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    Prestige Brands Holdings, Inc. Reports Fiscal 2019 First Quarter Results; Announces Name Change to Prestige Consumer Healthcare, Inc.
    • Revenue was $254.0 Million in Q1 Fiscal 2019, In-Line with Previously Announced Expectation
    • GAAP EPS Increased 3% to $0.65; Adjusted EPS Increased 3% to $0.68
    • Cash Flow From Operations Increased to $55.9 Million in Q1; Adjusted Free Cash Flow of $53.6 Million
    • FY’19 Outlook Updated to Reflect Divestiture of the Household Cleaning Segment
    • Company Announces Name Change to Prestige Consumer Healthcare, Inc.

    TARRYTOWN, N.Y., Aug. 02, 2018 (GLOBE NEWSWIRE) -- Prestige Brands Holdings, Inc. (NYSE:PBH) today reported financial results for its first quarter ended June 30, 2018.  In addition, the Company announced its planned name change to Prestige Consumer Healthcare, Inc. to reflect its expanding consumer healthcare business and the evolution of its portfolio.  The Company will continue to trade under the ticker symbol “PBH”.

    “Our first quarter performance delivered a solid start to the year, with both financial and operating metrics aligned with our expectations.  We are also pleased with the recent divestiture of our Household Cleaning segment, which enables our Company to focus entirely on our strong consumer healthcare brands that are well positioned for long-term success,” said Ron Lombardi, Chief Executive Officer of Prestige Brands.

    First Fiscal Quarter Ended June 30, 2018
    Reported revenues in the first quarter of fiscal 2019 decreased 1.0% to $254.0 million, compared to $256.6 million in the first quarter of fiscal 2018.  Revenues for the quarter were driven by continued strong consumption levels across the Company’s core brands, but were offset by the previously announced change in accounting policies around revenue recognition and the timing of related expenses as well as timing related to the launch of new packaging for the Company’s BC and Goody’s brands.

    Reported gross profit margin in the first quarter fiscal 2019 was 55.4%, compared to 55.9% for the first quarter of fiscal 2018.  Sequentially, gross margin improved from 55.2% reported in fourth quarter fiscal 2018 as the Company continues to make progress in its freight and warehousing initiatives.

    Reported net income for the first quarter of fiscal 2019 totaled $34.5 million versus the prior year comparable quarter’s net income of $33.8 million. Diluted earnings per share were $0.65 for the first quarter of fiscal 2019 compared to $0.63 diluted earnings per share in the prior year comparable period. Non-GAAP adjusted net income for the first quarter of fiscal 2019 was $35.8 million, an increase of 1.0% over the prior year period’s adjusted net income of $35.5 million. Non-GAAP adjusted earnings per share were $0.68 per share for the first quarter of fiscal 2019 compared to $0.66 per share in the prior year comparable period.

    Adjustments to net income in the first quarter of fiscal 2019 and fiscal 2018 include integration, transition, purchase accounting, legal and various other costs associated with acquisitions and divestitures, and the related income tax effects of the adjustments.

    Free Cash Flow and Balance Sheet
    The Company's net cash provided by operating activities for the first fiscal quarter of 2019 increased to $55.9 million from $54.1 million during the same period a year earlier. Non-GAAP adjusted free cash flow for the first fiscal quarter of 2019 was $53.6 million, compared to $56.5 million in the prior year comparable quarter.

    In the first quarter fiscal 2019, the Company completed its previously announced share repurchase authorization, repurchasing approximately 1.4 million shares at a total investment of $50.0 million.  The Company's net debt position as of June 30, 2018 was approximately $2.0 billion, effectively flat versus the prior quarter as first quarter 2019 cash generation went towards the share repurchase.  At June 30, 2018 the Company's covenant-defined leverage ratio was approximately 5.4x.

    Segment Review
    North American OTC Healthcare: Segment revenues totaled $214.8 million for the first quarter of fiscal 2019, compared to the prior year comparable quarter's revenues of $215.8 million. The first quarter fiscal 2019 result was favorably impacted by increased consumption among the majority of core OTC brands, but offset by the impact of a change in accounting policies surrounding revenue recognition and variability around the timing of BC and Goody’s brands shipments due to the launch of new packaging.

    International OTC Healthcare: Segment fiscal first quarter 2019 revenues totaled $19.4 million versus $20.9 million reported in the prior year comparable period.  The change compared to the prior year was largely due to timing differences in distributor orders and shipments.

    Household Cleaning: Segment revenues totaled $19.8 million for the first quarter of fiscal 2019 compared with first quarter fiscal 2018 revenues of $19.9 million, a decrease of 0.2%.  As previously announced, the Company closed the sale of its Household Cleaning segment for $69.0 million on July 2, 2018.  The company used net proceeds of approximately $50 million from the divestiture to pay down debt.

    Commentary and Outlook for Fiscal 2019
    Ron Lombardi, CEO, stated, “We are pleased with our start to fiscal 2019, including continued improvement against freight and warehousing costs experienced in second half fiscal 2018, continued strong cash generation and a strong revenue performance despite unique near-term timing factors like the launch of BC & Goody’s restaged packaging.  We remain confident in our business performance as well as consumption trends and are well positioned for the remainder of the year.”

    “Our updated fiscal 2019 outlook reflects the divestiture of Household Cleaning but we are otherwise affirming our prior expectations for revenues, profitability and cash flow.  Our recent Household Cleaning divestiture is consistent with our strategic evolution and value creation for shareholders.  Following the divestiture, we are an entirely consumer healthcare-focused company.  Our consumer healthcare platform includes a strong and diverse portfolio of brands well positioned for continued long-term growth.  We remain acutely focused on execution of our three-pillar strategy of brand-building, maintaining a strong financial profile, and capital allocation alternatives.  We look forward to continuing to use this approach to drive shareholder value over time and continue to grow our consumer healthcare platform,” he concluded.

      Fiscal 2019 Full-Year Outlook
    Revenue $985 to $995 million
    Organic Growth Percentage* 0.5% to 1.5%
    Adjusted E.P.S.* $2.84 to $2.92
    Adjusted Free Cash Flow* $205 million or more

    Corporate Name Change
    Ron Lombardi, Chief Executive Officer, stated “The corporate name change is a reflection of the strategic evolution the Company has made over the past decade to grow and focus the portfolio on consumer healthcare products. The new name, Prestige Consumer Healthcare, more accurately reflects our business model and long-term strategic plan to be the market leader in many areas of consumer healthcare.  We are now fully concentrating our brand-building efforts around our leading consumer health brands to support long-term organic growth.”

    Fiscal Q1 Conference Call, Accompanying Slide Presentation and Replay
    The Company will host a conference call to review its first quarter results today, August 2, 2018 at 8:30 a.m. ET. The toll-free dial-in numbers are 844-233-9440 within North America and 574-990-1016 outside of North America. The conference ID number is 2880628. The Company provides 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 www.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 855-859-2056 within North America and at 404-537-3406 from outside North America. The conference ID is 2880628.

    Non-GAAP and Other 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.

    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, earnings per share and free cash flow, the Company’s ability to win market share and increase consumption, the Company's ability to improve freight and warehousing costs, and the Company’s ability to position itself for long-term success and growth.  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 the Company’s advertising and promotional and new product development initiatives, customer inventory management initiatives, general economic and business conditions, fluctuating foreign exchange rates, consumer trends, competitive pressures, and the ability of the Company’s third party manufacturers and logistics providers and suppliers to meet demand for its products and to reduce costs.  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, 2018 and the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2018 and other periodic reports filed with the Securities and Exchange Commission.

    About Prestige Brands Holdings, Inc.
    The Company markets and distributes brand name over-the-counter healthcare products throughout the U.S. and Canada, Australia, and in certain other international markets. The Company’s brands include Monistat® and Summer’s Eve® women's health products, BC® and Goody's® pain relievers, Clear Eyes® eye care products, DenTek® specialty oral care products, Dramamine® motion sickness treatments, Fleet® enemas and glycerin suppositories, Chloraseptic® sore throat treatments, Compound W® wart treatments, Little Remedies® pediatric over-the-counter products, The Doctor's® NightGuard® dental protector, Efferdent® denture care products, Luden's® throat drops, Debrox® earwax remover, Gaviscon® antacid in Canada, and Hydralyte® rehydration products and the Fess® line of nasal and sinus care products in Australia. Visit the Company's website at www.prestigebrands.com.

    * See the “About Non-GAAP Financial Measures” section of this report for further presentation information.

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

      Three Months Ended June 30,
    (In thousands, except per share data) 2018   2017
    Revenues      
    Net sales $ 253,954     $ 256,487  
    Other revenues 26     86  
    Total revenues 253,980     256,573  
           
    Cost of Sales      
    Cost of sales excluding depreciation 112,069     111,757  
    Cost of sales depreciation 1,288     1,340  
    Cost of sales 113,357     113,097  
    Gross profit 140,623     143,476  
           
    Operating Expenses      
    Advertising and promotion 37,111     36,944  
    General and administrative 23,941     20,410  
    Depreciation and amortization 7,084     7,167  
    Total operating expenses 68,136     64,521  
    Operating income 72,487     78,955  
           
    Other (income) expense      
    Interest income (100 )   (69 )
    Interest expense 26,040     26,410  
    Other expense (income), net 87     (74 )
    Total other expense 26,027     26,267  
    Income before income taxes 46,460     52,688  
    Provision for income taxes 11,994     18,929  
    Net income $ 34,466     $ 33,759  
           
    Earnings per share:      
    Basic $ 0.65     $ 0.64  
    Diluted $ 0.65     $ 0.63  
           
    Weighted average shares outstanding:      
    Basic 52,640     53,038  
    Diluted 52,942     53,509  
           
    Comprehensive income, net of tax:      
    Currency translation adjustments (2,974 )   1,119  
    Unrecognized net gain on pension plans     1  
    Total other comprehensive (loss) income (2,974 )   1,120  
    Comprehensive income $ 31,492     $ 34,879  

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

    (In thousands) June 30,
     2018
      March 31,
     2018
           
    Assets      
    Current assets      
    Cash and cash equivalents $ 34,269     $ 32,548  
    Accounts receivable, net of allowance of $13,524 and $12,734, respectively 150,390     140,881  
    Inventories 118,957     118,547  
    Deferred income tax assets     26  
    Prepaid expenses and other current assets 10,862     11,475  
    Total current assets 314,478     303,477  
           
    Property, plant and equipment, net 52,453     52,552  
    Goodwill 612,966     620,098  
    Intangible assets, net 2,722,542     2,780,916  
    Other long-term assets 3,415     3,569  
    Assets held for sale 62,866      
    Total Assets $ 3,768,720     $ 3,760,612  
           
    Liabilities and Stockholders' Equity      
    Current liabilities      
    Accounts payable $ 78,405     $ 61,390  
    Accrued interest payable 13,844     9,708  
    Other accrued liabilities 50,011     52,101  
    Total current liabilities 142,260     123,199  
           
    Long-term debt, net 1,993,803     1,992,952  
    Deferred income tax liabilities 447,855     442,518  
    Other long-term liabilities 23,079     23,333  
    Total Liabilities 2,606,997     2,582,002  
           
           
    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 - 53,603 shares at June 30, 2018 and 53,396 shares at March 31, 2018 536     534  
    Additional paid-in capital 471,318     468,783  
    Treasury stock, at cost - 1,871 shares at June 30, 2018 and 353 shares at March 31, 2018 (59,928 )   (7,669 )
    Accumulated other comprehensive loss, net of tax (22,289 )   (19,315 )
    Retained earnings 772,086     736,277  
    Total Stockholders' Equity 1,161,723     1,178,610  
    Total Liabilities and Stockholders' Equity $ 3,768,720     $ 3,760,612  

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

      Three Months Ended June 30,
    (In thousands) 2018   2017
    Operating Activities      
    Net income $ 34,466     $ 33,759  
    Adjustments to reconcile net income to net cash provided by operating activities:      
    Depreciation and amortization 8,372     8,507  
    Loss on disposal of property and equipment 1     490  
    Deferred income taxes 6,755     9,225  
    Amortization of debt origination costs 920     1,746  
    Excess tax benefits from share-based awards     302  
    Stock-based compensation costs 1,657     1,713  
    Changes in operating assets and liabilities:      
    Accounts receivable (4,357 )   1,543  
    Inventories (9,303 )   (2,899 )
    Prepaid expenses and other current assets 623     9,604  
    Accounts payable 16,479     (8,024 )
    Accrued liabilities 347     (1,558 )
    Other (108 )   (287 )
    Net cash provided by operating activities 55,852     54,121  
           
    Investing Activities      
    Purchases of property, plant and equipment (2,469 )   (2,554 )
    Acquisition of Fleet escrow receipt     970  
    Net cash used in investing activities (2,469 )   (1,584 )
           
    Financing Activities      
    Term loan repayments     (50,000 )
    Borrowings under revolving credit agreement 20,000      
    Repayments under revolving credit agreement (20,000 )    
    Proceeds from exercise of stock options 880     433  
    Fair value of shares surrendered as payment of tax withholding (2,281 )   (1,027 )
    Repurchase of common stock (49,978 )    
    Net cash used in financing activities (51,379 )   (50,594 )
           
    Effects of exchange rate changes on cash and cash equivalents (283 )   337  
    Increase in cash and cash equivalents 1,721     2,280  
    Cash and cash equivalents - beginning of period 32,548     41,855  
    Cash and cash equivalents - end of period $ 34,269     $ 44,135  
           
    Interest paid $ 20,907     $ 24,298  
    Income taxes paid $ 334     $ 2,230  

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

      Three Months Ended June 30, 2018
    (In thousands) North American OTC Healthcare   International OTC Healthcare   Household
    Cleaning
      Consolidated
    Total segment revenues* $ 214,775     $ 19,394     $ 19,811     $ 253,980  
    Cost of sales 89,153     7,616     16,588     113,357  
    Gross profit 125,622     11,778     3,223     140,623  
    Advertising and promotion 33,258     3,423     430     37,111  
    Contribution margin $ 92,364     $ 8,355     $ 2,793     103,512  
    Other operating expenses             31,025  
    Operating income             72,487  
    Other expense             26,027  
    Income before income taxes             46,460  
    Provision for income taxes             11,994  
    Net income             $ 34,466  

    *Intersegment revenues of $2.7 million were eliminated from the North American OTC Healthcare segment.

      Three Months Ended June 30, 2017
    (In thousands) North American OTC Healthcare   International OTC Healthcare   Household
    Cleaning
      Consolidated
    Total segment revenues* $ 215,815     $ 20,898     $ 19,860     $ 256,573  
    Cost of sales 86,501     9,950     16,646     113,097  
    Gross profit 129,314     10,948     3,214     143,476  
    Advertising and promotion 32,808     3,690     446     36,944  
    Contribution margin $ 96,506     $ 7,258     $ 2,768     106,532  
    Other operating expenses             27,577  
    Operating income             78,955  
    Other expense             26,267  
    Income before income taxes             52,688  
    Provision for income taxes             18,929  
    Net income             $ 33,759  

    * Intersegment revenues of $1.4 million were eliminated from the North American OTC Healthcare segment.

    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 Revenue Growth Percentage, Non-GAAP Adjusted Gross Margin, Non-GAAP Adjusted Gross Margin Percentage, Non-GAAP Adjusted Advertising and Promotion Expense, Non-GAAP Adjusted Advertising and Promotion Expense Percentage, Non-GAAP Adjusted General and Administrative Expense,  Non-GAAP Adjusted General and Administrative Expense Percentage, Non-GAAP EBITDA, Non-GAAP EBITDA Margin, Non-GAAP Adjusted EBITDA, Non-GAAP Adjusted EBITDA Margin, Non-GAAP Adjusted Net Income, Non-GAAP Adjusted EPS, Non-GAAP Free Cash Flow, Non-GAAP Adjusted Free Cash Flow and Net Debt.  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 assets held for sale in the periods presented.
    • Non-GAAP Organic Revenue Growth Percentage:  Calculated as the change in Non-GAAP Organic Revenues from prior year divided by prior year Non-GAAP Organic Revenues.
    • Non-GAAP Adjusted Gross Margin: GAAP Gross Profit minus certain integration, transition, acquisition and assets held for sale-related costs.
    • Non-GAAP Adjusted Gross Margin Percentage: Calculated as Non-GAAP Adjusted Gross Margin divided by GAAP Total Revenues.
    • Non-GAAP Adjusted Advertising and Promotion Expense: GAAP Advertising and Promotion expenses minus certain integration, transition, and acquisition-related costs.
    • Non-GAAP Adjusted Advertising and Promotion Expense Percentage: Calculated as Non-GAAP Adjusted Advertising and Promotion expense divided by GAAP Total Revenues.
    • Non-GAAP Adjusted General and Administrative Expense: GAAP General and Administrative expenses minus certain integration, transition, acquisition and assets held for sale-related costs.
    • 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 (Loss) less interest expense (income), income taxes provision (benefit), and depreciation and amortization.
    • Non-GAAP EBITDA Margin: Calculated as Non-GAAP EBITDA divided by GAAP Total Revenues.
    • Non-GAAP Adjusted EBITDA: Non-GAAP EBITDA less certain integration, transition, acquisition and assets held for sale-related costs.
    • Non-GAAP Adjusted EBITDA Margin: Calculated as Non-GAAP Adjusted EBITDA divided by GAAP Total Revenues.
    • Non-GAAP Adjusted Net Income: GAAP Net Income (Loss) before certain integration, transition, acquisition and assets held for sale-related costs, applicable tax impact associated with these items and normalized tax rate adjustment.
    • 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 assets held for sale.
    • Net Debt: Calculated as total principal amount of debt outstanding ($2,013,000 at June 30, 2018) less cash and cash equivalents ($34,269 at June 30, 2018).  Amounts in thousands.

    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 Gross Profit to Non-GAAP Adjusted Gross Margin and related Non-GAAP Adjusted Gross Margin percentage:

      Three Months Ended June 30,
      2018   2017
    (In thousands)      
    GAAP Total Revenues $ 253,980     $ 256,573  
           
    GAAP Gross Profit $ 140,623     $ 143,476  
    GAAP Gross Profit as a Percentage of GAAP Total Revenue 55.4 %   55.9 %
    Adjustments:      
    Integration, transition and other costs associated with assets held for sale and acquisitions (1) 170     2,576  
    Total adjustments 170     2,576  
    Non-GAAP Adjusted Gross Margin $ 140,793     $ 146,052  
    Non-GAAP Adjusted Gross Margin as a Percentage of GAAP Total Revenues 55.4 %   56.9 %

    (1) Items related to assets held for sale and acquisitions represent costs related to divesting of assets held for sale and integrating recently acquired businesses   including (but not limited to), costs to exit or convert contractual obligations, severance, information system conversion and consulting costs.

    Reconciliation of GAAP Advertising and Promotion Expense and related GAAP Advertising and Promotion Expense percentage to Non-GAAP Adjusted Advertising and Promotion Expense and related Non-GAAP Adjusted Advertising and Promotion Expense percentage:

      Three Months Ended June 30,
      2018   2017
    (In thousands)      
    GAAP Advertising and Promotion Expense $ 37,111     $ 36,944  
    GAAP Advertising and Promotion Expense as a Percentage of GAAP Total Revenue 14.6 %   14.4 %
    Adjustments:      
    Integration, transition and other costs associated with acquisitions(1)     39  
    Total adjustments     39  
    Non-GAAP Adjusted Advertising and Promotion Expense $ 37,111     $ 36,905  
    Non-GAAP Adjusted Advertising and Promotion Expense as a Percentage of GAAP Total Revenues 14.6 %   14.4 %

    (1) Acquisition related items represent costs related to integrating the advertising agencies of the recently acquired businesses.

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

      Three Months Ended June 30,
      2018   2017
    (In thousands)      
    GAAP General and Administrative Expense(1) $ 23,941     $ 20,410  
    GAAP General and Administrative Expense as a Percentage of GAAP Total Revenue 9.4 %   8.0 %
           
    Adjustments:      
    Integration, transition and other costs associated with assets held for sale and acquisitions (2) 1,422     584  
    Total adjustments 1,422     584  
    Non-GAAP Adjusted General and Administrative Expense $ 22,519     $ 19,826  
    Non-GAAP Adjusted General and Administrative Expense Percentage as a Percentage of GAAP Total Revenues 8.9 %   7.7 %

    (1) Certain immaterial amounts have been reclassified out of general and administrative expense into other expense for 2017.
    (2) Items related to assets held for sale and acquisitions represent costs related to divesting of assets held for sale and 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 and divestiture processes such as insurance costs, legal and other acquisition related professional fees.

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

      Three Months Ended June 30,
      2018   2017
    (In thousands)      
    GAAP Net Income $ 34,466     $ 33,759  
    Interest expense, net 25,940     26,341  
    Provision for income taxes 11,994     18,929  
    Depreciation and amortization 8,372     8,507  
    Non-GAAP EBITDA 80,772     87,536  
    Non-GAAP EBITDA Margin 31.8 %   34.1 %
    Adjustments:      
    Integration, transition and other costs associated with assets held for sale and acquisitions in Cost of Goods Sold (1) 170     2,576  
    Integration, transition and other costs associated with acquisitions in Advertising and Promotion Expense(1)     39  
    Integration, transition and other costs associated with assets held for sale and acquisitions in General and Administrative Expense (1) 1,422     584  
    Total adjustments 1,592     3,199  
    Non-GAAP Adjusted EBITDA $ 82,364     $ 90,735  
    Non-GAAP Adjusted EBITDA Margin 32.4 %   35.4 %

    (1) Items related to assets held for sale and acquisitions represent costs related to divesting of assets held for sale and 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 and divestiture processes such as insurance costs, legal and other acquisition related professional fees.

    Reconciliation of GAAP Net Income to Non-GAAP Adjusted Net Income and related Non-GAAP Adjusted Earnings Per Share:

      Three Months Ended June 30,
      2018 2018 Adjusted EPS   2017 2017 Adjusted EPS
    (In thousands, except per share data)          
    GAAP Net Income $ 34,466   $ 0.65     $ 33,759   $ 0.63  
    Adjustments:          
    Integration, transition and other costs associated with assets held for sale and acquisitions in Cost of Goods Sold (1) 170       2,576   0.05  
    Integration, transition and other costs associated with acquisitions in Advertising and Promotion Expense(1)       39    
    Integration, transition and other costs associated with assets held for sale and acquisitions in General and Administrative Expense (1) 1,422   0.03     584   0.01  
    Tax impact of adjustments (2) (404 )     (1,167 ) (0.02 )
    Normalized tax rate adjustment (3) 193       (302 ) (0.01 )
    Total adjustments 1,381   0.03     1,730   0.03  
    Non-GAAP Adjusted Net Income
    and Adjusted EPS
    $ 35,847   $ 0.68     $ 35,489   $ 0.66  

    (1) Items related to assets held for sale and acquisitions represent costs related to divesting of assets held for sale and 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 and divestiture processes such as insurance costs, legal and other acquisition related professional fees.
    (2) 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.
    (3) Income tax adjustment to adjust for discrete income tax items.

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

      Three Months Ended June 30,
      2018   2017
    (In thousands)      
    GAAP Net Income $ 34,466     $ 33,759  
    Adjustments:      
    Adjustments to reconcile net income to net cash provided by operating activities as shown in the Statement of Cash Flows 17,705     21,983  
    Changes in operating assets and liabilities as shown in the Statement of Cash Flows 3,681     (1,621 )
    Total adjustments 21,386     20,362  
    GAAP Net cash provided by operating activities 55,852     54,121  
    Purchases of property and equipment (2,469 )   (2,554 )
    Non-GAAP Free Cash Flow 53,383     51,567  
    Integration, transition and other payments associated with assets held for sale and acquisitions (1) 189     4,948  
    Non-GAAP Adjusted Free Cash Flow $ 53,572     $ 56,515  

    (1) Items related to assets held for sale and acquisitions represent costs related to divesting of assets held for sale and 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 and divestiture processes such as insurance costs, legal and other acquisition related professional fees.

    Outlook for Fiscal Year 2019:

    Reconciliation of Projected GAAP EPS to Projected Non-GAAP Adjusted EPS:

      2019 Projected EPS
      Low   High
    Projected FY'19 GAAP EPS $ 2.80     $ 2.88  
    Adjustments:      
    Sale of Household Cleaning business (1) 0.02     0.02  
    Tax adjustment 0.02     0.02  
    Total Adjustments 0.04     0.04  
    Projected Non-GAAP Adjusted EPS $ 2.84     $ 2.92  

    (1) Represents costs related to the sale of our Household Cleaning business including (but not limited to) costs to exit or convert contractual obligations, severance, consulting costs and certain costs related to the consummation of the divestiture process such as legal and other divestiture related professional fees, net of taxes, partly offset by the gain on sale of our Household Cleaning business.

    Reconciliation of Projected GAAP Net cash provided by operating activities to Projected Non-GAAP Adjusted Free Cash Flow:

      2019 Projected Free Cash Flow
    (In millions)  
    Projected FY'19 GAAP Net cash provided by operating activities $ 202  
    Additions to property and equipment for cash (13 )
    Projected Non-GAAP Free Cash Flow 189  
    Payments associated with divestitures(1) 16  
    Projected Non-GAAP Adjusted Free Cash Flow $ 205  

    (1)  Divestiture related items represent costs related to divesting of businesses sold including (but not limited to) taxes, costs to exit or convert contractual obligations, severance, consulting costs and certain costs related to the consummation of the divestiture process such as legal and other divestiture related professional fees.

    Prestige Brands Holdings, Inc.
    Phil Terpolilli, 914-524-6819
    irinquiries@prestigebrands.com

    Primary Logo

    Prestige Brands Holdings Inc

    Primary IR Contact

    Irinquiries@prestigebrands.com
    Prestige Consumer Healthcare 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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