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): February 5,
2009
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
February 5, 2009, the Registrant announced financial results for the fiscal
quarter and nine months ended December 31, 2008. A copy of the press
release announcing the Registrant’s earnings results for the fiscal quarter and
nine months ended December 31, 2008 is attached hereto as Exhibit 99.1 and
incorporated herein by reference.
The
information in this Form 8-K and Exhibit 99.1 attached hereto shall not be
deemed to be ‘‘filed’’ for purposes of Section 18 of the Securities Exchange Act
of 1934, as amended, or otherwise subject to the liabilities of that section,
unless the Registrant specifically states that the information is to be
considered “filed” under the Securities Exchange Act of 1934 or incorporates it
by reference into a filing under the Securities Act of 1933, as amended, or the
Securities Exchange Act of 1934.
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
February
5,
2009
announcing the Registrant’s
financial results for the fiscal quarter and nine months
ended
December
31, 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:
|
February
5, 2009
|
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
February
5, 2009 announcing the Registrant’s
financial results for the fiscal quarter and nine months
ended
December
31, 2008
(furnished
only).
|
|
Exhibit 99.1
Prestige
Brands Holdings, Inc. Reports Fiscal 2009 Third Quarter & Nine Month
Results; Net Revenues Up Slightly, Free Cash Flow Increases 16%
Irvington,
NY, February 5, 2009—Prestige Brands Holdings, Inc. (NYSE-PBH), a consumer
products company with a diversified portfolio of well-known brands in
over-the-counter healthcare products, household products and personal care
products, today announced results for the third fiscal quarter and nine months
of it’s 2009 fiscal year ended December 31, 2008.
Third
Quarter Results
Net
revenues for the third fiscal quarter ended December 31, 2008 were $80.3
million, slightly ahead of last year’s comparable period net revenues of $80.2
million.
Operating
income of $20.0 million for the third fiscal quarter was $2.9 million or 12.9%
below last year’s third quarter operating income of $22.9
million. Although the quarter’s gross profit increased by $1.1
million, the increase was offset by increased advertising and promotion
(A&P) and general and administrative expenses (G&A) of $1.8 million and
$2.1 million, respectively. The gross profit increase was the result of a
favorable sales mix and a reduction in obsolescence expenses. The A&P
increase was driven by introductory advertising support for two new allergen
block products, Chloraseptic® Allergen Block and Little Allergies® Allergen
Block. G&A increased primarily due to stock-based compensation
expenses in the current year, compared to a credit in the prior year quarter,
resulting from the reversal of expenses associated with certain stock-based
incentive compensation that did not vest because performance targets were not
met.
Net
income for the third quarter ended December 31, 2008 was $8.0 million or $0.16
per diluted share, 5% below the comparable period’s net income of $8.4 million
or $0.17 per diluted share. The decrease in operating income was partially
offset by a reduction in interest expense due to lower debt outstanding and
lower interest rates.
Commenting
on the results of the quarter, Mark Pettie, Chairman and CEO said, “This was a
challenging quarter for us in the face of a sharply deteriorating economic
climate, highlighted by eroding retailer and consumer sentiment. A bright spot
continues to be our free cash flow, which increased meaningfully in the third
quarter, helping to enhance our liquidity position. Going forward we remain
very
cautious. While we are still confident in our long-term revenue
projection of 2-4%, given the current macroeconomic environment and our
year-to-date results, we do not anticipate achieving this growth rate in fiscal
year 2009.”
Results
by Segment
Over-The-Counter
(OTC) Healthcare Products
Net
revenues for the OTC segment in the fiscal third quarter were $47.6 million, or
6% greater than the prior year comparable quarter. The increase resulted from
sales of the new Chloraseptic® Allergen Block and Little Allergies® Allergen
Block products, and sales increases in the Chloraseptic® and Little Remedies®
base brands, New Skin® and Dermoplast®. Those gains were partially offset by
declines in sales in the Clear Eyes®, Murine®, Compound W® and Wartner®
brands.
Household
Products
Net
revenues for the household products segment in the third fiscal quarter were
$28.1 million, 6% lower than the prior year comparable quarter. This resulted
primarily from sales declines in the Spic and Span® and Chore Boy®
brands.
Personal
Care Products
The
smallest segment of the Company’s business registered net revenues of $4.5
million for the third fiscal quarter, 10.2% below last year’s third quarter
results of $5.1 million. Sales increases in the Cutex® brand were offset by
declines in the Denorex® and Prell® shampoo brands.
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. We view “free cash flow” as an
important measure because it is an indicator of cash available for debt
repayment and to fund acquisitions. We define “free cash flow” as
operating cash flow less capital expenditures.
The
Company’s free cash flow for the third quarter was $16.4 million, an increase of
16% over the prior year comparable quarter. Free cash flow is composed of
operating cash flow of $16.7 million less capital expenditures of $286,000. This
compares to the prior year comparable quarter’s free cash flow of $14.1 million
comprised of operating cash flow of $14.3 million less capital expenditures of
$174,000. The free cash flow generated in the quarter enabled the Company to
continue to build its cash position to
$27.9
million at December 31, 2008 compared to $12.8 million at September 30, 2008.
The Company previously announced its intention to enhance its liquidity position
by building its cash reserves to approximately $30 million, and then to resume
repayment of debt. Total indebtedness was reduced to $384.3 million at December
31, 2008.
Year-To-Date
Results
For the
nine months period ended December 31, 2008, total revenues were $241.9 million,
1.7% lower than the prior period comparable results of $246.2 million. Operating
income of $61.7 million was 7.4% below the prior year comparable period results
of $66.6 million, largely as a result of increased advertising and promotion
expenses and increased general and administrative expenses. Net
income for the nine month period ended December 31, 2008 was $24.3 million, 3.2%
higher than the comparable period’s results of $23.6 million as lower interest
expenses offset the operating income decline.
Conference
Call
The
Company will host a conference call to review its third quarter fiscal 2009
results on Thursday, February 5, 2009 at 8:30 am (EST). The toll free dial in
number is 800-638-4817. International callers may dial 617-614-3943. The
conference password is “prestige”. We will have a live internet webcast of the
call, as well as an archived replay, which can be accessed from the Investor
Relations page of www.prestigebrandsinc.com.
The archived replay will be available for two weeks following completion of the
call. The dial in numbers are 888-286-8010 (domestic) and 617-801-6888
(international). The pass code for the replay is 10641677.
About
Prestige Brands Holdings, Inc.
Located
in Irvington, New York, Prestige Brands Holdings, Inc. is a marketer and
distributor of brand name over-the-counter products, personal care and household
products sold throughout the U.S., Canada and certain international markets. Key
brands include Compound W(R) wart remover, Chloraseptic(R) sore throat and
allergy treatment, New-Skin(R) liquid bandage, Clear eyes(R) and Murine(R) eye
and ear care products, Little Remedies(R) pediatric over-the-counter products,
Cutex(R) nail polish remover, Comet(R) and Spic and Span(R) household products,
and other well-known 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," 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 economic outlook for the Company and the demand for its products, and future
cash flows from operations. 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 projected as a result
of certain factors. A discussion of factors that could cause results to vary is
included in the Company's Annual Report on Form 10-K and other periodic and
other 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
December 31
|
Nine
Months
Ended
December 31
|
|||||||||||||||
|
(In
thousands, except per share data)
|
2008
|
2007
|
2008
|
2007
|
||||||||||||
|
Revenues
|
||||||||||||||||
|
Net
sales
|
$ | 79,657 | $ | 79,644 | $ | 239,942 | $ | 244,525 | ||||||||
|
Other
revenues
|
621 | 578 | 1,921 | 1,645 | ||||||||||||
|
Total
revenues
|
80,278 | 80,222 | 241,863 | 246,170 | ||||||||||||
|
Cost
of Sales
|
||||||||||||||||
|
Costs
of sales
|
37,817 | 38,783 | 113,881 | 118,875 | ||||||||||||
|
Gross
profit
|
42,461 | 41,439 | 127,982 | 127,295 | ||||||||||||
|
Operating
Expenses
|
||||||||||||||||
|
Advertising
and promotion
|
11,428 | 9,572 | 32,385 | 28,375 | ||||||||||||
|
General
and administrative
|
8,311 | 6,209 | 25,647 | 24,039 | ||||||||||||
|
Depreciation
and amortization
|
2,760 | 2,753 | 8,273 | 8,260 | ||||||||||||
|
Total
operating expenses
|
22,499 | 18,534 | 66,305 | 60,674 | ||||||||||||
|
Operating
income
|
19,962 | 22,905 | 61,677 | 66,621 | ||||||||||||
|
Other
(income) expense
|
||||||||||||||||
|
Interest
income
|
(14 | ) | (164 | ) | (143 | ) | (524 | ) | ||||||||
|
Interest
expense
|
7,065 | 9,490 | 22,656 | 29,132 | ||||||||||||
|
Total
other (income) expense
|
7,051 | 9,326 | 22,513 | 28,608 | ||||||||||||
|
Income
before income taxes
|
12,911 | 13,579 | 39,164 | 38,013 | ||||||||||||
|
Provision
for income taxes
|
4,893 | 5,160 | 14,843 | 14,445 | ||||||||||||
|
Net
income
|
$ | 8,018 | $ | 8,419 | $ | 24,321 | $ | 23,568 | ||||||||
|
Basic
earnings per share
|
$ | 0.16 | $ | 0.17 | $ | 0.49 | $ | 0.47 | ||||||||
|
Diluted
earnings per share
|
$ | 0.16 | $ | 0.17 | $ | 0.49 | $ | 0.47 | ||||||||
|
Weighted
average shares outstanding:
Basic
|
49,960 | 49,799 | 49,921 | 49,744 | ||||||||||||
|
Diluted
|
50,040 | 50,035 | 50,038 | 50,040 | ||||||||||||
Prestige
Brands Holdings, Inc.
Consolidated
Balance Sheets
(Unaudited)
(In
thousands)
|
Assets
|
December
31, 2008
|
March
31, 2008
|
||||||
|
Current
assets
|
||||||||
|
Cash
and cash equivalents
|
$ | 27,934 | $ | 6,078 | ||||
|
Accounts
receivable
|
34,631 | 44,219 | ||||||
|
Inventories
|
28,751 | 29,696 | ||||||
|
Deferred
income tax assets
|
3,515 | 3,066 | ||||||
|
Prepaid
expenses and other current assets
|
2,843 | 2,316 | ||||||
|
Total
current assets
|
97,674 | 85,375 | ||||||
|
Property
and equipment
|
1,437 | 1,433 | ||||||
|
Goodwill
|
309,879 | 308,915 | ||||||
|
Intangible
assets
|
638,803 | 646,683 | ||||||
|
Other
long-term assets
|
5,139 | 6,750 | ||||||
|
Total
Assets
|
$ | 1,052,932 | $ | 1,049,156 | ||||
|
Liabilities
and Stockholders’ Equity
|
||||||||
|
Current
liabilities
|
||||||||
|
Accounts
payable
|
$ | 18,393 | $ | 20,539 | ||||
|
Accrued
interest payable
|
2,455 | 5,772 | ||||||
|
Other
accrued liabilities
|
13,207 | 8,030 | ||||||
|
Current
portion of long-term debt
|
3,550 | 3,550 | ||||||
|
Total
current liabilities
|
37,605 | 37,891 | ||||||
|
Long-term
debt
|
380,788 | 407,675 | ||||||
|
Other
long-term liabilities
|
-- | 2,377 | ||||||
|
Deferred
income tax liabilities
|
129,575 | 122,140 | ||||||
|
Total
Liabilities
|
547,968 | 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
|
382,612 | 380,364 | ||||||
|
Treasury
stock, at cost – 124 shares and 59 shares at
December
31 and March 31, 2008, respectively
|
(63 | ) | (47 | ) | ||||
|
Accumulated
other comprehensive income (loss)
|
(1,661 | ) | (999 | ) | ||||
|
Retained
earnings
|
123,575 | 99,254 | ||||||
|
Total
stockholders’ equity
|
504,964 | 479,073 | ||||||
|
Total
Liabilities and Stockholders’ Equity
|
$ | 1,052,932 | $ | 1,049,156 | ||||
Prestige
Brands Holdings, Inc.
Consolidated
Statements of Cash Flows
(Unaudited)
|
Nine
Months Ended December 31
|
||||||||
|
(In
thousands)
|
2008
|
2007
|
||||||
|
Operating
Activities
|
||||||||
|
Net
income
|
$ | 24,321 | $ | 23,568 | ||||
|
Adjustments
to reconcile net income to net cash provided by operating
activities:
|
||||||||
|
Depreciation
and amortization
|
8,273 | 8,260 | ||||||
|
Deferred
income taxes
|
7,393 | 7,366 | ||||||
|
Amortization
of deferred financing costs
|
1,696 | 2,283 | ||||||
|
Stock-based
compensation
|
2,248 | 758 | ||||||
|
Changes
in operating assets and liabilities
|
||||||||
|
Accounts
receivable
|
9,588 | (3,810 | ) | |||||
|
Inventories
|
945 | (486 | ) | |||||
|
Prepaid
expenses and other current assets
|
(527 | ) | (66 | ) | ||||
|
Accounts
payable
|
(2,450 | ) | (795 | ) | ||||
|
Accrued
liabilities
|
1,860 | (1,772 | ) | |||||
|
Net
cash provided by operating activities
|
53,347 | 35,306 | ||||||
|
Investing
Activities
|
||||||||
|
Purchases
of equipment
|
(397 | ) | (364 | ) | ||||
|
Business
acquisition purchase price adjustments
|
(4,191 | ) | (16 | ) | ||||
|
Net
cash used for investing activities
|
(4,588 | ) | (380 | ) | ||||
|
Financing
Activities
|
||||||||
|
Repayment
of long-term debt
|
(26,887 | ) | (37,125 | ) | ||||
|
Purchase
of common stock for treasury
|
(16 | ) | (5 | ) | ||||
|
Net
cash used for financing activities
|
(26,903 | ) | (37,130 | ) | ||||
|
Increase
(Decrease) in cash
|
21,856 | (2,204 | ) | |||||
|
Cash
- beginning of period
|
6,078 | 13,758 | ||||||
|
Cash
- end of period
|
$ | 27,934 | $ | 11,554 | ||||
|
Interest
paid
|
$ | 24,276 | $ | 29,828 | ||||
|
Income
taxes paid
|
$ | 7,251 | $ | 6,911 | ||||
Prestige
Brands Holdings, Inc.
Consolidating
Statements of Operations
(Unaudited)
|
Three
Months Ended December 31, 2008
|
||||||||||||||||
|
Over-the-
Counter
|
Household
|
Personal
|
||||||||||||||
|
Healthcare
|
Cleaning
|
Care
|
Consolidated
|
|||||||||||||
|
Net
sales
|
$ | 47,526 | $ | 27,586 | $ | 4,545 | $ | 79,657 | ||||||||
|
Other
revenues
|
69 | 552 | -- | 621 | ||||||||||||
|
Total
revenues
|
47,595 | 28,138 | 4,545 | 80,278 | ||||||||||||
|
Cost
of sales
|
16,892 | 18,253 | 2,672 | 37,817 | ||||||||||||
|
Gross
profit
|
30,703 | 9,885 | 1,873 | 42,461 | ||||||||||||
|
Advertising
and promotion
|
9,459 | 1,794 | 175 | 11,428 | ||||||||||||
|
Contribution
margin
|
$ | 21,244 | $ | 8,091 | $ | 1,698 | 31,033 | |||||||||
|
Other
operating expenses
|
11,071 | |||||||||||||||
|
Operating
income
|
19,962 | |||||||||||||||
|
Other
(income) expense
|
7,051 | |||||||||||||||
|
Provision
for income taxes
|
4,893 | |||||||||||||||
|
Net
income
|
$ | 8,018 | ||||||||||||||
|
Nine
Months Ended December 31, 2008
|
||||||||||||||||
|
Over-the-
Counter
|
Household
|
Personal
|
||||||||||||||
|
Healthcare
|
Cleaning
|
Care
|
Consolidated
|
|||||||||||||
|
Net
sales
|
$ | 137,090 | $ | 87,472 | $ | 15,380 | $ | 239,942 | ||||||||
|
Other
revenues
|
93 | 1,828 | -- | 1,921 | ||||||||||||
|
Total
revenues
|
137,183 | 89,300 | 15,380 | 241,863 | ||||||||||||
|
Cost
of sales
|
47,667 | 57,113 | 9,101 | 113,881 | ||||||||||||
|
Gross
profit
|
89,516 | 32,187 | 6,279 | 127,982 | ||||||||||||
|
Advertising
and promotion
|
25,150 | 6,595 | 640 | 32,385 | ||||||||||||
|
Contribution
margin
|
$ | 64,366 | $ | 25,592 | $ | 5,639 | 95,597 | |||||||||
|
Other
operating expenses
|
33,920 | |||||||||||||||
|
Operating
income
|
61,677 | |||||||||||||||
|
Other
(income) expense
|
22,513 | |||||||||||||||
|
Provision
for income taxes
|
14,843 | |||||||||||||||
|
Net
income
|
$ | 24,321 | ||||||||||||||
Prestige
Brands Holdings, Inc.
Consolidating
Statements of Operations
(Unaudited)
|
Three
Months Ended December 31, 2007
|
||||||||||||||||
|
Over-the-
Counter
|
Household
|
Personal
|
||||||||||||||
|
Healthcare
|
Cleaning
|
Care
|
Consolidated
|
|||||||||||||
|
Net
sales
|
$ | 45,015 | $ | 29,568 | $ | 5,061 | $ | 79,644 | ||||||||
|
Other
revenues
|
51 | 527 | -- | 578 | ||||||||||||
|
Total
revenues
|
45,066 | 30,095 | 5,061 | 80,222 | ||||||||||||
|
Cost
of sales
|
16,994 | 18,332 | 3,457 | 38,783 | ||||||||||||
|
Gross
profit
|
28,072 | 11,763 | 1,604 | 41,439 | ||||||||||||
|
Advertising
and promotion
|
7,045 | 2,271 | 256 | 9,572 | ||||||||||||
|
Contribution
margin
|
$ | 21,027 | $ | 9,492 | $ | 1,348 | 31,867 | |||||||||
|
Other
operating expenses
|
8,962 | |||||||||||||||
|
Operating
income
|
22,905 | |||||||||||||||
|
Other
(income) expense
|
9,326 | |||||||||||||||
|
Provision
for income taxes
|
5,160 | |||||||||||||||
|
Net
income
|
$ | 8,419 | ||||||||||||||
|
Nine
Months Ended December 31, 2007
|
||||||||||||||||
|
Over-the-
Counter
|
Household
|
Personal
|
||||||||||||||
|
Healthcare
|
Cleaning
|
Care
|
Consolidated
|
|||||||||||||
|
Net
sales
|
$ | 137,444 | $ | 89,838 | $ | 17,243 | $ | 244,525 | ||||||||
|
Other
revenues
|
51 | 1,566 | 28 | 1,645 | ||||||||||||
|
Total
revenues
|
137,495 | 91,404 | 17,271 | 246,170 | ||||||||||||
|
Cost
of sales
|
52,068 | 56,312 | 10,495 | 118,875 | ||||||||||||
|
Gross
profit
|
85,427 | 35,092 | 6,776 | 127,295 | ||||||||||||
|
Advertising
and promotion
|
21,080 | 6,474 | 821 | 28,375 | ||||||||||||
|
Contribution
margin
|
$ | 64,347 | $ | 28,618 | $ | 5,955 | 98,920 | |||||||||
|
Other
operating expenses
|
32,299 | |||||||||||||||
|
Operating
income
|
66,621 | |||||||||||||||
|
Other
(income) expense
|
28,608 | |||||||||||||||
|
Provision
for income taxes
|
14,445 | |||||||||||||||
|
Net
income
|
$ | 23,568 | ||||||||||||||