Irinquiries@prestigebrands.com
Prestige Consumer Healthcare Inc.
660 White Plains Road – Ste 250
Tarrytown, NY 10591
Telephone: 914-524-6819
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of
Report (Date of earliest event reported): November 6,
2008
PRESTIGE
BRANDS HOLDINGS, INC.
(Exact
name of registrant as specified in its charter)
| Delaware | 001-32433 | 20-1297589 |
| (State or other jurisdiction | (Commission File Number) | (IRS Employer |
| of incorporation) | Identification No.) |
90 North Broadway,
Irvington, New York 10533
(Address
of principal executive offices, including Zip Code)
(914)
524-6810
(Registrant’s
telephone number, including area code)
Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
| [ ] | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| [ ] | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| [ ] | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| [ ] | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 2.02 Results of Operations and
Financial Condition.
On
November 6, 2008, Prestige Brands Holdings, Inc. (the ‘‘Registrant’’) announced
financial results for the fiscal quarter and six months ended September 30,
2008. A copy of the press release announcing the Registrant’s financial
results for the fiscal quarter and six months ended September 30, 2008 is
attached hereto as Exhibit 99.1 and incorporated herein by
reference.
Item
7.01. Regulation FD Disclosure.
The information set forth in Item
2.02 above is incorporated by reference as if fully set forth
herein.
Item
9.01 Financial Statements and Exhibits.
| (d) |
Exhibits.
|
| Exhibit |
Description
|
|
| 99.1 |
Press Release dated
November
6,
2008
(furnished
only).
|
SIGNATURES
Pursuant to the requirements of the
Securities Exchange Act of 1934, the Registrant has duly caused this report to
be signed on its behalf by the undersigned hereunto duly
authorized.
| Dated: November 6, 2008 | PRESTIGE BRANDS HOLDINGS, INC. |
| By: | /s/Peter J. Anderson |
| Name: | Peter J. Anderson | |
| Title: | Chief Financial Officer |
EXHIBIT
INDEX
|
Exhibit
|
Description
|
|
99.1
|
Press Release dated
November
6,
2008
(furnished
only).
|
EXHIBIT 99.1
For
Release on November 6, 2008, 6 a.m
Prestige
Brands Holdings, Inc. Reports Second Quarter & Six Months Fiscal 2009
Results
For
the Quarter, Net Revenue Up 1%; Net Income Up 25%; Free Cash Flow Up 40%; Debt
Paid Down $11 Million
Irvington,
NY, November 6, 2008—Prestige Brands Holdings, Inc. (NYSE:PBH) today announced
results for the second quarter and first half of fiscal year 2009, which ended
on September 30, 2008.
Net
revenues for the second fiscal quarter were $88.1 million, 1% above the prior
year’s comparable quarter net revenues of $87.3 million. This resulted primarily
from increases in sales of the Clear Eyes®, Comet® and Little Remedies® brands,
as well as the introduction of two new products, Chloraseptic™ Allergen Block
and Little Allergies™ Allergen Block. Partially offsetting those
increases were declines in Murine® Ear, Compound W® and Wartner®
brands.
Quarterly
operating income of $20.5 million was essentially flat to the prior year’s
comparable quarter operating income of $20.6 million. This was primarily due to
higher advertising and promotion expenditures (A&P) to introduce the two new
products, partially offset by higher gross margins and lower general and
administrative expenses (G&A).
Net
income for the second fiscal quarter was $8.5 million, or $0.17 per share, an
increase of 25% over the prior year’s comparable quarter net income of $6.8
million, or $0.14 per share. The improvement in net income was primarily due to
a $2.9 million, or a 30% reduction in interest expense which resulted from the
significant repayment of debt over the past fiscal year, combined with
comparatively lower interest rates.
First
Half of Fiscal 2009
Net
revenues for the first six months of fiscal 2009 were $161.6 million, a decrease
of 2.6% from the prior year’s comparable period revenues of $165.9
million. Operating income was $41.7 million, 4.6% below the
comparable period’s results of $43.7 million. Net income of $16.3
million, or $0.33 per share during the first six months, was 7.6% higher than
the comparable period’s net income of $15.1 or $0.30 per share.
Free
Cash Flow and Debt Repayment
Free cash
flow is a “non-GAAP” financial measure as that term is defined by the Securities
and Exchange Commission in Regulation G. Free cash flow is presented in this
news release because management believes it is a commonly used measure of
liquidity, and indicative of cash available for debt repayment and acquisitions.
The Company defines “free cash flow” as operating cash flow less capital
expenditures.
The
Company’s free cash flow for the second quarter ended September 30, 2008 was
$18.2 million, an increase of 40% over the prior year’s comparable quarter. Free
cash flow is composed of operating cash flow of $18.3 million less capital
expenditures of $48,000. This compares to the prior year comparable quarter’s
free cash flow of $13.0 million, comprised of operating cash flow of $13.1
million less capital expenditures of $100,000. The increase was primarily due to
an increase in net income and an improvement in working capital.
The
Company’s continued strong cash flow resulted in debt repayments of $11.0
million during the second fiscal quarter. Total debt has been reduced to $385.2
million at September 30, 2008. During the past twelve months, the Company’s
senior secured term loan facility has been reduced by $51.9 million to $259.2
million with the average interest rate dropping to 4.75% in the current quarter
from 7.74% for the year ago quarter.
During
the past twelve months, the Company’s free cash flow has been used primarily to
retire debt. As a result of the current banking and economic environment, the
Company recently made the decision to enhance its liquidity position, and
intends to reduce outstanding debt only modestly during the remainder of the
fiscal year and build its cash reserves to approximately $30 million. Once that
cash reserve objective is realized, the Company intends to resume debt
repayments.
Second
Quarter Results by Segment
Over-The-Counter
(OTC) Healthcare Products
Net
revenues of the OTC healthcare products segment were $50.3 million for the
second fiscal quarter, an increase of 1% over the prior year’s comparable period
revenues of $50.0 million. The increase was due to sales increases of the Clear
Eyes®, Little Remedies® and The Doctor’s® brands, as well as the introduction of
Chloraseptic™ Allergen Block and Little Allergies™ Allergen Block products.
These sales gains were partially offset by declines in the Compound W® and
Wartner® wart care brands resulting from unfavorable pricing dynamics
specifically in the cryogenic segment of this category.
Household
Products
Net
revenues for the household products segment were $32.1 million for the second
fiscal quarter, an increase of 2% over the prior year’s comparable period
revenues of $31.4 million. The increase is attributable to sales increases in
the Comet® brand, led by Comet® Spray Gel Mildew Stain Remover introduced in the
prior fiscal year. Sales declines in the Spic and Span® and Chore Boy® line
partially offset this increase.
Personal
Care Products
Net
revenues for the personal care products segment, the Company’s smallest business
segment, were $5.6 million for the second fiscal quarter, a slight decrease from
net revenues of $5.9 million in the prior year’s comparable period.
Commentary
“In an
increasingly challenging operating environment, we generally are pleased with
the overall results of the second quarter and the quality of our earnings,” said
Mark Pettie, Chairman and CEO. “We expect the investments we made during the
quarter to set the stage for improved organic growth in the second half. We are
also pleased with steps that we undertook to strengthen our balance sheet by
reducing debt and minimizing working capital in this economy. Combined with our
operating results, these steps also enabled us to deliver another period of very
solid cash flow.”
Conference
Call
The
Company will host a conference call to review its second quarter and six month
results on Thursday, November 6, 2008 at 8:30 am. The toll free dial in number
is 1-866-700-7173 within North America and 1-617-213-8838 outside North America.
The conference pass code is “prestige”. Telephonic replays will be
available for two weeks following the completion of the call and can be accessed
at 1-888-286-8010 within North America, and at 1-617-801-6888 outside North
America. The pass code is 55096352.
About
Prestige Brands Holdings, Inc.
Prestige
Brands markets and distributes brand name over-the-counter healthcare, personal
care and household products throughout the United States, Canada and certain
international markets. Key brands include Compound W® wart treatment,
Chloraseptic® sore throat relief products, New Skin® liquid bandage, Clear eyes®
and Murine® eye and ear care products, Little Remedies® pediatric
over-the-counter healthcare products, The Doctor’s® Night Guard™ dental
protector, Cutex® nail polish remover, Comet® and Spic and Span® household
cleaners, and other well-recognized brands.
Forward-Looking
Statements
Note:
This news release contains “forward-looking statements” within the meaning of
the federal securities laws and is 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,”
“outlook, “plans,” “projection,” “may,” “will,” “would,” “expect,” “intend,”
“estimate,” “anticipate,” “believe,” “potential,” “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 outlook for the Company’s market and the demand for its products, future
revenues, future debt retirement and our ability to manage costs and expenses,
including those associated with interest rate risk. These projections and
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 projected as a result of certain factors. A
discussion of factors that could cause actual results to vary is included in the
Company’s Annual Report on Form 10-K and other periodic reports filed with the
Securities and Exchange Commission.
Contact:
Dean Siegal
914-524-6819
Prestige
Brands Holdings, Inc.
Consolidated
Statements of Operations
(Unaudited)
|
Three
Months
Ended
September 30
|
Six
Months
Ended
September 30
|
|||||||||||||||
|
(In
thousands, except per share data)
|
2008
|
2007
|
2008
|
2007
|
||||||||||||
|
Revenues
|
||||||||||||||||
|
Net
sales
|
$ | 87,369 | $ | 86,840 | $ | 160,285 | $ | 164,881 | ||||||||
|
Other
revenues
|
682 | 497 | 1,300 | 1,067 | ||||||||||||
|
Total
revenues
|
88,051 | 87,337 | 161,585 | 165,948 | ||||||||||||
|
Cost
of Sales
|
||||||||||||||||
|
Costs
of sales
|
41,792 | 42,770 | 76,064 | 80,092 | ||||||||||||
|
Gross
profit
|
46,259 | 44,567 | 85,521 | 85,856 | ||||||||||||
|
Operating
Expenses
|
||||||||||||||||
|
Advertising
and promotion
|
13,638 | 11,017 | 20,957 | 18,803 | ||||||||||||
|
General
and administrative
|
9,363 | 10,184 | 17,336 | 17,830 | ||||||||||||
|
Depreciation
and amortization
|
2,757 | 2,756 | 5,513 | 5,507 | ||||||||||||
|
Total
operating expenses
|
25,758 | 23,957 | 43,806 | 42,140 | ||||||||||||
|
Operating
income
|
20,501 | 20,610 | 41,715 | 43,716 | ||||||||||||
|
Other
(income) expense
|
||||||||||||||||
|
Interest
income
|
(56 | ) | (173 | ) | (129 | ) | (360 | ) | ||||||||
|
Interest
expense
|
6,835 | 9,768 | 15,591 | 19,642 | ||||||||||||
|
Total
other (income) expense
|
6,779 | 9,595 | 15,462 | 19,282 | ||||||||||||
|
Income
before income taxes
|
13,722 | 11,015 | 26,253 | 24,434 | ||||||||||||
|
Provision
for income taxes
|
5,200 | 4,186 | 9,950 | 9,285 | ||||||||||||
|
Net
income
|
$ | 8,522 | $ | 6,829 | $ | 16,303 | $ | 15,149 | ||||||||
|
Basic
earnings per share
|
$ | 0.17 | $ | 0.14 | $ | 0.33 | $ | 0.30 | ||||||||
|
Diluted
earnings per share
|
$ | 0.17 | $ | 0.14 | $ | 0.33 | $ | 0.30 | ||||||||
| Weighted average shares outstanding: | ||||||||||||||||
|
Basic
|
49,924 | 49,710 | 49,902 | 49,686 | ||||||||||||
|
Diluted
|
50,037 | 50,046 | 50,036 | 50,042 | ||||||||||||
Prestige
Brands Holdings, Inc.
Consolidated
Balance Sheets
(Unaudited)
(In
thousands)
|
Assets
|
September 30, 2008 |
March
31, 2008
|
||||||
|
Current
assets
|
||||||||
|
Cash
and cash equivalents
|
$ | 12,630 | $ | 6,078 | ||||
|
Accounts
receivable
|
42,494 | 44,219 | ||||||
|
Inventories
|
25,372 | 29,696 | ||||||
|
Deferred
income tax assets
|
3,249 | 3,066 | ||||||
|
Prepaid
expenses and other current assets
|
3,144 | 2,316 | ||||||
|
Total
current assets
|
86,889 | 85,375 | ||||||
|
Property
and equipment
|
1,284 | 1,433 | ||||||
|
Goodwill
|
309,879 | 308,915 | ||||||
|
Intangible
assets
|
641,428 | 646,683 | ||||||
|
Other
long-term assets
|
6,450 | 6,750 | ||||||
|
Total
Assets
|
$ | 1,045,930 | $ | 1,049,156 | ||||
|
Liabilities
and Stockholders’ Equity
|
||||||||
|
Current
liabilities
|
||||||||
|
Accounts
payable
|
$ | 17,430 | $ | 20,539 | ||||
|
Accrued
interest payable
|
5,428 | 5,772 | ||||||
|
Other
accrued liabilities
|
11,158 | 8,030 | ||||||
|
Current
portion of long-term debt
|
3,550 | 3,550 | ||||||
|
Total
current liabilities
|
37,566 | 37,891 | ||||||
|
Long-term
debt
|
381,675 | 407,675 | ||||||
|
Other
long-term liabilities
|
-- | 2,377 | ||||||
|
Deferred
income tax liabilities
|
128,272 | 122,140 | ||||||
|
Total
Liabilities
|
547,513 | 570,083 | ||||||
|
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 – 50,060
shares
|
501 | 501 | ||||||
|
Additional
paid-in capital
|
381,941 | 380,364 | ||||||
|
Treasury
stock, at cost – 119 shares and 59 shares at
September 30 and March 31, 2008, respectively
|
(62 | ) | (47 | ) | ||||
|
Accumulated
other comprehensive income
|
480 | (999 | ) | |||||
|
Retained
earnings
|
115,557 | 99,254 | ||||||
|
Total
stockholders’ equity
|
498,417 | 479,073 | ||||||
|
Total
Liabilities and Stockholders’ Equity
|
$ | 1,045,930 | $ | 1,049,156 | ||||
Prestige
Brands Holdings, Inc.
Consolidated
Statements of Cash Flows
(Unaudited)
|
Six
Months Ended September 30
|
||||||||
|
(In
thousands)
|
2008
|
2007
|
||||||
|
Operating
Activities
|
||||||||
|
Net
income
|
$ | 16,303 | $ | 15,149 | ||||
|
Adjustments
to reconcile net income to net cash
provided by operating activities:
|
||||||||
|
Depreciation
and amortization
|
5,513 | 5,507 | ||||||
|
Deferred
income taxes
|
5,042 | 4,622 | ||||||
|
Amortization
of deferred financing costs
|
1,159 | 1,561 | ||||||
|
Stock-based
compensation
|
1,577 | 1,146 | ||||||
|
Changes
in operating assets and liabilities
|
||||||||
|
Accounts
receivable
|
1,725 | (11,345 | ) | |||||
|
Inventories
|
4,324 | 2,390 | ||||||
|
Prepaid
expenses and other current assets
|
(828 | ) | (1,692 | ) | ||||
|
Accounts
payable
|
(1,582 | ) | 1,884 | |||||
|
Accrued
liabilities
|
407 | 2,270 | ||||||
|
Net
cash provided by operating activities
|
33,640 | 21,492 | ||||||
|
Investing
Activities
|
||||||||
|
Purchases
of equipment
|
(109 | ) | (194 | ) | ||||
|
Business
acquisition purchase price adjustments
|
(964 | ) | (16 | ) | ||||
|
Net
cash used for investing activities
|
(1,073 | ) | (210 | ) | ||||
|
Financing
Activities
|
||||||||
|
Repayment
of long-term debt
|
(26,000 | ) | (26,237 | ) | ||||
|
Purchase
of common stock for treasury
|
(15 | ) | (4 | ) | ||||
|
Net
cash used for financing activities
|
(26,015 | ) | (26,241 | ) | ||||
|
Increase
(Decrease) in cash
|
6,552 | (4,959 | ) | |||||
|
Cash
- beginning of period
|
6,078 | 13,758 | ||||||
|
Cash
- end of period
|
$ | 12,630 | $ | 8,799 | ||||
|
Interest
paid
|
$ | 14,775 | $ | 18,078 | ||||
|
Income
taxes paid
|
$ | 4,761 | $ | 5,664 | ||||
Prestige
Brands Holdings, Inc.
Consolidating
Statements of Operations
(Unaudited)
|
Three
Months Ended September 30, 2008
|
||||||||||||||||
|
Over-the-
|
|
|
||||||||||||||
| Counter |
Household
|
Personal
|
||||||||||||||
|
Healthcare
|
Cleaning
|
Care
|
Consolidated
|
|||||||||||||
|
Net
sales
|
$ | 50,318 | $ | 31,482 | $ | 5,569 | $ | 87,369 | ||||||||
|
Other
revenues
|
24 | 658 | -- | 682 | ||||||||||||
|
Total
revenues
|
50,342 | 32,140 | 5,569 | 88,051 | ||||||||||||
|
Cost
of sales
|
17,567 | 20,937 | 3,288 | 41,792 | ||||||||||||
|
Gross
profit
|
32,775 | 11,203 | 2,281 | 46,259 | ||||||||||||
|
Advertising
and promotion
|
10,654 | 2,731 | 253 | 13,638 | ||||||||||||
|
Contribution
margin
|
$ | 22,121 | $ | 8,472 | $ | 2,028 | 32,621 | |||||||||
|
Other
operating expenses
|
12,120 | |||||||||||||||
|
Operating
income
|
20,501 | |||||||||||||||
|
Other
(income) expense
|
6,779 | |||||||||||||||
|
Provision
for income taxes
|
5,200 | |||||||||||||||
|
Net
income
|
$ | 8,522 | ||||||||||||||
|
Six
Months Ended September 30, 2008
|
||||||||||||||||
|
Over-the-
|
|
|
||||||||||||||
| Counter |
Household
|
Personal
|
||||||||||||||
|
Healthcare
|
Cleaning
|
Care
|
Consolidated
|
|||||||||||||
|
Net
sales
|
$ | 89,564 | $ | 59,886 | $ | 10,835 | $ | 160,285 | ||||||||
|
Other
revenues
|
24 | 1,276 | -- | 1,300 | ||||||||||||
|
Total
revenues
|
89,588 | 61,162 | 10,835 | 161,585 | ||||||||||||
|
Cost
of sales
|
30,775 | 38,860 | 6,429 | 76,064 | ||||||||||||
|
Gross
profit
|
58,813 | 22,302 | 4,406 | 85,521 | ||||||||||||
|
Advertising
and promotion
|
15,691 | 4,801 | 465 | 20,957 | ||||||||||||
|
Contribution
margin
|
$ | 43,122 | $ | 17,501 | $ | 3,941 | 64,564 | |||||||||
|
Other
operating expenses
|
22,849 | |||||||||||||||
|
Operating
income
|
41,715 | |||||||||||||||
|
Other
(income) expense
|
15,462 | |||||||||||||||
|
Provision
for income taxes
|
9,950 | |||||||||||||||
|
Net
income
|
$ | 16,303 | ||||||||||||||
Prestige
Brands Holdings, Inc.
Consolidating
Statements of Operations
(Unaudited)
|
Three
Months Ended September 30, 2007
|
||||||||||||||||
|
Over-the-
|
|
|
||||||||||||||
| Counter |
Household
|
Personal
|
||||||||||||||
|
Healthcare
|
Cleaning
|
Care
|
Consolidated
|
|||||||||||||
|
Net
sales
|
$ | 50,003 | 30,925 | $ | 5,912 | $ | 86,840 | |||||||||
|
Other
revenues
|
-- | 497 | -- | 497 | ||||||||||||
|
Total
revenues
|
50,003 | 31,422 | 5,912 | 87,337 | ||||||||||||
|
Cost
of sales
|
19,688 | 19,587 | 3,495 | 42,770 | ||||||||||||
|
Gross
profit
|
30,315 | 11,835 | 2,417 | 44,567 | ||||||||||||
|
Advertising
and promotion
|
8,154 | 2,575 | 288 | 11,017 | ||||||||||||
|
Contribution
margin
|
$ | 22,161 | $ | 9,260 | $ | 2,129 | 33,550 | |||||||||
|
Other
operating expenses
|
12,940 | |||||||||||||||
|
Operating
income
|
20,610 | |||||||||||||||
|
Other
(income) expense
|
9,595 | |||||||||||||||
|
Provision
for income taxes
|
4,186 | |||||||||||||||
|
Net
income
|
$ | 6,829 | ||||||||||||||
|
Six
Months Ended September 30, 2007
|
||||||||||||||||
|
Over-the-
|
|
|
||||||||||||||
| Counter |
Household
|
Personal
|
||||||||||||||
|
Healthcare
|
Cleaning
|
Care
|
Consolidated
|
|||||||||||||
|
Net
sales
|
$ | 92,429 | $ | 60,270 | $ | 12,182 | $ | 164,881 | ||||||||
|
Other
revenues
|
-- | 1,039 | 28 | 1,067 | ||||||||||||
|
Total
revenues
|
92,429 | 61,309 | 12,210 | 165,948 | ||||||||||||
|
Cost
of sales
|
35,074 | 37,980 | 7,038 | 80,092 | ||||||||||||
|
Gross
profit
|
57,355 | 23,329 | 5,172 | 85,856 | ||||||||||||
|
Advertising
and promotion
|
14,035 | 4,203 | 565 | 18,803 | ||||||||||||
|
Contribution
margin
|
$ | 43,320 | $ | 19,126 | $ | 4,607 | 67,053 | |||||||||
|
Other
operating expenses
|
23,337 | |||||||||||||||
|
Operating
income
|
43,716 | |||||||||||||||
|
Other
(income) expense
|
19,282 | |||||||||||||||
|
Provision
for income taxes
|
9,285 | |||||||||||||||
|
Net
income
|
$ | 15,149 | ||||||||||||||