News Releases
-
Revenue Increased 22.4% to
$256.6 Million in Q1 Fiscal 2018; Revenue Growth of 3.0% Pro-forma for Fleet -
Adjusted EPS Increased 12% to
$0.66 ; GAAP Q1 Diluted EPS of$0.63 -
Cash Flow From Operations Increased to
$54.1 Million in Q1; Adjusted Free Cash Flow of$56.5 Million - Reaffirms Full Year FY’18 Revenue, Adjusted Cash Flow and Adjusted EPS Outlook
“Our first quarter financial and operating performance delivered a
strong start to the year, and we are pleased with our 3% adjusted
revenue growth driven by solid consumption trends across the portfolio.
Strong top-line, cash flow and profit results combined with our outlook
for the remainder of fiscal 2018 position us well to achieve our
guidance objectives for the full fiscal year,” said
First Fiscal Quarter Ended
Reported revenues in the first quarter of fiscal 2018 increased 22.4% to
Reported gross profit margin in the first quarter fiscal 2018 was 55.9%, with adjusted gross profit margin of 56.9% excluding adjustments related to the Fleet transition and integration, compared to 58.0% for the first quarter of fiscal 2017. The gross profit margin year-over-year decline was primarily attributable to the addition of the high growth Fleet portfolio.
Advertising & promotion expense for the first quarter 2018 was
Reported net income for the first quarter of fiscal 2018 totaled
Adjustments to net income in the first quarter of fiscal 2018 and fiscal 2017 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 2018 increased to
The Company's net debt position as of
Segment Review
Household Cleaning: Segment revenues totaled
Commentary and Outlook for Fiscal 2018
“Our solid quarterly results and consumer takeaway, in a challenging
retail environment, gives us increased conviction in our ability to
achieve our fiscal 2018 guidance. Accordingly, we are reaffirming our
fiscal 2018 expectation for total reported top-line growth of 18% to 20%
and pro-forma revenue growth including Fleet of 2.0% to 2.5%. We are
also reaffirming our fiscal 2018 adjusted earnings per share guidance in
the range of
Fiscal 2018 Full-Year Outlook | |||
Revenue Growth | 18% to 20% | ||
Adjusted E.P.S.* | $2.58 to $2.68 | ||
Adjusted Free Cash Flow* | $205 million or more | ||
Fiscal Q1 Conference Call, Accompanying Slide Presentation and Replay
The Company will host a conference call to review its first quarter
results today,
Telephonic replays will be available for two weeks following the
completion of the call and can be accessed at 855-859-2056 within
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.
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, the Company’s ability to meet organic growth targets, the
Company’s use of free cash flow to pay down debt and build M&A capacity,
and the success of the Company’s acquisition of Fleet and its brand
building efforts. 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, the failure to
successfully integrate the Fleet brands, general economic and business
conditions, fluctuating foreign exchange rates, consumer trends,
competitive pressures, and the ability of the Company’s third party
manufacturers and suppliers to meet demand for its 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
About
The Company markets and distributes brand name over-the-counter and
household cleaning products throughout the U.S. and
* See the “About Non-GAAP Financial Measures” section of this report for further presentation information.
Prestige Brands Holdings, Inc.
Condensed Consolidated Statements of Income (Loss) and
Comprehensive Income (Loss) (Unaudited) |
|||||||||||
Three Months Ended June 30, | |||||||||||
(In thousands, except per share data) |
2017 | 2016 | |||||||||
Revenues | |||||||||||
Net sales | $ | 256,487 | $ | 208,770 | |||||||
Other revenues | 86 | 805 | |||||||||
Total revenues | 256,573 | 209,575 | |||||||||
Cost of Sales | |||||||||||
Cost of sales excluding depreciation | 111,757 | 87,984 | |||||||||
Cost of sales depreciation | 1,340 | — | |||||||||
Cost of sales | 113,097 | 87,984 | |||||||||
Gross profit | 143,476 | 121,591 | |||||||||
Operating Expenses | |||||||||||
Advertising and promotion | 36,944 | 27,635 | |||||||||
General and administrative | 20,336 | 19,457 | |||||||||
Depreciation and amortization | 7,167 | 6,832 | |||||||||
Loss on divestitures | — | 55,453 | |||||||||
Total operating expenses | 64,447 | 109,377 | |||||||||
Operating income | 79,029 | 12,214 | |||||||||
Other (income) expense | |||||||||||
Interest income | (69 | ) | (57 | ) | |||||||
Interest expense | 26,410 | 21,184 | |||||||||
Total other expense | 26,341 | 21,127 | |||||||||
Income (loss) before income taxes | 52,688 | (8,913 | ) | ||||||||
Provision (benefit) for income taxes | 18,929 | (3,382 | ) | ||||||||
Net income (loss) | $ | 33,759 | $ | (5,531 | ) | ||||||
Earnings (loss) per share: | |||||||||||
Basic | $ | 0.64 | $ | (0.10 | ) | ||||||
Diluted | $ | 0.63 | $ | (0.10 | ) | ||||||
Weighted average shares outstanding: | |||||||||||
Basic | 53,038 | 52,881 | |||||||||
Diluted | 53,509 | 52,881 | |||||||||
Comprehensive income (loss), net of tax: | |||||||||||
Currency translation adjustments | 1,119 | (5,824 | ) | ||||||||
Unrecognized net gain on pension plans | 1 | — | |||||||||
Total other comprehensive (loss) income | 1,120 | (5,824 | ) | ||||||||
Comprehensive income (loss) | $ | 34,879 | $ | (11,355 | ) | ||||||
Prestige Brands Holdings, Inc. Condensed Consolidated Balance Sheets |
|||||||||||
(In thousands) Assets |
June 30, |
March 31, |
|||||||||
(Unaudited) | |||||||||||
Current assets | |||||||||||
Cash and cash equivalents | $ | 44,135 | $ | 41,855 | |||||||
Accounts receivable, net of allowance of $13,556 and $13,010, respectively | 134,725 | 136,742 | |||||||||
Inventories | 118,707 | 115,609 | |||||||||
Prepaid expenses and other current assets | 30,658 | 40,228 | |||||||||
Total current assets | 328,225 | 334,434 | |||||||||
Property, plant and equipment, net | 50,469 | 50,595 | |||||||||
Goodwill | 615,451 | 615,252 | |||||||||
Intangible assets, net | 2,898,273 | 2,903,613 | |||||||||
Other long-term assets | 7,143 | 7,454 | |||||||||
Total Assets | $ | 3,899,561 | $ | 3,911,348 | |||||||
Liabilities and Stockholders' Equity | |||||||||||
Current liabilities | |||||||||||
Accounts payable | $ | 62,738 | $ | 70,218 | |||||||
Accrued interest payable | 8,414 | 8,130 | |||||||||
Other accrued liabilities | 82,465 | 83,661 | |||||||||
Total current liabilities | 153,617 | 162,009 | |||||||||
Long-term debt | |||||||||||
Principal amount | 2,172,000 | 2,222,000 | |||||||||
Less unamortized debt costs | (26,591 | ) | (28,268 | ) | |||||||
Long-term debt, net | 2,145,409 | 2,193,732 | |||||||||
Deferred income tax liabilities | 724,545 | 715,086 | |||||||||
Other long-term liabilities | 17,443 | 17,972 | |||||||||
Total Liabilities | 3,041,014 | 3,088,799 | |||||||||
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 - 53,352 shares at June 30, 2017 and 53,287 shares at March 31, 2017 | 533 | 533 | |||||||||
Additional paid-in capital | 460,401 | 458,255 | |||||||||
Treasury stock, at cost - 352 shares at June 30, 2017 and 332 shares at March 31, 2017 | (7,621 | ) | (6,594 | ) | |||||||
Accumulated other comprehensive loss, net of tax | (25,232 | ) | (26,352 | ) | |||||||
Retained earnings | 430,466 | 396,707 | |||||||||
Total Stockholders' Equity | 858,547 | 822,549 | |||||||||
Total Liabilities and Stockholders' Equity | $ | 3,899,561 | $ | 3,911,348 | |||||||
Prestige Brands Holdings, Inc.
Condensed Consolidated Statements of Cash Flows (Unaudited) |
|||||||||||
Three Months Ended June 30, | |||||||||||
(In thousands) |
2017 | 2016 | |||||||||
Operating Activities | |||||||||||
Net income (loss) | $ | 33,759 | $ | (5,531 | ) | ||||||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||||||||||
Depreciation and amortization | 8,507 | 6,832 | |||||||||
Loss on divestitures | — | 55,453 | |||||||||
Loss on disposals of property and equipment | 490 | — | |||||||||
Deferred income taxes | 9,225 | (9,660 | ) | ||||||||
Amortization of debt origination costs | 1,746 | 2,231 | |||||||||
Excess tax benefits from share-based awards | 302 | 550 | |||||||||
Stock-based compensation costs | 1,713 | 1,940 | |||||||||
Changes in operating assets and liabilities, net of effects from acquisitions: | |||||||||||
Accounts receivable | 1,543 | 5,151 | |||||||||
Inventories | (2,899 | ) | (4,327 | ) | |||||||
Prepaid expenses and other current assets | 9,604 | 5,697 | |||||||||
Accounts payable | (8,024 | ) | (3,401 | ) | |||||||
Accrued liabilities | (1,558 | ) | (3,634 | ) | |||||||
Noncurrent assets and liabilities | (287 | ) | — | ||||||||
Net cash provided by operating activities | 54,121 | 51,301 | |||||||||
Investing Activities | |||||||||||
Purchases of property, plant and equipment | (2,554 | ) | (895 | ) | |||||||
Acquisition of Fleet escrow payment | 970 | — | |||||||||
Net cash used in investing activities | (1,584 | ) | (895 | ) | |||||||
Financing Activities | |||||||||||
Term loan repayments | (50,000 | ) | (50,000 | ) | |||||||
Payments of debt origination costs | — | (9 | ) | ||||||||
Proceeds from exercise of stock options | 433 | 3,405 | |||||||||
Fair value of shares surrendered as payment of tax withholding | (1,027 | ) | (1,395 | ) | |||||||
Net cash used in financing activities | (50,594 | ) | (47,999 | ) | |||||||
Effects of exchange rate changes on cash and cash equivalents | 337 | (760 | ) | ||||||||
Increase in cash and cash equivalents | 2,280 | 1,647 | |||||||||
Cash and cash equivalents - beginning of period | 41,855 | 27,230 | |||||||||
Cash and cash equivalents - end of period | $ | 44,135 | $ | 28,877 | |||||||
Interest paid | $ | 24,298 | $ | 18,337 | |||||||
Income taxes paid | $ | 2,230 | $ | 1,357 | |||||||
Prestige Brands Holdings, Inc.
Condensed Consolidated Statements of Income
Business Segments (Unaudited) |
||||||||||||||||||||
Three Months Ended June 30, 2017 | ||||||||||||||||||||
(In thousands) |
North American |
International |
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 | 27,503 | |||||||||||||||||||
Operating income | 79,029 | |||||||||||||||||||
Other expense | 26,341 | |||||||||||||||||||
Income before income taxes | 52,688 | |||||||||||||||||||
Provision for income taxes | 18,929 | |||||||||||||||||||
Net income | $ | 33,759 | ||||||||||||||||||
*Intersegment revenues of
Three Months Ended June 30, 2016 | |||||||||||||||||||||
(In thousands) |
North American |
International |
Household |
Consolidated | |||||||||||||||||
Total segment revenues* | $ | 172,080 | $ | 15,804 | $ | 21,691 | $ | 209,575 | |||||||||||||
Cost of sales** | 64,234 | 6,948 | 16,802 | 87,984 | |||||||||||||||||
Gross profit | 107,846 | 8,856 | 4,889 | 121,591 | |||||||||||||||||
Advertising and promotion | 25,040 | 2,124 | 471 | 27,635 | |||||||||||||||||
Contribution margin | $ | 82,806 | $ | 6,732 | $ | 4,418 | 93,956 | ||||||||||||||
Other operating expenses*** | 81,742 | ||||||||||||||||||||
Operating income | 12,214 | ||||||||||||||||||||
Other expense | 21,127 | ||||||||||||||||||||
Loss before income taxes | (8,913 | ) | |||||||||||||||||||
Benefit for income taxes | (3,382 | ) | |||||||||||||||||||
Net loss | $ | (5,531 | ) | ||||||||||||||||||
* Intersegment revenues of
**Certain immaterial amounts related to cost of sales were reclassified
between the
***Other operating expenses includes a pre-tax loss on sale of assets of
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 on a constant currency basis, Constant Currency Non-GAAP Organic Revenue Growth Percentage, Non-GAAP Proforma Revenues on a constant currency basis, Constant Currency Non-GAAP Proforma 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 on a constant currency basis: GAAP Total Revenues excluding revenues associated with products acquired or divested in the periods presented and excluding the impact of foreign currency exchange rates.
- Constant Currency Non-GAAP Organic Revenue Growth Percentage: Calculated as the change in Non-GAAP Organic Revenues on a constant currency basis from prior year divided by prior year Non-GAAP Organic Revenues on a constant currency basis.
- Non-GAAP Proforma Revenues on a constant currency basis: Non-GAAP Organic Revenues on a constant currency basis plus revenues associated with acquisitions.
- Constant Currency Non-GAAP Proforma Revenue Growth Percentage: Calculated as the change in Non-GAAP Proforma Revenues on a constant currency basis from prior year divided by prior year Non-GAAP Proforma Revenues on a constant currency basis.
- Non-GAAP Adjusted Gross Margin: GAAP Gross Profit minus certain integration, transition and other acquisition 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 other 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 other legal and professional fees, integration, transition and other acquisition related costs and divestiture 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 other legal and professional fees, integration, transition and other acquisition related costs, divestiture costs, and gain/loss on divestitures.
- 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 other legal and professional fees, integration, transition and other acquisition related costs, divestiture costs, gain/loss on divestitures, 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 divestitures.
-
Net Debt: Calculated as total principal amount of debt
outstanding of (
$2,172,000 atJune 30, 2017 ) less cash and cash equivalents ($44,135 atJune 30, 2017 ). 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 Total Revenues to Non-GAAP Organic Revenues on a Constant Currency basis and Non-GAAP Proforma Revenues on a Constant Currency Basis and related growth percentages:
Three Months Ended June 30, | |||||||||||
2017 | 2016 | ||||||||||
(In thousands) |
|||||||||||
GAAP Total Revenues | $ | 256,573 | $ | 209,575 | |||||||
Revenue Growth | 22.4 | % | |||||||||
Adjustments: |
|||||||||||
Revenues associated with acquisitions (1) | (54,887 | ) | — | ||||||||
Revenues associated with divested brands(2) | — | (11,039 | ) | ||||||||
Impact of foreign currency exchange rates (3) | — | (752 | ) | ||||||||
Non-GAAP Organic Revenues on a constant currency basis | $ | 201,686 | $ | 197,784 | |||||||
Constant Currency Non-GAAP Organic Revenue Growth | 2.0 | % | |||||||||
Non-GAAP Organic Revenues on a constant currency basis | $ | 201,686 | $ | 197,784 | |||||||
Revenues associated with acquisitions (4) | 54,887 | 51,201 | |||||||||
Non-GAAP Proforma Revenues on a constant currency basis | $ | 256,573 | $ | 248,985 | |||||||
Constant Currency Non-GAAP Proforma Revenue Growth | 3.0 | % | |||||||||
(1) Revenues of our Fleet acquisition are excluded for purposes of
calculating Non-GAAP organic revenues on a constant currency basis.
These revenue adjustments relate to our
(2) Revenues of our divested brands have been excluded from the current
year and the prior year for purposes of calculating Non-GAAP organic
revenues on a constant currency basis. These revenue adjustments relate
to our
(3) Foreign currency exchange rate adjustments relate to all segments.
(4) Revenues of our Fleet acquisition are included for purposes of
calculating Non-GAAP proforma revenues on a constant currency basis.
These revenue adjustments relate to our
Reconciliation of GAAP Gross Profit to Non-GAAP Adjusted Gross Margin and related Non-GAAP Adjusted Gross Margin percentage:
Three Months Ended June 30, | |||||||||||
2017 | 2016 | ||||||||||
(In thousands) |
|||||||||||
GAAP Total Revenues | $ | 256,573 | $ | 209,575 | |||||||
GAAP Gross Profit | $ | 143,476 | $ | 121,591 | |||||||
Adjustments: |
|||||||||||
Integration, transition and other costs associated with acquisitions (1) | 2,576 | — | |||||||||
Total adjustments | 2,576 | — | |||||||||
Non-GAAP Adjusted Gross Margin | $ | 146,052 | $ | 121,591 | |||||||
Non-GAAP Adjusted Gross Margin as a Percentage of GAAP Total Revenues | 56.9 | % | 58.0 | % | |||||||
(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 insurance costs, legal and other acquisition related professional fees.
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, | |||||||||||
2017 | 2016 | ||||||||||
(In thousands) |
|||||||||||
GAAP Advertising and Promotion Expense | $ | 36,944 | $ | 27,635 | |||||||
GAAP Advertising and Promotion Expense as a Percentage of GAAP Total Revenue | 14.4 | % | 13.2 | % | |||||||
Adjustments: |
|||||||||||
Integration, transition and other costs associated with acquisitions (1) | 39 | — | |||||||||
Total adjustments | 39 | — | |||||||||
Non-GAAP Adjusted Advertising and Promotion Expense | $ | 36,905 | $ | 27,635 | |||||||
Non-GAAP Adjusted Advertising and Promotion Expense as a Percentage of GAAP Total Revenues | 14.4 | % | 13.2 | % | |||||||
(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, | |||||||||||
2017 | 2016 | ||||||||||
(In thousands) |
|||||||||||
GAAP General and Administrative Expense | $ | 20,336 | $ | 19,457 | |||||||
GAAP General and Administrative Expense as a Percentage of GAAP Total Revenue | 7.9 | % | 9.3 | % | |||||||
Adjustments: |
|||||||||||
Legal and professional fees associated with acquisitions and divestitures (1) | 373 | 484 | |||||||||
Integration, transition and other costs associated with acquisitions and divestitures (1) | 211 | 1,641 | |||||||||
Total adjustments | 584 | 2,125 | |||||||||
Non-GAAP Adjusted General and Administrative Expense | $ | 19,752 | $ | 17,332 | |||||||
Non-GAAP Adjusted General and Administrative Expense Percentage as a Percentage of GAAP Total Revenues | 7.7 | % | 8.3 | % | |||||||
(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 insurance costs, legal and other acquisition related professional fees.
Reconciliation of GAAP Net Income (Loss) 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, | |||||||||||
2017 | 2016 | ||||||||||
(In thousands) |
|||||||||||
GAAP Net Income (Loss) | $ | 33,759 | $ | (5,531 | ) | ||||||
Interest expense, net | 26,341 | 21,127 | |||||||||
Provision (benefit) for income taxes | 18,929 | (3,382 | ) | ||||||||
Depreciation and amortization | 8,507 | 6,832 | |||||||||
Non-GAAP EBITDA | 87,536 | 19,046 | |||||||||
Non-GAAP EBITDA Margin | 34.1 |
% |
9.1 | % | |||||||
Adjustments: |
|||||||||||
Integration, transition and other costs associated with acquisitions and divestitures in Cost of Goods Sold(1) | 2,576 | — | |||||||||
Integration, transition and other costs associated with acquisitions and divestitures in Advertising and Promotion Expense(1) | 39 | — | |||||||||
Integration, transition and other costs associated with acquisitions and divestitures in General and Administrative Expense(1) | 211 | 1,641 | |||||||||
Legal and professional fees associated with acquisitions and divestitures (1) | 373 | 484 | |||||||||
Loss on divestitures | — | 55,453 | |||||||||
Total adjustments | 3,199 | 57,578 | |||||||||
Non-GAAP Adjusted EBITDA | $ | 90,735 | $ | 76,624 | |||||||
Non-GAAP Adjusted EBITDA Margin | 35.4 | % | 36.6 | % | |||||||
(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 insurance costs, legal and other acquisition related professional fees.
Reconciliation of GAAP Net Income (Loss) to Non-GAAP Adjusted Net Income and related Non-GAAP Adjusted Earnings Per Share:
Three Months Ended June 30, | |||||||||||||||||||||||||
2017 |
2017 |
2016 |
2016 |
||||||||||||||||||||||
(In thousands) |
|||||||||||||||||||||||||
GAAP Net Income (Loss) | $ | 33,759 | $ | 0.63 | $ | (5,531 | ) | $ | (0.10 | ) | |||||||||||||||
Adjustments: |
|||||||||||||||||||||||||
Integration, transition and other costs associated with acquisitions and divestitures in Cost of Goods Sold(1) | 2,576 | 0.05 | — | — | |||||||||||||||||||||
Integration, transition and other costs associated with acquisitions and divestitures in Advertising and Promotion Expense(1) | 39 | — | — | — | |||||||||||||||||||||
Integration, transition and other costs associated with acquisitions and divestitures in General and Administrative Expense(1) | 211 | — | 1,641 | 0.03 | |||||||||||||||||||||
Legal and professional fees associated with acquisitions and
divestitures (1) |
373 | 0.01 | 484 | 0.01 | |||||||||||||||||||||
Loss on divestitures | — | — | 55,453 | 1.04 | |||||||||||||||||||||
Tax impact of adjustments (2) | (1,167 | ) | (0.02 | ) | (20,658 | ) | (0.39 | ) | |||||||||||||||||
Normalized tax rate adjustment (3) | (302 | ) | (0.01 | ) | — | — | |||||||||||||||||||
Total adjustments | 1,730 | 0.03 | 36,920 | 0.69 | |||||||||||||||||||||
Non-GAAP Adjusted Net Income
and Adjusted EPS |
$ | 35,489 | $ | 0.66 | $ | 31,389 | $ | 0.59 | |||||||||||||||||
(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 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 (Loss) to Non-GAAP Free Cash Flow and Non-GAAP Adjusted Free Cash Flow:
Three Months Ended June 30, | |||||||||||
2017 | 2016 | ||||||||||
(In thousands) |
|||||||||||
GAAP Net Income (Loss) | $ | 33,759 | $ | (5,531 | ) | ||||||
Adjustments: |
|||||||||||
Adjustments to reconcile net income (loss) to net cash provided by operating activities as shown in the Statement of Cash Flows | 21,983 | 57,346 | |||||||||
Changes in operating assets and liabilities, net of effects from acquisitions as shown in the Statement of Cash Flows | (1,621 | ) | (514 | ) | |||||||
Total adjustments | 20,362 | 56,832 | |||||||||
GAAP Net cash provided by operating activities | 54,121 | 51,301 | |||||||||
Purchases of property and equipment | (2,554 | ) | (895 | ) | |||||||
Non-GAAP Free Cash Flow | 51,567 | 50,406 | |||||||||
Integration, transition and other payments associated with acquisitions and divestitures(1) | 4,948 | 331 | |||||||||
Non-GAAP Adjusted Free Cash Flow | $ | 56,515 | $ | 50,737 | |||||||
(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 insurance costs, legal and other acquisition related professional fees.
Outlook for Fiscal Year 2018:
Reconciliation of Projected GAAP EPS to Projected Non-GAAP Adjusted EPS:
2018 Projected EPS | ||||||||||
Low | High | |||||||||
Projected FY'18 GAAP EPS | $ | 2.51 | $ | 2.61 | ||||||
Adjustments: |
||||||||||
Costs associated with Fleet integration(1) | 0.07 | 0.07 | ||||||||
Total Adjustments | 0.07 | 0.07 | ||||||||
Projected Non-GAAP Adjusted EPS | $ | 2.58 | $ | 2.68 | ||||||
(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 insurance costs, 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:
2018 Projected |
|||||||
(In millions) |
|||||||
Projected FY'18 GAAP Net cash provided by operating activities | $ | 210 | |||||
Additions to property and equipment for cash | (10 | ) | |||||
Projected Non-GAAP Free Cash Flow | 200 | ||||||
Payments associated with acquisitions(1) | 8 | ||||||
Tax effect of payments associated with acquisitions | (3 | ) | |||||
Projected Non-GAAP Adjusted Free Cash Flow | $ | 205 | |||||
(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 insurance costs, legal and other acquisition related professional fees.
View source version on businesswire.com: http://www.businesswire.com/news/home/20170803005358/en/
Source:
Prestige Brands Holdings, Inc.
Phil Terpolilli, 914-524-6819
pterpolilli@prestigebrands.com