Irinquiries@prestigebrands.com
Prestige Consumer Healthcare Inc.
660 White Plains Road – Ste 250
Tarrytown, NY 10591
Telephone: 914-524-6819
[ X ] | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended September 30, 2010 |
OR |
[ ] | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from ____ to _____ |
Commission File Number: 001-32433 |
Delaware | 20-1297589 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer 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) |
Large accelerated filer o | Accelerated filer x | Non-accelerated filer o | Smaller reporting company o |
PART I. | FINANCIAL INFORMATION | |
Item 1. | Consolidated Financial Statements | |
Consolidated Statements of Operations — three and six month periods ended September 30, 2010 and 2009 (un
audited) | ||
Consolidated Balance Sheets — September 30, 2010 and March 31, 2010 (unaudited) | ||
Consolidated Statements of Cash Flows — six month periods ended September 30, 2010 and 2009 (unaudited) | ||
Notes to Consolidated Financial Statements | ||
Item 2. | Management's Discussion and Analysis of Financial Condition and Results of Operations | |
Item 3. | Quantitative and Qualitative Disclosure About Market Risk | |
Item 4. | Controls and Procedures | |
< div style="text-align:left;font-size:10pt;">PART II. | OTHER INFORMATION | |
Item 1. | Legal Proceedings | |
Item 6. | Exhibits | |
&nb
sp; | ||
Signatures | ||
Three Months Ended September 30 | Six Months Ended September 30 | |||||||||||||||
(In thousands, except share data) | 2010 | 2009 | 2010 | 2009 | ||||||||||||
R
evenues | ||||||||||||||||
Net sales | $ | 77,488 | $ | 80,308 | $ | 148,009 | $ | 147,805 | ||||||||
Other revenues | 815 | 421 | 1,529 | 1,037 | < div style="text-align:left;"> | |||||||||||
Total revenues | 78,303 | 80,729 | td> | 149,538 | 148,842 | |||||||||||
Cost of Sales | ||||||||||||||||
Cost of sales (exclusive of depreciation shown below) | 35,713 | 37,936 | 68,977 | 69,526 | ||||||||||||
Gross profit | 42,590 | 42,793 | 80,561 | 79,316 | ||||||||||||
Operating Expenses | ||||||||||||||||
Advertising and promotion | 8,240 | 9,675 | 15,726 | 18,343 | ||||||||||||
General and administrative | 8,101 | 10,481 | 15,514 | 18,675 | ||||||||||||
Depreciation and amortization | 2,413 | <
/font> | 2,703 | 4,823<
/font> | 4,911 | |||||||||||
Total operating expenses | 18,754 | 22,859 | 36,063 | 41,929 | ||||||||||||
Operating income | 23,836 | 19,934 | 44,498 | 37,387 | ||||||||||||
Other expense | ||||||||||||||||
Interest expense, net | 5,373 | 5,642 | 10,835 | 11,295 | ||||||||||||
Loss on extinguishment of debt | — | — | 300 | — | ||||||||||||
Total other expense | 5,373 | 5,64
2 | 11,135 | 11,295 | ||||||||||||
Income from continuing operations before income taxes | 18,463 | 14,292 | 33,363 | 26,092 | ||||||||||||
Provision for income taxes | 7,053 | 5,417 | &nb
sp; | 12,745 | 9,889 | |||||||||||
Income from continuing operations | 11,
410 | 8,875 | 20,618 | 16,203 | ||||||||||||
Discontinued Operations | ||||||||||||||||
Income from discontinued operations, net of income tax | 162 | 1,048 | 560
div> | 2,045 | ||||||||||||
Loss on sale of discontinued operations, net of income tax benefit | (550 | ) | — | (550 | ) | — | ||||||||||
Net income | $ | 11,022 | $ | 9,923 | $ | 20,628 | $ | 18,248 | ||||||||
Basic earnings per share: |  
; | &nb
sp; | ||||||||||||||
Income from continuing operations
| $ | 0.23 | $ | 0.18 | $ | 0.41 | $ | 0.32 | ||||||||
Net income | $ | 0.22 | $ | 0.20 | $ | 0.41 | $ | 0.36 | ||||||||
Diluted earnings per share: | ||||||||||||||||
Income from continuing operations | $ | 0.23 | $ | 0.18 | $ | 0.41 | $ | 0.32 | ||||||||
Net income | $ | 0.22 | $ | 0.20 | $ | 0.41 | $ | 0.36 | ||||||||
< /tr> | ||||||||||||||||
Weighted average shares outstanding: | ||||||||||||||||
Basic | 50,053 | 50,012
| 50,045 | 49,997 | ||||||||||||
Diluted | 50,141 | 50,055 | 50,123 | 50,080 |
(In thousands) Assets | September 30, 2010 | March 31, 2010 | |||||
Current assets | |||||||
Cash and cash equivalents | $ | 55,032 | $ | 41,097 | |||
Accounts receivable | 32,256 | 30,621 | |||||
Inventories | 24,997 | 27,676 | |||||
Deferred income tax assets | 6,663 | 6,353 | |||||
Prepaid expenses and other current assets | 3,203 | 4,917 | |||||
Current assets of discontinued operations | 14 |
1,486 | |||||
Total current assets | 122,165 | 112,150 | |||||
Property and equipment | 1,207 | 1,396 | |||||
Goodwill | 111,489 | 111,489 | |||||
Intangible assets | 549,855 | 554,359 <
/td> | |||||
Other long-term assets | 6,456 | 7,148 | |||||
Long-term assets of discontinued operations | — | 4,870 | |||||
Total Assets | $ | 791,172 | $ | 791,412 | |||
Liabilities and Stockholders' Equity | |||||||
Current liabilities | |||||||
Accounts payable | $ | 13,980 | $ | 12,771 | |||
Accrued interest payable | 6,428 | 1,561 | |||||
Other accrued liabilities | 9,912 | 11,733 | |||||
Current portion of long-term debt | 1,500 | 29,587 | |||||
Total current liabilities | 31,820 | 55,652 | |||||
Long-term debt | |||||||
Principal amount | 294,000 | 298,500 | |||||
Less unamortized discount | (3,658 | ) | (3,943 | ) | |||
Long-term debt, net of unamortized discount | 290,342 | 294,557 | |||||
Deferred income tax liabilities | 117,630 | 112,144 | |||||
Total Liabilities | 439,792 | 462,353 | |||||
Commitments and Contingencies — Note 17 | |||||||
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 - 50,175 shares at September 30, 2010 and 50,154 shares at March 31, 2010 | 502 | 502 | |||||
Additional paid-in capital | 385,771 | 384,027 |
|||||
Treasury stock, at cost - 131 shares at September 30, 2010 and 124 shares at March 31, 2010 | (114 | ) | (63 | ) | |||
Retained earnings (accumulated deficit) | (34,779 | ) | (55,407 | ) | |||
Total Stockholders' Equity | 351,380 | 329,059 | |||||
Total Liabilities and Stockholders' Equity | $ | 791,172 | $ | 791,412 |
Six Months Ended September 30 | |||||||
(In thousands) | 2010 | 2009 | |||||
Operating Activities | |||||||
Net income | $ | 20,628 | $ | 18,248 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Depreciation and amortization | 5,052 | 6,084 | |||||
Loss on sale of discontinued operations | 890 | — | |||||
Deferred income taxes | 5,176 |
3,687 | |||||
Amortization of deferred financing costs | 504 | 956 | |||||
Stock-based compensation costs | 1,744 | 848 | |||||
Loss on extinguishment of debt | 300 | — | |||||
Amortization of debt discount | 285 | — | |||||
Loss on disposition of equipment | 125 | — | |||||
Changes in operating assets and liabilities | |||||||
Accounts receivable | (1,635 | ) | (3,127 | ) | |||
Inventories | 2,679 | 405 | |||||
Inventories held for sale | 1,100 | 82 | |||||
Prepaid expenses and other current assets | 1,714 | (1,102 | ) | ||||
Accounts payable | 1,209 | 5,546 | |||||
Accrued liabilities | 3,046 | 8,253 | |||||
Net cash provided by operating activities | 42,817 | 39,880 | |||||
Investing Activities | |||||||
Purchas
es of equipment | (254 | ) | (232 | ) | |||
Proceeds from sale of discontinued operations | 4,122 | — | |||||
Net cash provided by (used for) investing activities | 3,868 | (232 | ) | ||||
Financing Activities | |||||||
Payment of deferred financing costs | (112 | ) | — | ||||
Repayment of long-term debt | (32,587 | ) | (40,000 | ) | |||
Purchase of treasury stock | (51 | ) | — | ||||
Net cash used for financing activities | (32,750 | ) | (40,000 | ) | |||
Increase (decrease) in cash | 13,935 | (352 | ) | ||||
Cash - beginning of period | 41,097 | 35,181 | |||||
Cash - end of period | $ | 55,032 | $ | 34,829 | |||
Interest paid | $ | 5,179 | $ | 10,350 | |||
Income taxes paid | $ | 5,103 | $ | 6,307 |
Years | |
Machinery | 5 |
Computer equipment | 3 |
Furniture and fixtures | 7 |
September 30, 2010 | M
arch 31, 2010 | ||||||
Inventory | $ | 14 | $ | 1,486 | |||
Intangible assets | — | 4,870 | |||||
Total assets of discontinued operations | $ | 14 | $ | 6,356 |
Three Months Ended September 30 | Six Months Ended September 30 | ||||||||||||||
2010 | 2009 | 2010 | 2009 | ||||||||||||
Components of Income | |||||||||||||||
Revenues | $ | 1,769 | $ | 5,587 | $ | 3,943 | $ | 10,698 | |||||||
Income before income taxes | 263 | 1,687 | 906 | 3,293 |
September 30, 2010 | |||||||
Trade accounts receivable | $ | 36,568 | $ | 35,527 | |||
Other receivables | 1,644 | 1,588 | |||||
38,212 | 37,115 | ||||||
Less allowances for discounts, returns and uncollectible accounts | (5,956 | ) | (6,494 | ) | |||
$ | 32,256 | $ | 30,621 |
September 30, 2010 | March 31, 2010 | ||||||
Packaging and raw materials | $ | 1,090 | $ | 1,818 | |||
Finished goods | 23,907 | 25,858 | |||||
$ | 24,997 | $ | 27,676 |
September 30, 2010 | March 31, 2010 | ||||||
Machinery | $ | 1,173 | $ | 1,620 | |||
Computer equipment | 1,803 | 1,570 | |||||
Furniture and fixtures | 239 | 239 | |||||
Leasehold improvements | 418 | 418 | |||||
3,633 | 3,847 | ||||||
Less accumulated depreciation | (2,426 | ) | (2,451 | ) | |||
&nbs
p; | |||||||
$ | 1,207 | $ | 1,396 |
Over-the- Counter Healthcare | Household Cleaning | Consolidated | |||||||||
Balance — March 31, 2010 | |||||||||||
Goodwill | $
font> | 240,432 | $ | 72,549 | $ | 312,981 | |||||
Accumulated purchase price adjustments | (6,162 | ) | — | (6,162 | ) | ||||||
Accumulated impairment losses | (130,170 | ) | (65,160 | ) | (195,330 | ) | |||||
104,100 | 7,389 | 111,489 | |||||||||
Net adjustments | |||||||||||
Goodwill | (4,643 | ) | — | (4,643 | ) | ||||||
Accumulated impairment losses | 4,643 | — | 4,643 | ||||||||
— | — | — | |||||||||
Balance — September 30, 2010 |  
; | ||||||||||
Goodwill | 235,789 | 72,549 | 308,338 | ||||||||
Accumulated purchase price adjustments | (6,162 | ) | — | (6,162 | ) | ||||||
Accumulated impairment losses | (125,527 | ) | (65,160 | ) | (190,687 | ) | |||||
$ | 104,100 | $ | 7,389 | $ | 111,489 |
Indefinite<
/div> Lived Trademarks | Finite Lived Trademarks | Non Compete Agreement | Totals | ||||||||||||
Carrying Amounts | |||||||||||||||
Balance — March 31, 2010 | $ | 454,571 | $ | 142,994 | $ | 158 | $ | 597,723 | |||||||
Additions | — | — | — | — | |||||||||||
Balance — September 30, 2010 | $ | 454,571 | $ | 142,994 | $ | 158 | $ | 597,723 | |||||||
Accumulated Amortization | |||||||||||||||
Balance — March 31, 2010 | $ | — | &nbs
p; | $ | 43,206 | $ | 158 | $ | 43,364 | ||||||
Additions | — |  
; | 4,504 | — | 4,504 | ||||||||||
Balance — September 30, 2010 | $ | — | $ | 47,710 | $ | 158 | $ | 47,868 | |||||||
Intangibles
, net — September 30, 2010 | $ | 454,571 | $ | 95,284 | $ | — | $ | 549,855 |
Year Ending September 30 | ||||
2011 | $ | 8,878 | ||
2012 | 8,466 | |||
2013 | 7,615 | |||
2014 | 6,256 | |||
2015 | 5,596 | |||
Thereafter | 58,473 | |||
$ | 95,284 |
September 30, 2010 | March 31, 2010 | ||||||
Accrued marketing costs | $ | 4,900 | $ | 3,823 | |||
Accrued payroll | 3,051 | 5,233 | |||||
Accrued commissions | 362 | 285 | |||||
Accrued income taxes | — | 372 | |||||
Ac
crued professional fees | 1,193 | 1,089 | |||||
Accrued severance | 404 | 929 | |||||
Other | 2 | 2 | |||||
$ | 9,912 | $ | 11,733 |
September 30, 2010 | March 31, 2010 | |||||||
Senior secured term loan facility (“2010 Senior Term Loan”) that bears interest at the Company's option at either the prime rate plus a margin of 2.25% or LIBOR plus 3.25% wit
h a LIBOR floor of 1.5%. At September 30, 2010, the average interest rate on the 2010 Senior Term Loan was 4.75%. Principal payments of $375,000 plus accrued interest are payable quarterly, with the remaining principal due on the 2010 Senior Term Loan maturity date. The 2010 Senior Term Loan matures on March 24, 2016 and is collateralized by substantially all of the Company's assets. The 2010 Senior Term Loan is unconditionally guaranteed by Prestige Brands Holdings, Inc. and its domestic wholly-owned subsidiaries, other than Prestige Brands, Inc., the borrower. Each of these guarantees is joint and several. There are no significant restrictions on the ability of any of the guarantors to obtain funds from their subsidiaries. | $ | 145,500 | $ | 150,000 | ||||
Senior unsecured notes (“2010 Senior Notes”) that bear interest at 8.25% which are payable on April 1st and October 1st of each year. The 2010 Senior Notes mature on April 1, 2018; however, the Company may earlier redeem some or all of the 2010 Senior Notes at redemption prices set forth in the indenture governing the 2010 Senior Notes. The 2010 Senior Notes are unconditionally guaranteed by Prestige Brands Holdings, Inc. and its domestic wholly-owned subsidiaries other than Prestige Brands, Inc., the issuer. Each of these guarantees is joint and several. There are no significant restrictions on the ability of any of the guarantors to obtain funds from their subsidiaries. | 150,000 | 150,000 | ||||||
Senior subordinated notes (“Senior Subordinated Notes”) that bore interest of 9.25% which was payable on April 15th and October 15th of each year. The balanc
e outstanding on the Senior Subordinated Notes as of March 31, 2010 was repaid in full, on April 15, 2010. The Senior Subordinated Notes were unconditionally guaranteed by Prestige Brands Holdings, Inc., and its domestic wholly-owned subsidiaries other than Prestige Brands, Inc., the issuer. | — | 28,087 | ||||||
295,500 | 328,087 | |||||||
Current portion of long-term debt | (1,500 | ) | (29,587 | ) | ||||
$ | 294,000 | $ | 298,500 | |||||
Less: unamortized discount on the 2010 Senior Term Loan and the 2010 Senior Notes | (3,658 | ) | (3,943 | ) | ||||
Long-term debt, net of unamortized discount | $ | 290,342 | $ | 294,557 |
Year Ending September 30 | ||||
2011 | $ | 1,500 | ||
2012 | 1,500 | |||
2013 | 1,500 | |||
2014 | 1,500 | |||
2015 | 1,500 | |||
Thereafter | 288,000 | |||
$ | 295,500 |
For the Three Months Ended September 30, 2010 | ||||||||||||||||||||
September 30, 2010 | Income Statement Account | Amount Income | Amount Gains | |||||||||||||||||
Cash Flow Hedging Instruments | Balance Sheet Location | Notional Amount | Fair Value Asset/ (Liability) | Gains/ Losses Charged | (Expense) Recognized In Income | (Losses) Recognized In OCI | ||||||||||||||
Interest Rate Swap | n/a | $ | — | $ | — | n/a | $ | — | $ | — |
For the Six Months Ended September 30, 2010 | ||||||||||||||||||||
September 30, 2010 | Income Statement Account | Amount Income | Amount Gains | |||||||||||||||||
Cash Flow Hedging Instruments | Balance Sheet Location | Notional Amount | Fair Value Asset/ (Liability) | Gains/ Losses Charged | (Expense) Recognized In Income | (Losses) Recognized In OCI | ||||||||||||||
Interest Rate Swap | n/a | $ | — | $ | — | n/a | $ | — | $ | — |
For the Three Months Ended September 30, 2009 | ||||||||||||||||||||
September 30, 2009 | Income Statement Account | Amount Income | Amount Gains | |||||||||||||||||
Cash Flow Hedging Instruments | Balance Sheet Location | Notional | Fair Value Asset/ (Liability) | Gains/ Losses Charged | (Expense) Recognized In Income | (Losses) Recognized In OCI | ||||||||||||||
Interest Rate Swap | Other Accrued Liabilities | $ | 125,000 | $ | (1,572 | ) | Interest Expense | $ | (729 | )
| $ | 444 |
For the Six Months Ended September 30, 2009 | ||||||||||||||||||||
September 30, 2009 | Income Statement Account | Amount Income | Amount Gains | |||||||||||||||||
Cash Flow Hedging Instruments | Balance Sheet Location | Notional Amount | Fair Value Asset/ (Liability) | Gains/ Losses Charged | (Expense) Recognized In Income | (Losses) Recognized In OCI | ||||||||||||||
Interest Rate Swap | Other Accrued Liabilities | $ | 125,000 | $ | (1,572 | ) | Interest Expense | $ | (1,260 | ) | $ | 580 |
Three Mont
hs Ended September 30 | |||||||
2010 | 2009 | ||||||
Components of Comprehensive Income | |||||||
Net income | $ | 11,022 | $ | 9,923 | |||
Unrealized gain on interest rate swaps, net of income tax of $168 (2009) | — | 276 | |||||
Comprehensive Income | $ | 11,022 | $ | 10,199 |
Six Months Ended September 30 | |||||||
2010 | 2009 | ||||||
Components of Comprehensive Income | |||||||
Net income | $ | 20,628 | $ | 18,248 | |||
Unrealized gain on interest rate swaps, net of income tax of $220 (2009) | — | 360 | |||||
Comprehensive Income | $ | 20,628 | $ | 18,608 |
Three Months Ended September 30 | Six Months Ended September 
;30 | |||||||||||||||
2010 | 2010 | 2009 | ||||||||||||||
Numerator | ||||||||||||||||
Income from continuing operations | $ | 11,410 | $ | 8,875 | $ | 20,618 | $ | 16,203 | ||||||||
Income from discontinued operations and loss on sale of discontinued operations | (388 | ) | 1,048 | 10 | 2,045 | |||||||||||
Net income | $ | 11,022 | $ | 9,923 | $ | 20,628 | $ | 18,248 | ||||||||
Denominator | ||||||||||||||||
Denominator for basic earnings per share — weighted average shares | 50,053 | 50,012 | 50,045 | 49,997 | ||||||||||||
Dilutive effect of unvested restricted common stock (including restricted st
ock units) and options issued to employees and directors | 88 | 43 | 78 | 83 | ||||||||||||
Denominator for diluted earnings per share | 50,141 | 50,055 | 50,123 | 50,080 | ||||||||||||
&n
bsp; | ||||||||||||||||
Earnings per Common Share: | ||||||||||||||||
Basic earnings per share from continuing operations | $ | 0.23 | $ | 0.18 | $ | 0.41 | $ | 0.32 | ||||||||
Basic earnings per share from discontinued operations | (0.01 | ) | 0.02 | — | 0.04 | |||||||||||
Basic net earnings per share | $ | 0.22 | $ | 0.20 | $ | 0.41 | $ | 0.36 | ||||||||
Diluted earnings per share from continuing operations | $ | 0.23 | $ | 0.18 | $ | 0.41 | $ | 0.32 | ||||||||
Diluted earnings per share from discontinued operations | (0.01 | ) | 0.02 | — | 0.04 | |||||||||||
Diluted net earnings per share | $ | 0.22 | $ | 0.20 | $ | 0.41 | $ | 0.36 |
Restricted Shares | Shares (in thousands) | Weighted- Average Grant-Date Fair Value | |||||
Nonvested at March 31, 2010<
/font> | 287.1 | < div style="text-align:left;font-size:10pt;">$ | 8.86 | ||||
Granted | 130.2 | 8.85 | |||||
Vested | (48.5 | ) | 9.23 | ||||
Forfeited | (15.0 | ) | 10.45 | ||||
Nonvested at September 30, 2010 | 353.8 | 8.74 | |||||
Nonvested at March 31, 2009 | 342.4 | 11.31 | |||||
Granted
td> | 171.6 | ||||||
Vested | (47.8 | ) | 10.97 | ||||
Forfeited | (152.2 | ) | |||||
Nonvested at September 30, 2009 | 314.0 | 8.94 | |||||
Six Months Ended September 30 | |||||||
2010 | 2009 | ||||||
Expected volatility | 52.7 | % | 45.6 | % | |||
Expected dividends | $ | — | $ | — | |||
Expected term in years | 6.5 | 7.0 | |||||
Risk-free rate | 3.4 | % | 2.8 | % |
Options | Shares (in thousands) | Weighted- Average Exercise Price | Weighted- Average Remaining Contractual<
/div> Term | Aggregate Intrinsic Value (in thousands) | ||||||||||
Outstanding at March 31, 2009 | 662.6 | $ | 11.65 | 8.8 | $ | — | ||||||||
Granted | 1,125.0 | <
font style="font-family:inherit;font-size:10pt;"> | 7.16 | 10.0 | — | |||||||||
Exercise
d | — | — | — | — | ||||||||||
Forfeited or expired | (142.6 | ) | 11.26 | 1.5 | — | |||||||||
Outstanding at September 30, 2009 | 1,645.0 | 8.61 | 9.4 | — | ||||||||||
Outstanding at March 31, 2010 | 1,584.2 | 8.50 | 8.9 | — | ||||||||||
Granted | 362.1
div> | 9.03 | 9.5 | 311.4 | ||||||||||
Exercised | — | — | — | — | ||||||||||
Forfeited or expired | (26.8 | ) | 10.44 | 7.1 | — | |||||||||
Outstanding at September 30, 2010 | 1,919.5 |
8.57 | 8.6 | 2,533.7 | ||||||||||
Exercisable at September 30, 2010 | 616.4 | 10.18 | 7.8 | — |
2010 | 2009 | ||||||
(In thousands) | |||||||
Balance — March 31 | $ | 315 | $ | 225 | |||
Adjustments based on tax positions related to the curre
nt year | — | — | |||||
Balance — September 30 | $ | 315 | $ | 225 |
Facilities | Equipment | Tota
l | ||||||||||
Year Ending September 30 | ||||||||||||
2011 | $ | 715 | $ | 81 | $ | 796 | ||||||
2012 | 610 | 54 | 664 | |||||||||
2013 | 587 | 37 | 624 | |||||||||
2014 | 348 | — | 348 | |||||||||
Thereafter | — | — | — | |||||||||
$ | 2,260 | $ | 172 | $ | 2,432 |
Year Ending September 30 | ||||
2011 | $ | 10,687 | ||
2012 | 1,971 | |||
2013 | 1,151 | |||
2014 | 1,120 | |||
2015 | 1,090 | |||
Thereafter | 4,131 | |||
$ | 20,150 |
For the Three Months End
ed September 30, 2010 | |||||||||||
Over-the- Counter Healthcare | Household Cleaning | Consolidated | |||||||||
(In thousands) | |||||||||||
Net sales | $ | 50,658 | $ | 26,830 | $ | 77,488 | |||||
Other revenues | 181 | 634 | 815 | ||||||||
Total revenues | 50,839 | 27,464 | 78,303 | ||||||||
Cost of sales | 17,798 | 17,915 | 35,713 | ||||||||
Gross profit | 33,041 | 9,549 | 42,590 | ||||||||
Advertising and promotion | 6,912 | 1,328 | <
font style="font-family:inherit;font-size:10pt;">8,240 | ||||||||
Contribution margin | $ | 26,129 | $ | 8,221 | 34,350 | ||||||
Other operating expenses | 10,514 | ||||||||||
Operating income | 23,836 | ||||||||||
Other expense | 5,373 | ||||||||||
Provision for income taxes | 7,053 | ||||||||||
Income from continuing operations | 11,410 | ||||||||||
Income from discontinued operations, net of income tax | 162 | ||||||||||
Loss on sale of discontinued operations, net of income tax benefit | (550 | ) | |||||||||
Net income | $ | 11,022 |
For the Six Months Ended September 30, 2010 | |||||||||||
Over-the- Counter Healthcare | Household Cleaning | Consolidated | |||||||||
(In thousands) | |||||||||||
Net sales | $ | 95,364 | $ | 52,645 | $ | 148,009 | |||||
Other revenues | 195 | 1,334 | 1,529 | ||||||||
Total revenues | 95,559 | 53,979 | 149,538 | ||||||||
Cost of sales | 33,649 | 35,328 | 68,977 | ||||||||
&nb
sp; | |||||||||||
Gross profit | 61,910
| 18,651 | 80,561 | ||||||||
Advertising and promotion | 12,075 | 3,651 | 15,726 | ||||||||
&n
bsp; | |||||||||||
Contribution margin | $ | 49,835 | $ | 15,000 | 64,835 | ||||||
Other operating expenses | 20,337 | ||||||||||
&n
bsp; | |||||||||||
Operating income | 44,498 | ||||||||||
Other expense | 11,135 | ||||||||||
Provision for income taxes | 12,745 | ||||||||||
Income from continuing operations | 20,618 | ||||||||||
Income from discontinued operations, net of income tax | 560 | ||||||||||
Loss on sale of discontinued operations, net of income tax benefit | (550 | ) | |||||||||
Net income | $ | 20,628 |
For the Three Months Ended September 30, 2009 | |||||||||||
Over-the- Counter Healthcare | Household Cleaning | Consolidated | |||||||||
(In thousands) | |||||||||||
Net sales | $ | 51,706 | $ | 28,602 | $ | 80,308 | |||||
Other revenues | 10 | 411 | 421 | ||||||||
Total revenues | 51,716 | 29,013 | 80,729 | ||||||||
Cost of sales | 19,453 | 18,483 | 37,936 | ||||||||
Gross profit | 32,263 | 10,530 | 42,793 | ||||||||
Advertising and promotion | 7,390 | 2,285 | 9,675 | ||||||||
Contribution margin | $ | 24,873 | $ | 8,245 | 33,118 | ||||||
Other operating expenses | 13,184 | ||||||||||
Operating income | 19,934 | ||||||||||
Other expense | <
/font> | 5,642 | |||||||||
Provision for income taxes | 5,417 | ||||||||||
Income from continuing operations | 8,875 | ||||||||||
Income from discontinued operations, net of income tax | 1,048 | ||||||||||
Net income | $ | 9,923 |
For the Six Months Ended September 30, 2009 | |||||||||||
Over-the- Counter Healthcare | Household Cleaning | Consolidated | |||||||||
(In thousands) | |||||||||||
Net sales | $ | 92,362 | $ | 55,443 | $ | 147,805 | |||||
Other revenues | 20 | 1,017 | 1,037 | ||||||||
Total revenues | 92,382 | 56,460 | 148,842 | ||||||||
Cost of sales | 33,242 | 36,284 | 69,526 | ||||||||
Gross profit | 59,140 | 20,176 | 79,316 | ||||||||
Advertising and promotion<
/font> | 14,139 | 4,204 | 18,343 | ||||||||
Contribution margin | $ | 45,001 | $ | 15,972 | 60,973 | ||||||
Other operating expenses | 23,586 | ||||||||||
Operating income | < div style="text-align:right;font-size:10pt;"> | 37,387 | |||||||||
Other expense | <
/div> | 11,295 | |||||||||
Provision for income taxes | 9,889 | ||||||||||
Income from continuing operations | 16,203 | ||||||||||
Income from discontinued operations, net of income tax | 2,045 | ||||||||||
Net income | $
| 18,248 |
(In thousands) | Over-the- Counter Healthcare | Hou
sehold Cleaning | Consolidated | ||||||||
Goodwill | $ | 104,100 | $ | 7,389 | $ | 111,489 | |||||
Intangible assets | |||||||||||
Indefinite-lived | 334,750 | 119,821 | 454,571 | ||||||||
Finite-lived | 63,013 | 32,271 | 95,284 | ||||||||
397,763 | 152,092 | ||||||||||
$ | 501,863 | $ | 159,481 | $ | 661,344 |
(In thousands) | Prestige Brands Holdings, Inc. | Prestige Brands, Inc., the issuer | Combined Subsidiary Guarantors | Combined Non- guarantor Subsidiaries | Eliminations | Consolidated | ||||||||||||||||||
Revenues | $ | — | $ | 49,713 | $ | 26,830 | $ | 945 | $ | — | $ | 77,488 | ||||||||||||
Other Revenue | — | 181 | < /td> | 634 | 513 | (513 | ) | 815 | ||||||||||||||||
Total Revenue | — | 49,894 | 27,464 | 1,458 | (513 | ) | 78,303 | |||||||||||||||||
Cost of Sales | ||||||||||||||||||||||||
Cost of Sales (exclusive of depreciation) | — | 17,980 | 17,915 | 331 | (513 | ) | 35,713 | |||||||||||||||||
Gross Profit | — | 31,914 | 9,549 | 1,127 | — | 42,590 | ||||||||||||||||||
Advertising and promotion | — | 6,651 | 1,328 | 261 | — | 8,240 | ||||||||||||||||||
General and administrative | (25 | ) | 5,677 | 2,811 | (362 | ) | — | 8,101 | ||||||||||||||||
Depreciation and amortization | 115 | 1,819 | 463 | 16 | — | 2,413 | ||||||||||||||||||
Total operating expenses | 90 | 14,147 | 4,602 | (85 | ) | — | 18,754 | |||||||||||||||||
Operating income (loss) | (90 | ) | < td colspan="2" style="vertical-align:bottom;background-color:#cceeff;padding-left:2px;padding-top:2px;padding-bottom:2px;border-top:1px solid #000000;border-bottom:1px solid #000000;"> | 4,947 | 1,212 | — | 23,836 | |||||||||||||||||
Other (income) expense | ||||||||||||||||||||||||
Interest income | (13,095 | ) | (2,322 | ) | — | (25 | ) | 15,442<
/font> | — | |||||||||||||||
Interest expense | — | 17,254 | 3,561 | — |
(15,442 | ) | 5,373 | |||||||||||||||||
Equity in income of subsidiaries | (3,026 | ) | — | — | — | 3,026 | — | |||||||||||||||||
Total other (income) expense | < div style="overflow:hidden;font-size:10pt;"> | (16,121 | ) | 14,932 | 3,561 | (25 | ) | 3,026 | 5,373 | |||||||||||||||
Income (loss) from continuing operations before income taxes | 16,031 | 2,835 | 1,386 | 1,237 | (3,026 | ) | 18,463 | |||||||||||||||||
Provision for income taxes | 5,009 | 1,302 | 529 | 213 | — | 7,053 | ||||||||||||||||||
Income (loss) from continuing operations |
11,022 | 1,533 | 857 | 1,024 | (3,026 | ) | 11,410 | |||||||||||||||||
Discontinued operations | ||||||||||||||||||||||||
Income from discontinued operations, net of income tax | — | 161 | 1 | — | — | 162 | ||||||||||||||||||
Loss on sale of discontinued operations, net of income tax benefit | — | (550 | ) | — | — | — | (550 | ) | ||||||||||||||||
Net income (loss) | $ | 11,022 | $ | 1,144 | $ | 858 | $ | 1,024 | $ | (3,026 | ) | $ | 11,022 |
(In thousands) | Prestige Brands Holdings, Inc. | Prestige Brands, Inc., the issuer | Combined Subsidiary Guarantors |
Combined Non- guarantor Subsidiaries | Eliminations | Consolidated | ||||||||||||||||||
Revenues | $ | — | $ | 50,417 | $
div> | 28,601 | $ | 1,290 | $ | — | $ | 80,308 | ||||||||||||
Other Revenue | — | 9 | 412 | 491 | (491 | ) | 421 | |||||||||||||||||
Total Revenue | — | 50,426 | 29,013 | 1,781 | (491 | ) | 80,729 | |||||||||||||||||
< /td> | ||||||||||||||||||||||||
Cost of Sales | ||||||||||||||||||||||||
Cost of Sales (exclusive of depreciation) | — | <
/div> | 19,418 | 18,483 | 526 | (491 | ) | 37,936 | ||||||||||||||||
Gross Profit | — | 31,008 | 10,530 | 1,255 | — | 42,793 | ||||||||||||||||||
Advertising and promotion | — | 6,998 | 2,285 | 392 | — | 9,675 | ||||||||||||||||||
General and administrative | (86 | ) | 6,492 | 4,043 | 32 | &mdash
; | 10,481 | |||||||||||||||||
Depreciation and amortization | 91 | 2,122 | 472 | 18 | — | 2,703 | ||||||||||||||||||
Total operating expenses | 5 | 15,612 | 6,800 | 442 | — | 22,859 | ||||||||||||||||||
Operating income (loss) | (5 | ) | 15,396 | 3,730 | 813 | — | 19,934 | |||||||||||||||||
Other (income) expense | ||||||||||||||||||||||||
Interest income | (13,185 | ) | (2,330 | ) | — | (33 | ) | 15,548 | — | |||||||||||||||
Interest expense | — | 17,604 | 3,586 | — | (15,548 | ) | 5,642 | |||||||||||||||||
Equity in income of subsidiaries | (1,742 | <
font style="font-family:inherit;font-size:8pt;">) | — | — | — | 1,742 | — | |||||||||||||||||
Total other (income) expense | (14,927 | ) | 15,274 | (33 | ) | 1,742 | 5,642 | |||||||||||||||||
Income (loss) from continuing operations before income taxes | 14,922 | 122 | 144 | 846 | (1,742 | ) | 14,292 | |||||||||||||||||
Provision for income taxes | 4,999 | 151 | 55 | 212 | — | 5,417 | ||||||||||||||||||
Income (loss) from continuing operations | 9,923 | (29 | ) | 89 | 634 | (1,742 | ) | 8,875 | ||||||||||||||||
Discontinued operations | ||||||||||||||||||||||||
Income from discontinued operations, net of income tax | — | 939 | 109 | — | — | 1,048 | ||||||||||||||||||
Net income (loss) | $ | 9,923 | $ | 910 | $ | 198 | $ | 634 | $ | (1,742 | ) | $ | 9,923 |
(In thousands) | Prestige Brands Holdings, Inc. | Prestige Brands, Inc., the issuer | Combined Subsidiary Guarantors | Combined Non- guarantor Subsidiaries | Eliminations | Consolidated | ||||||||||||||||||
Revenues |
$ | — | $ | 93,682 | $ | 52,645 | $ | 1,682 | $ | — | $ | 148,009 | ||||||||||||
Other Revenue | — | 195 | 1,334 | 990 | (990 | ) | 1,529 | |||||||||||||||||
Total Revenue | — | 93,877 | 53,979 | 2,672 | (990 | ) | 149,538 | |||||||||||||||||
Cost of Sales | ||||||||||||||||||||||||
Cost of Sales (exclusive of depreciation) | — | 34,017 | 35,328<
/div> | 622 | (990 | ) | 68,977 | |||||||||||||||||
Gross Profit | — | 59,860 | 18,651 | 2,050 | — | 80,561 | ||||||||||||||||||
Advertising and promotion | — | 11,632 | 3,651 | 443 | — | 15,726 | ||||||||||||||||||
General and administrative | (151 | ) | 10,205 | 5,399 | 61 | — | 15,514 | |||||||||||||||||
Depreciation and amortization | 226 | 3,638 | 926 | 33 | — | 4,823 | ||||||||||||||||||
Total operating expenses | 75 | 25,475 | 9,976 | 537 | — | 36,063 | ||||||||||||||||||
Operating income (loss) | (75 | ) | 34,385 | 8,675 | 1,513 <
/td> | — | 44,498 | |||||||||||||||||
Other (income) expense | ||||||||||||||||||||||||
Interest income | (26,070 | ) | (4,625 | ) | —
| (47 | ) | 30,742 | — | |||||||||||||||
Interest expense | — | 34,487 | 7,090 | — | (30,742 | ) | 10,835 | |||||||||||||||||
Loss on extinguishment of debt | — | 300 | — | — | — | 300 | ||||||||||||||||||
Equity in income of subsidiaries
td> | (4,622 | ) | — | — | — | 4,622 | — | |||||||||||||||||
Total other (income) expense | (30,692 | ) | 30,162 | 7,090 | (47 | )
font> | 4,622 | 11,135 | ||||||||||||||||
Income (loss) f
rom continuing operations before income taxes | 30,617 | 4,223 | 1,585 | 1,560 | (4,622 | ) | 33,363 | |||||||||||||||||
< div style="overflow:hidden;height:16px;font-size:10pt;"> | ||||||||||||||||||||||||
Provision for income taxes | 9,989 | 1,771 | 605 | 380 | — | 12,745 | ||||||||||||||||||
Income (loss) from continuing operations | 20,628 | 2,452 | 980 | 1,180 | (4,622 | ) | 20,618 | |||||||||||||||||
Discontinued operations | ||||||||||||||||||||||||
Income (loss) from discontinued operations, net of income tax | — | 563 | (3 | ) | — | — | 560 | |||||||||||||||||
Loss on sale of discontinued operations, net on income tax benefit | — | (550 | ) | — | — | — | (550 | ) | ||||||||||||||||
Net income (loss) | $ | 20,628 | $ | 2,465 | $
div> | 977 | $ | 1,180 | $ | (4,622 | ) | $ | 20,628 |
(In thousands) | Prestige Brands Holdings, Inc. | Prestige Brands, Inc., the issuer | Combined Subsidiary Guarantors | Combined Non- guarantor Subsidiaries | Eliminations | Consolidated | ||||||||||||||||||
Revenues | $ | — | $ | 90,606 | $ | 55,443 | $ | 1,756 | $ | — | $ | 147,805 | ||||||||||||
Other Revenue | — | 20 | 1,017 | 798 | (798 | ) | 1,037 | |||||||||||||||||
Total Revenue | < div style="text-align:right;font-size:8pt;">— | 90,626 | 56,460 | 2,554 | (798 | ) | 148,842 | |||||||||||||||||
Cost of Sales | ||||||||||||||||||||||||
Cost of Sales (exclusive of depreciation) | — | 33,340 | 36,284 | 700 | (798 | ) | 69,526 | |||||||||||||||||
Gross Profit | — | 57,286 | 20,176 | 1,854 | — | 79,316 | &nbs
p; | |||||||||||||||||
Advertising and promotion | — | 13,597 | 4,204 | 542 | — | 18,343 | ||||||||||||||||||
General and administrative | (247 | ) | 11,770 | 7,330 | (178 | ) | — | 18,675 | ||||||||||||||||
Depreciation and amortization | 178 |
| 3,754 | 945 | 34 | — | 4,911 | |||||||||||||||||
Total operating expenses (income) | (69 | ) | 29,121 | 12,479 | 398 | — | 41,929 | |||||||||||||||||
Operating income | 69 | 28,165 | 7,697 | 1,456 | — | |||||||||||||||||||
Other (income) expense | ||||||||||||||||||||||||
Interest income | (26,249 | ) | (4,645 | ) | — | (60 | ) | 30,954 | — | |||||||||||||||
Interest expense | — | 35,110 | 7,139 | — | (30,954 | ) | 11,295 | |||||||||||||||||
Equity in income of subsidiaries | (1,971 | ) | — | — | — | 1,971 | — | |||||||||||||||||
Total other (income) expense | (28,220 | ) | 30,465 | 7,139 | (60 | ) | 1,971 | 11,295 | ||||||||||||||||
Income (loss) from continuing operations before income taxes | 28,289 | (2,300 | ) | 558 | 1,516 | (1,971 | ) | 26,092 | ||||||||||||||||
Provision (benefit) for income t
axes | 10,041 | (668 | ) | 212 | 304 | — | 9,889 | |||||||||||||||||
Income (loss) from continuing operations | 18,248 | (1,632 | ) | 346 | 1,212 | (1,971 | ) | 16,203 | ||||||||||||||||
Discontinued operations | ||||||||||||||||||||||||
Income from discontinued operations, net of income tax | — | 1,823 | 222 | — | — | 2,045 | ||||||||||||||||||
Net income (loss) | $ | 18,248 | $ | 191 | $ | 568 | $ | 1,212 | $ | (1,971 | ) | $ | 18,248 |
(In thousands) | Prestige Brands Holdings, Inc. | Prestige Brands, Inc., the issuer | Combined Subsidiary Guarantors | Combined Non- guarantor Subsidiaries | Eliminations | Consolidated | ||||||||||||||||||
Assets
td> | ||||||||||||||||||||||||
Current assets | ||||||||||||||||||||||||
Cash and cash equivalents | $ | 54,323 | $ | — | $ | — | $ | 709 | $ | — | $ | 55,032 | ||||||||||||
Accounts receivable | 1,013 | 20,369 | 9,911 | 963 | — | 32,256 | ||||||||||||||||||
Inventories | — | 16,397 |
7,746 | 854 | — | 24,997 | ||||||||||||||||||
Deferred income tax assets | 2,658 | 3,577 | 427 | 1 | — | 6,663 | ||||||||||||||||||
Prepaid expenses and other current assets | 2,190 | 854 | 157 | 2 | — | 3,203 | ||||||||||||||||||
Current assets of discontinued operations | — | 14 | — | — | — | 14 | ||||||||||||||||||
Total current assets | 60,184 | 41,211 | 18,241 | 2,529 | — | 122,165 | ||||||||||||||||||
Property and equipment | 847 | 118 | 224 | 18 | — | 1,207 | ||||||||||||||||||
Goodwill | — | 104,099 | 7,390 | &m
dash; | — | 111,489 | ||||||||||||||||||
Intangible assets | — | 397,296 | 152,092 | 467 | — | 549,855 | ||||||||||||||||||
Other long-term assets | — | 6,456 | — | — | — | 6,456 | ||||||||||||||||||
Intercompany receivable | 716,220 | 736,784 | 92,165 | 4,944 | (1,550,113 | ) | — | |||||||||||||||||
Investment in subsidiary | 456,119 | — | — | — | (456,119 | ) | — | |||||||||||||||||
Total Assets | $ | 1,233,370 | $ | 1,285,964 | $ | 270,112 | $ | 7,958 | $ | (2,006,232 | ) | $ | 791,172 | |||||||||||
Liabilities and Stockholders’ Equity | ||||||||||||||||||||||||
Current liabilities | ||||||||||||||||||||||||
Accounts payable | $ | 1,694 | $ | 6,701 | $ | 4,730 | $ | 855 | $ | — | $ | 13,980 | ||||||||||||
Accrued interest payable | — | 6,428 | — | — | — | 6,428 | ||||||||||||||||||
Other accrued liabilities | (1,129 | ) | 15,957 | (5,152 | ) | 236 | — | 9,912 | ||||||||||||||||
Current portion of long-term debt | — | 1,500 | — | — | — | 1,500 | ||||||||||||||||||
Total current liabilities | 565 | 30,586 | (422 | ) | 1,091 | — | 31,820 | |||||||||||||||||
Long-term debt | ||||||||||||||||||||||||
Principal amount | — | 294,000 | —
| — | — | 294,000 |
| |||||||||||||||||
Less unamortized discount | — | (3,658 | ) | — | — | — | (3,658 | ) | ||||||||||||||||
Long-term debt, net of unamortized discount | — | 290,342 | — | &mdash
; | — | 290,342 | ||||||||||||||||||
Deferred income tax liabilities | (5 | ) | 95,411 | 22,129 | 95 | — | 117,630 | |||||||||||||||||
Intercompany payable | 713,618 | 661,864 | 173,906 | 725 | (1,550,113 | ) | — | |||||||||||||||||
Intercompany equity in subsidiaries | 167,812 | — | — | — | (167,812 | ) | — | |||||||||||||||||
Total Liabilities | 881,990 | 1,078,203 | 195,613 | 1,911 | (1,717,925 | ) | 439,792 | |||||||||||||||||
Stockholders’ Equity | ||||||||||||||||||||||||
Common Stock | 502 | — | — | — | — | 502 | ||||||||||||||||||
Additional paid-in capital | 385,771 | 337,458 | < /td> | 118,637 | 24 | (456,119 | ) | 385,771 | ||||||||||||||||
Treasury stock | (114 | ) | — | — | — | — | ) | |||||||||||||||||
Retained earnings (accumulated deficit) | (34
,779 | ) | (135,424 | ) | (44,138 | ) | 11,750 | 167,812 | (34,779 | ) | ||||||||||||||
Intercompany dividends | — | 5,727 | — | (5,727 | ) | — | — | |||||||||||||||||
Total Stockholders’ Equity | 351,380 | 207,761 | 74,499 | 6,047 | (288,307 | ) | 351,380 | |||||||||||||||||
Total Liabilities and Stockholders’ Equity | $ | 1,233,370 | $ | 1,285,964 | $ | 270,112 | $ | 7,958 | $ | (2,006,232 | ) | $ | 791,172 |
(In thousands) | Prestige Brands Holdings, Inc. | Prestige Brands, Inc., the issuer | Combined Subsidiary Guarantors | Combined Non- guarantor Subsidiaries | Eliminations | Consolidated | ||||||||||||||||||
Assets | ||||||||||||||||||||||||
Current assets | ||||||||||||||||||||||||
Cash and cash equivalents | $ | 40,644 | $ | — | $ | — | $ | 453 | $ | — | $ | 41,097 | ||||||||||||
Acc
ounts receivable | 1,054 | 18,865 | 10,025 | 677 | <
font style="font-family:inherit;font-size:8pt;">— | 30,621 | ||||||||||||||||||
Inventories | — | 19,798 | 7,257 | 621 | — | 27,676 | ||||||||||||||||||
Deferred income tax assets | 2,315 | 3,639 | 398 | 1 | — | 6,353 | ||||||||||||||||||
Prepaid expenses and other current assets | 4,442 | 226 | 248 | 1 | — | 4,917 | ||||||||||||||||||
Current assets of discontinued operations | — | 1,486 | — | — | — | 1,486 | ||||||||||||||||||
Total current assets | 48,455 | 44,014 | <
font style="font-family:inherit;font-size:10pt;"> | 17,928 | 1,753 | — | 112,150 | |||||||||||||||||
Property and equipment | 841 | 236 | 297 | — | 1,396 | |||||||||||||||||||
Goodwill | — | 104,099 | 7,390 | — | — | 111,489 | ||||||||||||||||||
Intangible assets | — | 400,900 | 152,964 | 495 | — | < div style="text-align:right;font-size:8pt;">554,359 | ||||||||||||||||||
Other long-term assets | —<
/font> | 7,148 | — | — | — | 7,148 | ||||||||||||||||||
Long-term assets of discontinued operations | — | 4,870 | — | — | — | 4,870 | ||||||||||||||||||
Intercompany receivable | 712,224 | 729,069 | 90,251 | 3,989 | (1,535,533 | ) | — | |||||||||||||||||
Investment in subsidiary | 456,119 | — | — | — | (456,119 | ) | — | |||||||||||||||||
Total Assets | $ | 1,217,639 | $ | 1,290,336 | $ | 268,830 | $ | 6,259 | $ | (1,991,652 | ) | $ | 791,412 | |||||||||||
Liabilities and Stockholders’ Equity | ||||||||||||||||||||||||
Current liabilities
font> | ||||||||||||||||||||||||
Accounts payable | $ | 2,526 | $ | 5,837 | $ | 4,060 | $ | 348 | $ | — | $ | 12,771 | ||||||||||||
Accrued interest payable | — | 1,561 | — | — | — | 1,561 | ||||||||||||||||||
Other accrued liabilities | 10,234 | 4,960 | (3,476 | ) | 15 | — | 11,733 | |||||||||||||||||
Current portion of long-term debt | — | 29,587 | — | — | — | 29,587 | ||||||||||||||||||
Total current liabilities | 12,760 | 41,945 | 584 | 363 | — | 55,652 | ||||||||||||||||||
Long-term debt | ||||||||||||||||||||||||
Principal amount | — | 298,500 | — | — | — | 298,500 | ||||||||||||||||||
Less unamortized discount | — | (3,943 | ) | — | — | — | (3,943 | ) | ||||||||||||||||
Long-term debt, net of unamortized discount | — | 294,557 | — | — | — | 294,557 | ||||||||||||||||||
Deferred income tax liabilities | (4 | ) | 91,828 | 20,224 | 96 | — | 112,144 | |||||||||||||||||
Intercompany payable | 703,389 | 656,711 | 174,500 | 933 | (1,535,533 | ) | — | |||||||||||||||||
Intercompany equity in subsidiaries | 172,435 | — | — | — | (172,435 | ) | — | |||||||||||||||||
Total Liabilities | 888,580 | 1,085,041 | 195,
308 | 1,392 | (1,707,968 | ) | 462,353 | |||||||||||||||||
Stockholders’ Equity | ||||||||||||||||||||||||
Common Stock | 502 | — | — | — | — | 502 | ||||||||||||||||||
Additional paid-in capital | 384,027 | 337,458 | 118,637 | 24 | (456,119 | ) | 384,027 | |||||||||||||||||
Treasury stock | (63 | ) | — | — | — | — | (63 | ) | ||||||||||||||||
Retained earnings (accumulated deficit) | (55,407 | ) | (137,890 | ) | (45,115 | ) | 10,570 | 172,435 | (55,407 | ) | ||||||||||||||
Intercompany dividends | — | 5,727 | — | (5,727 | ) | — | — | |||||||||||||||||
Total Stockholders’ Equity | 329,059 | 205,295 | 73,522 | 4,867 | (283,684 | ) | 329,059 | |||||||||||||||||
Total Liabilities and Stockholders’ Equity | $ | 1,217,639 | $ | 1,290,336 | $ | 268,830 | $ | 6,259 | $ | (1,991,652 | ) | $ | 791,412 |
(In thousands) | Prestige Brands Holdings, Inc. | Prestige Brands, Inc., the issuer | Combined Subsidiary Guarantors | Combined Non- guarantor Subsidiaries | Eliminations | Consolidated | ||||||||||||||||||
Operating Activities | ||||||||||||||||||||||||
Net income (loss) | $ | 20,628 | $ | 2,465 | $
| 977 | $ | 1,180 | $ | (4,622 | ) | $ | 20,628 | |||||||||||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||||||||||||||||||||||||
Depreciation and amortization | 226 | 3,867 | 926 | 33 | — | 5,052 | ||||||||||||||||||
Loss on sale of discontinued operations | — | 890 | — | — |
— | 890 | ||||||||||||||||||
Deferred income taxes
div> | (345 | ) | 3,645 | 1,877 | (1 | ) | — | 5,176 | ||||||||||||||||
Amortization of deferred financing costs | — | 504 | — | — | — | 504 | ||||||||||||||||||
Stock-based compensation costs | 1,744 | — | — | — | — | 1,744 | ||||||||||||||||||
Loss
on extinguishment of debt | — | 300 | — | — | — | 300 | ||||||||||||||||||
Amortization of debt discount | — | 285 | — | — | — | 285 | ||||||||||||||||||
Loss on disposal of equipment | — | 105 | 20 | — | — | |||||||||||||||||||
Changes in operating assets and liabilities | ||||||||||||||||||||||||
Accounts receivable | 41 | (1,504 | ) | 114 | (286 | ) | — | ) | ||||||||||||||||
Inventories | — | 3,401 | (489 | ) | (233 | ) | — | 2,679 | ||||||||||||||||
Inventories held for sale | — | 1,100 | — | — | — | 1,100 | ||||||||||||||||||
Prepaid expenses and other current assets | 2,252 | (628 | ) | 91 | (1 | ) | — | 1,714 | ||||||||||||||||
Accounts payable | (832 | ) | 864 | 670 | 507 | — | 1,209
div> | |||||||||||||||||
Accrued liabilities | (4,178 | ) | 8,679 | (1,676 | ) | 221 | — | 3,046 | ||||||||||||||||
Net cash provided by (used for) operating activities | 19,536 | 23,973 | 2,510 | 1,420 | (4,622 | ) | 42,817 | |||||||||||||||||
Investing Activities | ||||||||||||||||||||||||
Purchases of equipment | (230 | ) | (22 | ) | — | (2 | ) | — | (254 | ) | ||||||||||||||
Proceeds from sale of discontined operations | — | 4,122 | — | — | — | 4,122 | ||||||||||||||||||
Net cash (used for) provided by investing activities | (230 | ) | 4,100 | — | (2 | ) | — | 3,868 | ||||||||||||||||
Financing Activities | ||||||||||||||||||||||||
Payment of deferred financing costs | — | (112 | ) | — | — | — | (112 | ) | ||||||||||||||||
Repayment of long-term debt | — | (32,587 | ) | — | — | — | (32,587 | ) | ||||||||||||||||
Purchase of treasury stock | (51 | ) | — | — | — | — | (51 | ) | ||||||||||||||||
Intercompany activity, net | (5,576 | ) | 4,626 | (2,510 | ) | (1,162 | ) | 4,622 | — | |||||||||||||||
Net cash (used for) provided by financing activities | (5,627 | ) | (28,073 | ) | (2,510 | ) | (1,162 | ) | (32,750 | ) | ||||||||||||||
Increase in cash | 13,679 | — | — | 256 | — | 13,935 | ||||||||||||||||||
Cash - beginning of year | 40,644 | — | — | 453 | — | 41,097 | ||||||||||||||||||
Cash - end of year | $ | 54,323 | $ | — | $ | — | $ | 709 | $ | — | $ | 55,032 |
(I
n thousands) | Prestige Brands Holdings, Inc. | Prestige Brands, Inc., the issuer | Combined Subsidiary Guarantors | Combined Non- guarantor Subsidiaries | Eliminations | Consolidated | ||||||||||||||||||
Operating Activities | ||||||||||||||||||||||||
Net income (loss) | $ | 18,248 | $ | 191 | $ | 568 | $ | 1,212 | $ | (1,971 | ) | $ | 18,248 | |||||||||||
Adjustments to reconcile net income (loss) to
net cash provided by operating activities: | ||||||||||||||||||||||||
Depreciation and amortization | 179 | 4,328 | 1,543 | 34 | — | 6,084 | ||||||||||||||||||
Loss on sale of discontinued operations | — | — | — | — | — | — | ||||||||||||||||||
Deferred income taxes | (552 | ) | 2,409 | 1,823 | 7 | — | 3,687 | |||||||||||||||||
Amortization of deferred financing costs | — | 956 | — | — | — | 956 | ||||||||||||||||||
Stock-based compensation costs | 848 | — | — | — | — | 848 | ||||||||||||||||||
Loss on extinguishment of debt | — | — | — | — | — |
— | ||||||||||||||||||
Amortization of debt discount | — | — | — | — | — | — | ||||||||||||||||||
Loss on disposal of equipment | —
| — | — | — | — | — | ||||||||||||||||||
Changes in operating assets and liabilities | ||||||||||||||||||||||||
Accounts receivable | 505 | (3,734 | ) | 852 | (750 | ) | — | (3,127 | ) | |||||||||||||||
Inventories | — | <
/div> | 713 | 122 | (430 | ) | — | 405 | ||||||||||||||||
Inventories held for sale | — | 203 | ) | — | — | 82 | ||||||||||||||||||
Prepaid expenses and other current assets | (780 | ) | (236 | ) | (85 | ) | (1 | ) | — | (1,102 | ) | |||||||||||||
Accounts payable | 525 | 2,199 | 2,197 | 625 | — | 5,546 | ||||||||||||||||||
Accrued liabilities | 4,284 | 4,003 | (306 | ) | 272 | — | 8,253 | |||||||||||||||||
Net cash provided by (used for) operating activities | 23,257 | 11,032 | 6,593 | 969 | (1,971 | ) | 39,880 | |||||||||||||||||
Investing Activities | ||||||||||||||||||||||||
Purchases of equipment | (178 | ) | (24 | ) | — | (30 | ) | — | (232 | ) | ||||||||||||||
Proceeds from sale of discontined operations | — | — | — | — | — | — | ||||||||||||||||||
Net cash used for investing activities | (178 | ) | (24 | ) | — | (30 | ) | — | (232 | ) | ||||||||||||||
Financing Activities | ||||||||||||||||||||||||
Payment of deferred financing costs | — | — | — | — | — | — | ||||||||||||||||||
Repayment of long-term debt | — | (40,000 | ) | — | — | — | (40,000 | ) | ||||||||||||||||
Purchase of treasury stock | — | — | — | — |
— | — | ||||||||||||||||||
Intercompany activity, net | (23,343 | ) | 28,992 | (6,593 | ) | (1,027 | ) | 1,971 | — | |||||||||||||||
Net cash (used for) provided by financing activities | (23,343 | ) | (11,008 | ) | (6,593 | ) | (1,027 | ) | 1,971 | (40,000 | ) | |||||||||||||
Increase (decrease) in cash | (264 | ) | — | — | (88 | ) | < div style="text-align:right;font-size:8pt;">— | (352 | ) | |||||||||||||||
Cash - beginning of year | 34,458 | — | — | 723 | — | 35,181 | ||||||||||||||||||
Cash - end of year | $ | 34,194 | $ | — | $ | — | $ | 635 | $ | — | $ | 34,829 |
See also “Cautionary Statement Regarding Forward-Looking Statements” on page 52 of this Quarterly Report on Form 10-Q. |
September 30, 2010 | March 31, 2010 | ||||||
Inventory | $ | 14 | $
| 1,486 | |||
Intangible assets | — | 4,870 | |||||
Total assets of discontinued operations | $ | 14 | $ | 6,356 |
Three Months Ended September 30 | Six Months Ended September 30 | ||||||||||||||
2010 | 2009 | 2010 | 2009 | ||||||||||||
Components of Income | |||||||||||||||
Revenues | $ | 1,769 | $ | 5,587 | $ | 3,943 | $ | 10,698 | |||||||
Income before income taxes | 263 | 1,687 | 906 | 3,293 |
2010 | 2009 | Increase | ||||||||||||||||
Revenues | % | Revenues | % | (Decrease) | % | |||||||||||||
OTC Healthcare | $ | 50,839 | 64.9 | $ | 51,716 | 64.1 | $ | (877 | ) | (1.7 | ) | |||||||
Household Cleaning | 27,464 | 35.1 | 29,013 | 35.9 | (1,549 | ) | (5.3 | ) | ||||||||||
$ | 78,303 | 100.0 | $ | 80,729 | 100.0 | $ | (2,426 | ) | (3.0 | ) |
2010 | 2009 | Increase | ||||||||||||||||
 
; | Gross Profit | % | Gross Profit | % | (Decrease) | % | ||||||||||||
<
/font> | ||||||||||||||||||
OTC Healthcare | 33,041 | 65.0 | $ | 32,263 | 62.4 | $ | 778 | 2.4 | ||||||||||
Household Cleaning | 9,549 | 34.8 | 10,530 | 36.3 | (981 | ) | (9.3 | ) | ||||||||||
$ | 42,590 | $ | 42,793 | 53.0 | $ | (203 | ) | (0.5 | ) |
2010 | 2009 | |||||||||||||||||
Contribution
Margin | % | Contribution Margin | % | Increase (Decrease) | % | |||||||||||||
OTC Healthcare | $ | 26,129 | 51.4 | $ | 24,873 | 48.1 | $ | 1,256 | 5.0 | |||||||||
Household Cleaning | 8,221 | 29.9 | 8,245 | 28.4 | (24 | ) | (0.3 | ) | ||||||||||
$ | 34,350 | 43.9 | $ | 33,118 | 41.0 | $ | 1,232 | 3.7 |
2010 | 2009 | Increase | ||||||||||||||||
Revenues | % | Revenues | % | (Decrease) | % | |||||||||||||
OTC Healthcare | $ | 95,559 | 63.9 | $ | 92,382 | 62.1 | $ | 3,177 | 3.4 | |||||||||
Household Cleaning
div> | 53,979 | 36.1 | 56,460 | 37.9 | (2,481 | ) | (4.4 | ) | ||||||||||
$ | 149,538 | $ | 148,842 | 100.0 | $ | 696 | 0.5 |
2010 | 2009 | Increase | ||||||||||||||||
Gross Profit | % | Gross Profit | % | (Decrease) | % | |||||||||||||
| ||||||||||||||||||
OTC Healthcare | $ | 61,910 | 64.8 | $ | 59,140 | 64.0 | $ | 2,770 | 4.7 | |||||||||
Household Cleaning | 18,651 | 34.6 | 20,176 | 35.7 | (1,525 | ) | (7.6 | ) | ||||||||||
&n
bsp; | $ | 80,561 | 53.9 | $ | 79,316 | 53.3 | $ | 1,245 | 1.6 |
2010 | 2009 | |||||||||||||||||
Contribution Margin | % | Contribution Margin | % |  
; | Increase (Decrease) | % | ||||||||||||
OTC Healthcare | $ | 49,835 | 52.2 | $ | 45,001 | 48.7 | $ | 4,834 | 10.7 | |||||||||
Household Cleaning <
/td> | 15,000 | 27.8 | 15,972 | 28.3 | (972 | ) | (6.1 | ) | ||||||||||
$ | 64,835 | 43.4 | $ | 60,973 | 41.0 | $ | 3,862 | 6.3 |
Six Months Ended September 30 | |||||||
(In thousands) | 2010 | 2009 | |||||
Cash provided by (used for): | |||||||
Operating Activities | $ | 42,817 | $ | 39,880 | |||
Investing
Activities | 3,868 | (232 | ) | ||||
Financing Activities | (32,750 | ) | (40,000 | ) |
• | $145.5 million of borrowings under the 2010 Senior Term Loan, and |
• | $150.0 million of 8.25% Senior Notes due 2018. |
• | Have a leverage ratio of less than 4.30 to 1.0 for the quarter ended September 30, 2010, decreasing over time to 3.50 to 1.0 for the quarter ending March 31, 2014, and remaining level thereafter, and |
• | Have an interest coverage ratio of greater than 2.75 to 1.0 for the quarter ended September 30, 2010, increasing over time to 3.25 to 1.0 for the quarter ending March 31, 2013, and remaining level thereafter. |
(In thousands) | Over-the- Counter Healthcare | Household Cleaning | Consolidated | ||||||||
Goodwill | $ | 104,100 | $ | 7,389 | $ | 111,489 | |||||
< /td> | &
nbsp; | ||||||||||
Intangible assets | |||||||||||
Indefinite-lived | 334,750 | 119,821 | 454,571 | ||||||||
Finite-lived | 63,013 | 32,271 | 95,284 | ||||||||
397,763 | 152,092 | 549,855 | |||||||||
$ | 501,863 | $ | 159,481 | $ | 661,344 |
• | Brand History |
• | Market Position |
• | Recent and Projected Sales Growth |
• | History of and Potential for Product Extensions |
Percent by which | |||||||
Fair Value | |||||||
(In thousands) | Exceeded | ||||||
Carrying Value in | |||||||
Operating Segment | March 31, 2010
| Annual Test | |||||
Over-the-Counter Healthcare | $ | 104,100 | 26.9 | ||||
Household Cleaning |
7,389 | 8.6 | |||||
$ | 111,489 | ||||||
Percent by which | |||||||
Fair Value | |||||||
(In thousands) | Exceeded | ||||||
Carrying Value in | |||||||
Operating Segment | March 31, 2010 | Annual Test | |||||
Over-the-Counter Healthcare | $ | 334,750 | 63.7 | ||||
Household Cleaning | 119,821 | 20.2 | |||||
$ | 454,571 | ||||||
td> | |
• | Reviews period-to-period sales and profitability by brand, |
• | Analyzes industry trends and projects bran
d growth rates, |
• | Prepares annual sales forecasts, |
• | Evaluates advertising effectiveness, |
• | Analyzes gross margins, |
• | Reviews contractual benefits or limitations, |
• | Monitors competitors' advertising spend and product innovation, |
< /tr> | |
• | Prepares projections to measure brand viability over the estimated useful life of the intangible asset, and |
• | Consid
ers the regulatory environment, as well as industry litigation. |
• | Type of instrument (i.e., restricted shares vs. an option, warrant or performance shares), |
• | Strike price of the instrument, |
• | Market price of the Company's common stock on the date of grant, |
•&n
bsp; | Discount rates, |
• | Duration of the instrument, and |
• | Volatility of the Company's common stock in the public market. |
• | Rules and regulations promulgated by regulatory agencies, |
• | Sufficiency of the evidence in support of our position, |
• | Anticipated costs to support our position, and |
• &n
bsp; | Likelihood of a positive outcome. |
• | General economic conditions affecting our products and their respective markets, |
• | Our ability to increase organic growth via new product introductions or line extensions,
|
• | The high level of competition in our industry and markets (including, without limitation, vendor and SKU rationalization and expansion of private label product offerings), |
• | Our ability to invest in research and development, |
• | Our dependence on a limited number of customers for a large portion of our sales, |
• | Disruptions in our distribution center, |
• | Acquisitions, dispositions or other strategic transactions diverting managerial resources, or incurrence of additional liabilities or integration problems associated with such transactions, |
• | Changing consumer trends or pricing pressures which may cause us to lower our prices, |
• | Increases in supplier prices and transportation and fuel charges, |
•
div> | Our ability to protect our intellectual property rights, |
• | Shortages of supply of sourced goods or interruptions in the manufacturing of our products, |
• | Our level of indebtedness, and ability to service our debt, |
• | Any adverse judgments rende
red in any pending litigation or arbitration, |
• | Our ability to obtain additional financing, and |
• | The restrictions on our operations imposed by our Senior Credit Facility and the Indenture governing our Senior Notes. |
PRESTIGE BRANDS HOLDINGS, INC. | ||||
< div style="text-align:left;font-size:10pt;"> | ||||
Date: | November 5, 2010 | By: | /s/ PETER J. ANDERSON | |
Peter J. Anderson | ||||
Chief Financial Officer | ||||
(Principal Financial Officer and | ||||
Duly Authorized Officer) |
2.1 | Stock Purchase Agreement, dated as of September 14, 2010, by and among Prestige Brands Holdings, Inc., Blacksmith Brands Holdings, Inc. and the Stockholders of Blacksmith Brands Holdings, Inc. (incorporated by reference to Exhibit 2.1 to the Company's Current Report on Form 8-K filed with the Commission on September 20, 2010) | ||
31.1 | Certification of Principal Executive Officer of Prestige Brands Holdings, Inc. pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934. | ||
31.2 | Certification of Principal Financial Officer of Prestige Brands Holdings, Inc. pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934. | ||
32.1 | Certification of Principal Executive Officer of Prestige Brands Holdings, Inc. pursuant to Rule 13a-14(b) and Section 1350 of Chapter 63 of Title 18 of the United States Code. | ||
32.2 | Certification of Principal Financial Officer of Prestige Brands Holdings, Inc. pursuant to Rule 13a-14(b) and Section 1350 of Chapter 63 of Title 18 of the United States Code. |
1. | I have reviewed this Quarterly Report on Form 10-Q of Prestige Brands Holdings, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information in
cluded in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financia
l reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being pre
pared; |
b. | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c. | Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d. | Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
5. | The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): |
a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial re
porting. |
Date: | November 5, 2010 | /s/ Matthew Mannelly | |
Matthew Mannelly | |||
Chief Executive Officer |
1. | I have reviewed this Quarterly Report on Form 10-Q of Prestige Brands Holdings, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information
included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over finan
cial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being
prepared; |
b. | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c. | Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
5. | The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): |
a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial
reporting. |
Date: | November 5, 2010 | /s/ Peter J. Anderson | |
Peter J. Anderson | |||
Chief Financial Officer |
/s/ Matthew Mannell
y | ||
Name: | Matthew Mannelly | |
Title: | Chief Executive Officer | |
Date: | November 5, 2010 |
/s/ Peter J. Anderson | ||
Name: | Peter J. Anderson | |
Title: | Chief Financial Officer | |
Date: | November 5, 2010 |