | Six Months Ended September 30, | ||||||||||||||||
(In thousands, except per share data) |
2016 | 2015 | 2016 | 2015 | |||||||||||||
Revenues | |||||||||||||||||
Net sales | $ | 215,017 | $ | 205,262 | $ | 423,787 | $ | 396,549 | |||||||||
Other revenues | 35 | 803 | 840 | 1,648 | |||||||||||||
Total revenues | 215,052 | 206,065 | 424,627 | 398,197 | |||||||||||||
Cost of Sales | |||||||||||||||||
Cost of sales (exclusive of depreciation shown below) | 91,087 | 86,125 | 179,071 | 166,021 | |||||||||||||
Gross profit | 123,965 | 119,940 | 245,556 | 232,176 | |||||||||||||
Operating Expenses | |||||||||||||||||
Advertising and promotion | 28,592 | 27,893 | 56,227 | 54,315 | |||||||||||||
General and administrative | 18,795 | 16,462 | 38,252 | 34,051 | |||||||||||||
Depreciation and amortization | 6,016 | 5,687 | 12,848 | 11,407 | |||||||||||||
(Gain) loss on sales of assets | (496 | ) | — | 54,957 | — | ||||||||||||
Total operating expenses | 52,907 | 50,042 | 162,284 | 99,773 | |||||||||||||
Operating income | 71,058 | 69,898 | 83,272 | 132,403 | |||||||||||||
Other (income) expense | |||||||||||||||||
Interest income | (46 | ) | (33 | ) | (103 | ) | (60 | ) | |||||||||
Interest expense | 20,876 | 20,700 | 42,060 | 42,611 | |||||||||||||
Loss on extinguishment of debt | — | — | — | 451 | |||||||||||||
Total other expense | 20,830 | 20,667 | 41,957 | 43,002 | |||||||||||||
Income before income taxes | 50,228 | 49,231 | 41,315 | 89,401 | |||||||||||||
Provision for income taxes | 18,033 | 17,428 | 14,651 | 31,425 | |||||||||||||
Net income | $ | 32,195 | $ | 31,803 | $ | 26,664 | $ | 57,976 | |||||||||
Earnings per share: | |||||||||||||||||
Basic | $ | 0.61 | $ | 0.60 | $ | 0.50 | $ | 1.10 | |||||||||
Diluted | $ | 0.60 | $ | 0.60 | $ | 0.50 | $ | 1.09 | |||||||||
Weighted average shares outstanding: | |||||||||||||||||
Basic | 52,993 | 52,803 | 52,941 | 52,676 | |||||||||||||
Diluted | 53,345 | 53,151 | 53,329 | 53,055 | |||||||||||||
Comprehensive income, net of tax: | |||||||||||||||||
Currency translation adjustments | 2,703 | (11,079 | ) | (3,121 | ) | (11,484 | ) | ||||||||||
Total other comprehensive (loss) income | 2,703 | (11,079 | ) | (3,121 | ) | (11,484 | ) | ||||||||||
Comprehensive income | $ | 34,898 | $ | 20,724 | $ | 23,543 | $ | 46,492 | |||||||||
Prestige Brands Holdings, Inc. Consolidated Balance Sheets (Unaudited) |
|||||||
(In thousands) |
September 30, | March 31, | |||||
Assets |
2016 | 2016 | |||||
Current assets | |||||||
Cash and cash equivalents | $ | 30,458 | $ | 27,230 | |||
Accounts receivable, net | 92,869 | 95,247 | |||||
Inventories | 97,959 | 91,263 | |||||
Deferred income tax assets | 10,646 | 10,108 | |||||
Prepaid expenses and other current assets | 11,341 | 25,165 | |||||
Assets held for sale | 36,400 | — | |||||
Total current assets | 279,673 | 249,013 | |||||
Property and equipment, net | 13,732 | 15,540 | |||||
Goodwill | 351,662 | 360,191 | |||||
Intangible assets, net | 2,181,128 | 2,322,723 | |||||
Other long-term assets | 4,783 | 1,324 | |||||
Total Assets | $ | 2,830,978 | $ | 2,948,791 | |||
Liabilities and Stockholders' Equity | |||||||
Current liabilities | |||||||
Accounts payable | $ | 39,041 | $ | 38,296 | |||
Accrued interest payable | 8,264 | 8,664 | |||||
Other accrued liabilities | 67,006 | 59,724 | |||||
Total current liabilities | 114,311 | 106,684 | |||||
Long-term debt | |||||||
Principal amount | 1,502,000 | 1,652,500 | |||||
Less unamortized debt costs | (22,337 | ) | (27,191 | ) | |||
Long-term debt, net | 1,479,663 | 1,625,309 | |||||
Deferred income tax liabilities | 459,527 | 469,622 | |||||
Other long-term liabilities | 2,837 | 2,840 | |||||
Total Liabilities | 2,056,338 | 2,204,455 | |||||
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 - 53,265 shares at September 30, 2016 and 53,066 shares at March 31, 2016 | 532 | 530 | |||||
Additional paid-in capital | 453,336 | 445,182 | |||||
Treasury stock, at cost - 331 shares at September 30, 2016 and 306 shares at March 31, 2016 | (6,558 | ) | (5,163 | ) | |||
Accumulated other comprehensive loss, net of tax | (26,646 | ) | (23,525 | ) | |||
Retained earnings | 353,976 | 327,312 | |||||
Total Stockholders' Equity | 774,640 | 744,336 | |||||
Total Liabilities and Stockholders' Equity | $ | 2,830,978 | $ | 2,948,791 |
Prestige Brands Holdings, Inc. Consolidated Statements of Cash Flows (Unaudited) |
|||||||
Six Months Ended September 30, | |||||||
(In thousands) |
2016 | 2015 | |||||
Operating Activities | |||||||
Net income | $ | 26,664 | $ | 57,976 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Depreciation and amortization | 12,848 | 11,407 | |||||
Loss (gain) on sales of intangible assets and property and equipment | 55,112 | (36 | ) | ||||
Deferred income taxes | (10,602 | ) | 21,985 | ||||
Amortization of debt origination costs | 5,097 | 4,055 | |||||
Stock-based compensation costs | 3,933 | 5,034 | |||||
Loss on extinguishment of debt | — | 451 | |||||
Changes in operating assets and liabilities, net of effects from acquisitions | |||||||
Accounts receivable | 356 | (3,918 | ) | ||||
Inventories | (10,663 | ) | (3,838 | ) | |||
Prepaid expenses and other current assets | 10,112 | 3,436 | |||||
Accounts payable | 820 | (4,519 | ) | ||||
Accrued liabilities | 6,605 | (1,443 | ) | ||||
Net cash provided by operating activities | 100,282 | 90,590 | |||||
Investing Activities | |||||||
Purchases of property and equipment | (1,404 | ) | (1,683 | ) | |||
Proceeds from sales of intangible assets | 52,353 | — | |||||
Proceeds from the sale of property and equipment | 75 | 344 | |||||
Net cash provided by (used in) investing activities | 51,024 | (1,339 | ) | ||||
Financing Activities | |||||||
Term loan repayments | (130,500 | ) | (50,000 | ) | |||
Borrowings under revolving credit agreement | 20,000 | 15,000 | |||||
Repayments under revolving credit agreement | (40,000 | ) | (55,000 | ) | |||
Payments of debt origination costs | (9 | ) | (4,211 | ) | |||
Proceeds from exercise of stock options | 3,423 | 6,398 | |||||
Proceeds from restricted stock exercises | — | 544 | |||||
Excess tax benefits from share-based awards | 800 | 1,850 | |||||
Fair value of shares surrendered as payment of tax withholding | (1,395 | ) | (2,187 | ) | |||
Net cash used in financing activities | (147,681 | ) | (87,606 | ) | |||
Effects of exchange rate changes on cash and cash equivalents | (397 | ) | (811 | ) | |||
Increase in cash and cash equivalents | 3,228 | 834 | |||||
Cash and cash equivalents - beginning of period | 27,230 | 21,318 | |||||
Cash and cash equivalents - end of period | $ | 30,458 | $ | 22,152 | |||
Interest paid | $ | 37,259 | $ | 40,550 | |||
Income taxes paid | $ | 6,743 | $ | 3,707 |
Prestige Brands Holdings, Inc. Consolidated Statements of Income Business Segments (Unaudited) |
|||||||||||||||||
Three Months Ended September 30, 2016 | |||||||||||||||||
(In thousands) |
North American |
International |
Household
Cleaning |
Consolidated | |||||||||||||
Gross segment revenues | $ | 172,590 | $ | 18,802 | $ | 23,768 | $ | 215,160 | |||||||||
Elimination of intersegment revenues | (143 | ) | — | — | (143 | ) | |||||||||||
Third-party segment revenues | 172,447 | 18,802 | 23,768 | 215,017 | |||||||||||||
Other revenues | — | 2 | 33 | 35 | |||||||||||||
Total segment revenues | 172,447 | 18,804 | 23,801 | 215,052 | |||||||||||||
Cost of sales | 65,402 | 7,096 | 18,589 | 91,087 | |||||||||||||
Gross profit | 107,045 | 11,708 | 5,212 | 123,965 | |||||||||||||
Advertising and promotion | 24,811 | 3,244 | 537 | 28,592 | |||||||||||||
Contribution margin | $ | 82,234 | $ | 8,464 | $ | 4,675 | 95,373 | ||||||||||
Other operating expenses* | 24,315 | ||||||||||||||||
Operating income | 71,058 | ||||||||||||||||
Other expense | 20,830 | ||||||||||||||||
Income before income taxes | 50,228 | ||||||||||||||||
Provision for income taxes | 18,033 | ||||||||||||||||
Net income | $ | 32,195 | |||||||||||||||
*Other operating expenses for the three months ended September 30, 2016 includes a pre-tax loss on sale of assets of $0.7 million related to Pediacare, New Skin, and Fiber Choice and a pre-tax gain on sale of assets of $1.2 million associated with the sale of license rights in certain geographic areas pertaining to Comet. The assets and corresponding contribution margin associated with the pre-tax loss on sale of assets related to Pediacare, New Skin, and Fiber Choice are included within the North American OTC Healthcare segment, while the pre-tax gain on sale of license rights related to Comet are included in the Household Cleaning segment. |
Six Months Ended September 30, 2016 | |||||||||||||||||
(In thousands) |
North American |
International |
Household
Cleaning |
Consolidated | |||||||||||||
Gross segment revenues | $ | 345,891 | $ | 34,602 | $ | 44,658 | $ | 425,151 | |||||||||
Elimination of intersegment revenues | (1,364 | ) | — | — | (1,364 | ) | |||||||||||
Third-party segment revenues | 344,527 | 34,602 | 44,658 | 423,787 | |||||||||||||
Other revenues | — | 6 | 834 | 840 | |||||||||||||
Total segment revenues | 344,527 | 34,608 | 45,492 | 424,627 | |||||||||||||
Cost of sales | 129,636 | 14,044 | 35,391 | 179,071 | |||||||||||||
Gross profit | 214,891 | 20,564 | 10,101 | 245,556 | |||||||||||||
Advertising and promotion | 49,851 | 5,368 | 1,008 | 56,227 | |||||||||||||
Contribution margin | $ | 165,040 | $ | 15,196 | $ | 9,093 | 189,329 | ||||||||||
Other operating expenses* | 106,057 | ||||||||||||||||
Operating income | 83,272 | ||||||||||||||||
Other expense | 41,957 | ||||||||||||||||
Income before income taxes | 41,315 | ||||||||||||||||
Provision for income taxes | 14,651 | ||||||||||||||||
Net income | $ | 26,664 | |||||||||||||||
*Other operating expenses for the six months ended September 30, 2016 includes a pre-tax loss on sale of assets of $56.2 million related to Pediacare, New Skin, and Fiber Choice and a pre-tax gain on sale of assets of $1.2 million associated with the sale of license rights in certain geographic areas pertaining to Comet. The assets and corresponding contribution margin associated with the pre-tax loss on sale of assets related to Pediacare, New Skin, and Fiber Choice are included within the North American OTC Healthcare segment, while the pre-tax gain on sale of license rights related to Comet are included in the Household Cleaning segment. |
Three Months Ended September 30, 2015 | |||||||||||||||||
(In thousands) |
North American |
International |
Household Cleaning |
Consolidated | |||||||||||||
Gross segment revenues | $ | 166,886 | $ | 15,954 | $ | 23,894 | $ | 206,734 | |||||||||
Elimination of intersegment revenues | (1,472 | ) | — | — | (1,472 | ) | |||||||||||
Third-party segment revenues | 165,414 | 15,954 | 23,894 | 205,262 | |||||||||||||
Other revenues** | — | 6 | 797 | 803 | |||||||||||||
Total segment revenues | 165,414 | 15,960 | 24,691 | 206,065 | |||||||||||||
Cost of sales** | 61,497 | 6,094 | 18,534 | 86,125 | |||||||||||||
Gross profit | 103,917 | 9,866 | 6,157 | 119,940 | |||||||||||||
Advertising and promotion | 24,440 | 2,777 | 676 | 27,893 | |||||||||||||
Contribution margin | $ | 79,477 | $ | 7,089 | $ | 5,481 | 92,047 | ||||||||||
Other operating expenses | 22,149 | ||||||||||||||||
Operating income | 69,898 | ||||||||||||||||
Other expense | 20,667 | ||||||||||||||||
Income before income taxes | 49,231 | ||||||||||||||||
Provision for income taxes | 17,428 | ||||||||||||||||
Net income | $ | 31,803 | |||||||||||||||
Six Months Ended September 30, 2015 | |||||||||||||||||
(In thousands) |
North American |
International |
Household Cleaning |
Consolidated | |||||||||||||
Gross segment revenues | $ | 323,978 | $ | 29,410 | $ | 45,361 | $ | 398,749 | |||||||||
Elimination of intersegment revenues | (2,200 | ) | — | — | (2,200 | ) | |||||||||||
Third-party segment revenues | 321,778 | 29,410 | 45,361 | 396,549 | |||||||||||||
Other revenues** | 15 | 31 | 1,602 | 1,648 | |||||||||||||
Total segment revenues | 321,793 | 29,441 | 46,963 | 398,197 | |||||||||||||
Cost of sales** | 119,624 | 11,383 | 35,014 | 166,021 | |||||||||||||
Gross profit | 202,169 | 18,058 | 11,949 | 232,176 | |||||||||||||
Advertising and promotion | 47,635 | 5,500 | 1,180 | 54,315 | |||||||||||||
Contribution margin | $ | 154,534 | $ | 12,558 | $ | 10,769 | 177,861 | ||||||||||
Other operating expenses | 45,458 | ||||||||||||||||
Operating income | 132,403 | ||||||||||||||||
Other expense | 43,002 | ||||||||||||||||
Income before income taxes | 89,401 | ||||||||||||||||
Provision for income taxes | 31,425 | ||||||||||||||||
Net income | $ | 57,976 |
**Certain immaterial amounts relating to other revenues and cost of sales for each of the three and six months ended September 30, 2015 were reclassified between the International OTC Healthcare segment and the North American OTC Healthcare segment. There were no changes to the consolidated financial statements for any periods presented. |
About Non-GAAP Financial Measures
We have pursued various strategic initiatives and completed a number of acquisitions in recent years that have resulted in revenues that would not have otherwise been recognized. The frequency and the amount of such revenues vary significantly based on the size, timing and complexity of the transaction. In addition to financial results reported in accordance with GAAP, we disclose certain Non-GAAP financial measures ("NGFMs"), including, but not limited to, Non-GAAP Organic Revenues, Non-GAAP Organic Revenues on a Constant Currency basis, Non-GAAP Adjusted General and Administrative expenses, Non-GAAP Adjusted General and Administrative expense percentage, Non-GAAP EBITDA, Non-GAAP Adjusted EBITDA, Non-GAAP Adjusted EBITDA Margin, Non-GAAP Adjusted Net Income, Non-GAAP Adjusted EPS, Non-GAAP Free Cash Flow, and Non-GAAP Adjusted Free Cash Flow. We use these NGFMs internally, along with GAAP information, in evaluating our operating performance and in making financial and operational decisions. We believe that the presentation of these NGFMs provides investors with greater transparency, and provides a more complete understanding of our business than could be obtained absent these disclosures, because the supplemental data relating to our financial condition and results of operations provides additional ways to view our operation when considered with both our GAAP results and the reconciliations below. In addition, we believe that the presentation of each of these NGFMs is useful to investors for period-to-period comparisons of results in assessing shareholder value, and we use these NGFMs internally to evaluate the performance of our personnel and also to evaluate our operating performance and compare our performance to that of our competitors.
These NGFMs are not in accordance with GAAP, should not be considered as a measure of profitability or liquidity, and may not be directly comparable to similarly titled NGFMs reported by other companies. These NGFMs have limitations and they should not be considered in isolation from or as an alternative to their most closely related GAAP measures reconciled below. Investors should not rely on any single financial measure when evaluating our business. We recommend investors review the GAAP financial measures included in this earnings release. When viewed in conjunction with our GAAP results and the reconciliations below, we believe these NGFMs provide greater transparency and a more complete understanding of factors affecting our business than GAAP measures alone.
NGFMs Defined
We define our NGFMs presented herein as follows:
- Non-GAAP Organic Revenues: GAAP Total Revenues excluding revenues associated with products acquired or divested in the periods presented.
- Non-GAAP Organic Revenues on a Constant Currency basis: Non-GAAP Organic Revenues excluding the impact of current year foreign exchange rates on total revenues.
- Non-GAAP Adjusted General and Administrative expenses: GAAP General and Administrative expenses minus certain other legal and professional fees, acquisition and other integration costs, divestiture costs, and costs associated with our CEO transition.
- Non-GAAP Adjusted General and Administrative expense percentage: Calculated as Non-GAAP Adjusted General and Administrative expense divided by GAAP Total Revenues.
- Non-GAAP EBITDA: GAAP Net Income less interest expense (income), income taxes, and depreciation and amortization.
- Non-GAAP Adjusted EBITDA: Non-GAAP EBITDA less certain other legal and professional fees, other acquisition-related costs, divestiture costs, costs associated with our CEO transition, loss on extinguishment of debt, and gain/loss on sale of assets.
- Non-GAAP Adjusted EBITDA Margin: Calculated as Non-GAAP Adjusted EBITDA divided by GAAP Total Revenues.
- Non-GAAP Adjusted Net Income: GAAP Net Income before certain other legal and professional fees, other acquisition and integration-related costs, divestiture costs, costs associated with our CEO transition, accelerated amortization of debt origination costs due to sale of assets, loss on extinguishment of debt, gain/loss on sale of assets and the applicable tax impacts associated with these items and other non-deductible items.
- Non-GAAP Adjusted EPS: Calculated as Non-GAAP Adjusted Net Income, divided by the weighted average number of common and potential common shares outstanding during the period.
- Non-GAAP Free Cash Flow: GAAP Net cash provided by operating activities less cash paid for capital expenditures.
- Non-GAAP Adjusted Free Cash Flow: Non-GAAP Free Cash Flow plus cash payments made for integration, transition, and other costs associated with acquisitions and divestitures.
The following tables set forth the reconciliations of each of our NGFMs to their 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
September 30, |
Six Months Ended
September 30, |
||||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||||
(In thousands) |
|||||||||||||||||
GAAP Total Revenues | $ | 215,052 | $ | 206,065 | $ | 424,627 | $ | 398,197 | |||||||||
Revenue Growth | 4.4 | % | 6.6 | % | |||||||||||||
Adjustments: |
|||||||||||||||||
DenTek revenues (1) | (17,214 | ) | — | (33,841 | ) | — | |||||||||||
Revenues associated with divested brands(2) | — | (6,922 | ) | — | (6,922 | ) | |||||||||||
Total adjustments | (17,214 | ) | (6,922 | ) | (33,841 | ) | (6,922 | ) | |||||||||
Non-GAAP Organic Revenues | 197,838 | 199,143 | 390,786 | 391,275 | |||||||||||||
Organic Revenue Growth (Decline) | (0.7 | )% | (0.1 | )% | |||||||||||||
Impact of foreign currency exchange rates (3) | (76 | ) | (905 | ) | |||||||||||||
Non-GAAP Organic Revenues on a constant currency basis | $ | 197,838 | $ | 199,067 | $ | 390,786 | $ | 390,370 | |||||||||
Constant Currency Organic Revenue Growth | (0.6 | )% | 0.1 | % |
(1) DenTek revenues are excluded for purposes of calculating Non-GAAP organic revenues. These revenue adjustments relate to our North American and International OTC Healthcare segment. |
(2) Revenues of our divested brands have been excluded from the prior year for purposes of calculating Non-GAAP organic revenues. These revenue adjustments relate to our North American OTC Healthcare segment. |
(3) Foreign currency exchange rate adjustments relate to all segments. |
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
September 30, |
Six Months Ended September 30, |
||||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||||
(In thousands) |
|||||||||||||||||
GAAP General and Administrative Expense | $ | 18,795 | $ | 16,462 | $ | 38,252 | $ | 34,051 | |||||||||
Adjustments: |
|||||||||||||||||
Costs associated with CEO transition (1) | — | — | — | 1,406 | |||||||||||||
Legal and professional fees associated with acquisitions and divestitures (2) | 101 | — | 585 | — | |||||||||||||
Integration, transition and other costs associated with acquisitions and divestitures (2) | 1,420 | — | 3,061 | — | |||||||||||||
Total adjustments | 1,521 | — | 3,646 | 1,406 | |||||||||||||
Non-GAAP Adjusted General and Administrative Expense | $ | 17,274 | $ | 16,462 | $ | 34,606 | $ | 32,645 | |||||||||
Non-GAAP Adjusted General and Administrative Expense Percentage | 8.0 | % | 8.0 | % | 8.1 | % | 8.2 | % | |||||||||
(1) Costs relate to search fees associated with CEO and CFO transition and certain accelerated stock compensation costs related to our former CEO. |
(2) Acquisition related items represent costs related to integrating recently acquired businesses including (but not limited to), costs to exit or convert contractual obligations, severance, information system conversion and consulting costs; and certain costs related to the consummation of the acquisition process such as legal and other acquisition related professional fees. |
Reconciliation of GAAP Net Income to Non-GAAP EBITDA, Non-GAAP Adjusted EBITDA and related Non-GAAP Adjusted EBITDA Margin:
Three Months Ended
September 30, |
Six Months Ended September 30, |
||||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||||
(In thousands) |
|||||||||||||||||
GAAP Net Income | $ | 32,195 | $ | 31,803 | $ | 26,664 | $ | 57,976 | |||||||||
Interest expense, net | 20,830 | 20,667 | 41,957 | 42,551 | |||||||||||||
Provision for income taxes | 18,033 | 17,428 | 14,651 | 31,425 | |||||||||||||
Depreciation and amortization | 6,016 | 5,687 | 12,848 | 11,407 | |||||||||||||
Non-GAAP EBITDA: | 77,074 | 75,585 | 96,120 | 143,359 | |||||||||||||
Adjustments: |
|||||||||||||||||
Costs associated with CEO transition (1) | — | — | — | 1,406 | |||||||||||||
Legal and professional fees associated with acquisitions and divestitures (2) | 101 | — | 585 | — | |||||||||||||
Integration, transition and other costs associated with acquisitions and divestitures (2) | 1,420 | — | 3,061 | — | |||||||||||||
Loss on extinguishment of debt | — | — | — | 451 | |||||||||||||
(Gain) loss on sale of assets | (496 | ) | — | 54,957 | — | ||||||||||||
Total adjustments | 1,025 | — | 58,603 | 1,857 | |||||||||||||
Non-GAAP Adjusted EBITDA | $ | 78,099 | $ | 75,585 | $ | 154,723 | $ | 145,216 | |||||||||
Non-GAAP Adjusted EBITDA Margin | 36.3 | % | 36.7 | % | 36.4 | % | 36.5 | % | |||||||||
(1) Costs relate to search fees associated with CEO and CFO transition and certain accelerated stock compensation costs related to our former CEO. |
(2) Acquisition related items represent costs related to integrating recently acquired businesses including (but not limited to), costs to exit or convert contractual obligations, severance, information system conversion and consulting costs; and certain costs related to the consummation of the acquisition process such as legal and other acquisition related professional fees. |
Reconciliation of GAAP Net Income to Non-GAAP Adjusted Net Income and related Adjusted Earnings Per Share:
Three Months Ended September 30, | Six Months Ended September 30, | |||||||||||||||||||||||||||
2016 | 2016 Adjusted EPS | 2015 | 2015 Adjusted EPS | 2016 | 2016 Adjusted EPS | 2015 | 2015 Adjusted EPS | |||||||||||||||||||||
(In thousands) |
||||||||||||||||||||||||||||
GAAP Net Income | $ | 32,195 | $ | 0.60 | $ | 31,803 | $ | 0.60 | $ | 26,664 | $ | 0.50 | $ | 57,976 | $ | 1.09 | ||||||||||||
Adjustments: |
||||||||||||||||||||||||||||
Costs associated with CEO transition (1) | — | — | — | — | — | — | 1,406 | 0.03 | ||||||||||||||||||||
Legal and professional fees associated with acquisitions and
divestitures (2) |
101 | — | — | — | 585 | 0.01 | — | — | ||||||||||||||||||||
Integration, transition and other costs associated with acquisitions and divestitures (2) | 1,420 | 0.03 | — | — | 3,061 | 0.06 | — | — | ||||||||||||||||||||
Accelerated amortization of debt origination costs due to sale of assets | 1,131 | 0.02 | — | — | 1,131 | 0.02 | — | — | ||||||||||||||||||||
Loss on extinguishment of debt | — | — | — | — | — | — | 451 | 0.01 | ||||||||||||||||||||
(Gain) loss on sale of assets | (496 | ) | (0.01 | ) | — | — | 54,957 | 1.03 | — | — | ||||||||||||||||||
Tax impact of adjustments (3) | (566 | ) | (0.01 | ) | — | — | (21,224 | ) | (0.40 | ) | (657 | ) | (0.01 | ) | ||||||||||||||
Total adjustments | 1,590 | 0.03 | — | — | 38,510 | 0.72 | 1,200 | 0.03 | ||||||||||||||||||||
Non-GAAP Adjusted Net Income
and Adjusted EPS |
$ | 33,785 | $ | 0.63 | $ | 31,803 | $ | 0.60 | $ | 65,174 | $ | 1.22 | $ | 59,176 | $ | 1.12 | ||||||||||||
(1) Costs relate to search fees associated with CEO and CFO transition and certain accelerated stock compensation costs related to our former CEO. |
(2) Acquisition related items represent costs related to integrating recently acquired businesses including (but not limited to), costs to exit or convert contractual obligations, severance, information system conversion and consulting costs; and certain costs related to the consummation of the acquisition process such as legal and other acquisition related professional fees. |
(3) The income tax adjustments are determined using applicable rates in the taxing jurisdictions in which the above adjustments relate and includes both current and deferred income tax expense (benefit) based on the specific nature of the specific Non-GAAP performance measure. |
Reconciliation of GAAP Net Income to Non-GAAP Free Cash Flow and Non-GAAP Adjusted Free Cash Flow:
Three Months Ended
September 30, |
Six Months Ended September 30, |
||||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||||
(In thousands) |
|||||||||||||||||
GAAP Net Income | $ | 32,195 | $ | 31,803 | $ | 26,664 | $ | 57,976 | |||||||||
Adjustments: |
|||||||||||||||||
Adjustments to reconcile net income to net cash |
9,592 | 20,040 | 66,388 | 42,896 | |||||||||||||
Changes in operating assets and liabilities, net of |
7,744 | (4,774 | ) | 7,230 | (10,282 | ) | |||||||||||
Total adjustments | 17,336 | 15,266 | 73,618 | 32,614 | |||||||||||||
GAAP Net cash provided by operating activities | 49,531 | 47,069 | 100,282 | 90,590 | |||||||||||||
Purchases of property and equipment | (509 | ) | (903 | ) | (1,404 | ) | (1,683 | ) | |||||||||
Non-GAAP Free Cash Flow | 49,022 | 46,166 | 98,878 | 88,907 | |||||||||||||
Integration, transition and other payments |
352 | — | 683 | — | |||||||||||||
Non-GAAP Adjusted Free Cash Flow | $ | 49,374 | $ | 46,166 | $ | 99,561 | $ | 88,907 |
(1) Acquisition related items represent payments related to integrating recently acquired businesses including (but not limited to), costs to exit or convert contractual obligations, severance, information system conversion and consulting costs; and certain costs related to the consummation of the acquisition process such as legal and other acquisition related professional fees. |
Outlook for Fiscal Year 2017:
Reconciliation of Projected GAAP EPS to Projected Non-GAAP Adjusted EPS:
2017 Projected EPS | ||||||||
Low | High | |||||||
Projected FY'17 GAAP EPS | $ | 1.55 | $ | 1.61 | ||||
Adjustments: |
||||||||
Costs associated with DenTek integration(1) | 0.08 | 0.08 | ||||||
Loss on sale of assets | 0.67 | 0.67 | ||||||
Total Adjustments | 0.75 | 0.75 | ||||||
Projected Non-GAAP Adjusted EPS | $ | 2.30 | $ | 2.36 |
(1) Acquisition related items represent costs related to integrating recently acquired businesses including (but not limited to), costs to exit or convert contractual obligations, severance, information system conversion and consulting costs; and certain costs related to the consummation of the acquisition process such as legal and other acquisition related professional fees. |
Reconciliation of Projected GAAP Net cash provided by operating activities to Projected Non-GAAP Adjusted Free Cash Flow:
2017 Projected Free Cash Flow | |||||
(In millions) |
|||||
Projected FY'17 GAAP Net cash provided by operating activities | $ | 191 | |||
Additions to property and equipment for cash | (4 | ) | |||
Projected Non-GAAP Free Cash Flow | 187 | ||||
Payments associated with acquisitions(1) | 3 | ||||
Projected Non-GAAP Adjusted Free Cash Flow | $ | 190 |
(1) Acquisition related items represent costs related to integrating recently acquired businesses including (but not limited to), costs to exit or convert contractual obligations, severance, information system conversion and consulting costs; and certain costs related to the consummation of the acquisition process such as legal and other acquisition related professional fees. |
View source version on businesswire.com: http://www.businesswire.com/news/home/20161103005486/en/
Source:
Prestige Brands Holdings, Inc.
Dean Siegal, 914-524-6819