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 9, 2012
PRESTIGE BRANDS HOLDINGS, INC.
(Exact name of registrant as specified in its charter)
Delaware | 001-32433 | 20-1297589 | ||
(State or other jurisdiction of incorporation) | (Commission File Number) | (IRS 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)
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 9, 2012, Prestige Brands Holdings, Inc. (the “Company”) announced financial results for the fiscal quarter and nine months ended December 31, 2011. A copy of the press release announcing the Company's earnings results for the fiscal quarter and nine months ended December 31, 2011 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.
On February 9, 2012, representatives of the Company began making presentations to investors regarding the Company's financial results for the quarter and nine months ended December 31, 2011 using slides containing the information attached to this Current Report on Form 8-K as Exhibit 99.2 (the “Investor Presentation”). The Company expects to use the Investor Presentation, in whole or in part, and possibly with modifications, in connection with presentations to investors, analysts and others during 2012.
By filing this Current Report on Form 8-K and furnishing the information contained herein, the Company makes no admission as to the materiality of any information in this report that is required to be disclosed solely by reason of Regulation FD.
The information contained in the Investor Presentation is summary information that is intended to be considered in the context of the Company's Securities and Exchange Commission (“SEC”) filings and other public announcements that the Company may make, by press release or otherwise, from time to time. The Company undertakes no duty or obligation to publicly update or revise the information contained in this report, although it may do so from time to time as its management believes is warranted. Any such updating may be made through the filing of other reports or documents with the SEC, through press releases or through other public disclosure.
In accordance with General Instruction B.2 of this Current Report on Form 8-K, the information presented in Items 2.02 and 7.01 of this Current Report on Form 8-K and Exhibits 99.1 and 99.2 shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, unless the Company specifically states that the information is to be considered “filed” under the Exchange Act or incorporates it by reference into a filing under the Securities Act of 1933, as amended, or the Exchange Act.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
See Exhibit Index immediately following the signature page.
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 9, 2012 | PRESTIGE BRANDS HOLDINGS, INC. | ||
By: | /s/ Ronald M. Lombardi | ||
Name: Ronald M. Lombardi | |||
Title: Chief Financial Officer | |||
EXHIBIT INDEX
Exhibit | Description | |
99.1 | Press Release dated February 9, 2012 announcing the Company's financial results for the fiscal quarter and nine months ended December 31, 2011 (furnished only). | |
99.2 | Investor Relations Slideshow in use beginning February 9, 2012 (furnished only). | |
Exhibit 99.1
Prestige Brands Holdings, Inc. Reports Fiscal 2012 Third Quarter Sales Increase of 17.3%; Operating Income Up 81.4%; Acquisition of 15 OTC Brands from GSK Completed
Irvington, NY, February 9, 2012-Prestige Brands Holdings, Inc. (NYSE-PBH) today announced results for the fiscal 2012 third quarter ended December 31, 2011, including net revenues of $106.3 million, an increase of 17.3% over the prior year's comparable quarter of $90.6 million. Net revenues for the nine month period of fiscal 2012 were $307.1 million, an increase of 27.9% over the prior year's comparable period of $240.1 million. This growth is largely driven by the fiscal 2011 acquisitions of Blacksmith Brands and Dramamine®, and the growth of the Company's legacy core Over-The-Counter (OTC) products. Net revenues for the Company's legacy core OTC brands were 3.2% and 5.7% higher than the prior year's comparable quarter and nine month periods, respectively, representing the sixth consecutive quarter of organic growth, excluding acquisitions.
Operating income for the third quarter of fiscal 2012 was $23.6 million, 81.4% higher than the prior year's comparable quarter of $13.0 million. Operating income for the first nine months of fiscal 2012 was $80.3 million, 39.5% higher than the prior year's comparable period of $57.5 million. These increases include the impact of the acquisitions completed in fiscal 2011, as well as expenses related to the acquisition of the brands from GSK.
Income from continuing operations for the third quarter of fiscal 2012 was $9.5 million, compared to $2.1 million in the prior year's comparable quarter. The current and prior year's fiscal third quarters were impacted by acquisition-related costs of $3.0 million and $8.2 million, respectively, net of tax of $1.9 million and $3.1 million, respectively. Excluding the impact of
these charges, income from continuing operations for the third quarter of fiscal 2012 would have been $12.5 million, 21.5% higher than the prior year's comparable quarter of $10.3 million. Income from continuing operations for the first nine months of fiscal 2012 was $37.2 million, 63.5% higher than the prior year's comparable period of $22.8 million.
The current fiscal nine month period included the net impact of the $3.0 million of GSK acquisition-related costs, which was largely offset by a net gain associated with a legal settlement, and other net costs totaling approximately $2.9 million. The prior year's fiscal nine month period included the net impact of the $8.2 million Blacksmith acquisition-related costs. Excluding the impact of these charges, income from continuing operations for the first nine months of fiscal 2012 would have been $37.3 million, 20.7% higher than the prior year's comparable quarter of $30.9 million.
Reported net income for the third quarter of fiscal 2012 was $9.5 million, or $0.19 per diluted share, 336.6% higher than the prior year's comparable quarter of $2.2 million, or $0.04 per diluted share. Excluding the costs mentioned above in each of the respective periods, net income for the current third fiscal quarter would have been $12.5 million, or EPS of $0.25, compared to $10.3 million in the prior year's comparable quarter, or EPS of $0.21.
Reported net income for the first nine months of fiscal 2012 was $37.2 million, or 63.2% higher than the prior year's comparable period of $22.8 million. Excluding the amounts mentioned above in each of the respective periods, net income would have been $37.3 million for the first nine months of fiscal 2012, compared to $30.9 million in the prior fiscal year period. Excluding the costs referenced above, earnings per diluted share would have been $0.74 for the first nine months of fiscal 2012 compared to $0.62 in the prior year's nine month period, an increase of 19.4%.
Subsequent To The Close of the Quarter
On January 31, 2012, the Company completed the acquisition of fifteen of the seventeen OTC brands it agreed to purchase from GlaxoSmithKline(GSK), previously announced on December 20, 2011. The acquisition of the remaining two brands from GSK is expected to be completed during the first half of the year. The purchase price for the acquisition (inclusive of inventory) was $615 million, subject to a customary post-closing inventory adjustment. On January 31, 2012, to fund the acquisition, the Company completed the financing of additional bond and bank debt of $250 million and $660 million, respectively, the repayment of existing senior secured credit facilities and the payment of related transaction expenses. The acquisition of the GSK brands is the largest in the Company's history and a major step toward its commitment to its long-term OTC strategy.
Commentary and Outlook
Matthew M. Mannelly, CEO, commented, “We are pleased with our third quarter results, which reflect the successful execution of our stated strategy of core OTC growth combined with value-added acquisitions. We registered strong growth from our nine core OTC brands, resulting in solid market share gains across these categories. Both the Little Remedies® brand and the PediaCare® brand, which we acquired last year, experienced impressive revenue and share gains for both the quarter and the nine month year over year periods, despite a very soft cough/cold season. In addition, our diversified portfolio of OTC brands and platforms helped offset the headwinds of a tough cough/cold season," he said.
“Our disciplined approach to creating shareholder value continues to strategically transform the Company. The purchase of the seventeen well-known consumer brands from GSK represents the largest acquisition in our history. The brands are an excellent strategic and operational fit
for Prestige, adding two new platforms and four new core brands to our business. They are well-aligned with our operating model, requiring limited incremental overhead, and are highly cash generative. We are confident we can rapidly transition these brands into our portfolio based on our track record of successful integration of previous acquisitions. Prestige's industry-leading Free Cash Flow will help us rapidly delever," he said.
"Our outlook for Q4 is one of cautious optimism given the challenging economic and retail environment, as well as the overall incident level of the cough/cold season to date. The GSK acquisition is expected to add approximately $30 million to our fourth quarter revenue and be neutral to EPS, excluding transaction-related and integration costs," he said.
Results by Segment
OTC Healthcare
Net revenues for the OTC Healthcare segment in the third quarter of fiscal 2012 were $84.9 million, or 25.9% higher than the prior year third quarter of $67.5 million. The revenue increase in the OTC Healthcare segment was led by strong sales of Little Remedies®, and The Doctor's®. In the third quarter of fiscal 2012, the five legacy core OTC brands increased 3.2% compared to the same period in the prior year and represents the sixth consecutive quarter of organic revenue increases for the Company's five legacy core OTC brands.
Net revenues for the OTC Healthcare segment in the nine month period of fiscal 2012 were $235.3 million, or 44.3% higher than the prior year's comparable period of $163.0 million. The increase in revenues is primarily due to revenues from the acquired Blacksmith brands and Dramamine®, and also to higher revenues from our five legacy core OTC brands, which benefited from increased advertising and promotional expenditures.
Household Cleaning
Net revenues for the Household Cleaning segment were $21.3 million for the third quarter of fiscal 2012, 7.8% lower than the prior year's comparable quarter of $23.1 million. Net revenues for the Household Cleaning segment were $71.8 million for the first nine months of fiscal 2012, 6.9% lower than the prior year's comparable nine month period of $77.1 million. This segment continues to be impacted by a difficult retail environment for household cleaning products. For both the third fiscal quarter and the nine month periods, lower sales of Comet® cleanser were partially offset by increased demand for Spic and Span®.
Free Cash Flow and Debt
Free Cash Flow is a "non-GAAP financial measure" and is presented here because management believes it is a commonly used measure of liquidity, indicative of cash available for debt repayment and acquisitions. Non-GAAP Free Cash Flow is defined and reconciled to GAAP Net Cash Provided by Operating Activities in the section entitled, “About Non-GAAP Financial Measures” below. The Company's Free Cash Flow for the third fiscal quarter ended December 31, 2011 was $14.5 million, a decrease of $4.2 million over the prior year's comparable quarter Free Cash Flow of $18.7 million. The Company's Free Cash Flow for the nine month period of fiscal 2012 was $47.6 million, a decrease of $13.6 million over the prior year comparable nine month period's Free Cash Flow of $61.2 million. The decrease in Free Cash Flow is primarily due to higher working capital usage, largely offset by the increased company performance primarily resulting from the acquisitions of Blacksmith Brands and Dramamine® as well as the growth of the legacy core OTC brands.
Total indebtedness at December 31, 2011 was $434.0 million, reflecting debt repayments of $58.0 million in the nine month period of the current fiscal year. At December 31, 2011, we had $40.0 million available for borrowing under our revolving credit facility and $4.4 million of cash on hand.
Conference Call and Accompanying Slide Presentation
The Company will host a conference call to review its third quarter results on February 9, 2012 at 8:30 am EST. The toll-free dial-in numbers are 866-700-7477 within North America and 617-213-8840 outside of North America. The conference pass code is "prestige". The Company will provide a live internet webcast, a slide presentation to accompany the call, as well as an archived replay, all of which can be accessed from the Company's Investor Relations page of http://prestigebrands.com. The slide presentation can be accessed just before the call from the Investor Relations page of the website by clicking on Webcasts and Presentations. Telephonic replays will be available for two weeks following the completion of the call and can be accessed at 888-286-8010 within North America and at 617-801-6888 from outside North America. The pass code is 71452751.
About Prestige Brands Holdings, Inc.
The Company markets and distributes brand name over-the-counter and household cleaning products throughout the U.S., Canada, and certain international markets. Core brands now include Chloraseptic® sore throat treatments, Clear Eyes® eye care products, Compound W® wart treatments, The Doctor's® NightGuard® dental protector, the Little Remedies® and PediaCare® lines of pediatric over-the-counter products, Efferdent® denture care products, Luden's® throat drops, Dramamine® motion sickness treatment, BC® and Goody's® analgesics, Gaviscon® antacid and Beano® gas treatment.
Note Regarding Forward-Looking Statements
This news release contains "forward-looking statements" within the meaning of the federal securities laws that are intended to qualify for the Safe Harbor from liability established by the Private Securities Litigation Reform Act of 1995. "Forward-looking statements" generally can be identified by the use of forward-looking terminology such as "assumptions," "target," "guidance," "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. Forward-looking statements in this news release include, without limitation, statements regarding the impact of the acquired GSK brands on our operating results and financial condition, our ability to integrate and develop the brands that we acquired during fiscal year 2011 and 2012, A&P spending, and our outlook and plans for the markets in which we compete, including the severity of the cough/cold season. These statements are based on management's estimates and assumptions with respect to future events and financial performance and are believed to be reasonable, although they are inherently uncertain and difficult to predict. Actual results could differ materially from those expected as a result of a variety of 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 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) | 2011 | 2010 | 2011 | 2010 | ||||||||||||
Revenues | ||||||||||||||||
Net sales | $ | 105,799 | $ | 90,077 | $ | 304,678 | $ | 238,086 | ||||||||
Other revenues | 451 | 531 | 2,411 | 2,061 | ||||||||||||
Total revenues | 106,250 | 90,608 | 307,089 | 240,147 | ||||||||||||
Cost of Sales | ||||||||||||||||
Cost of sales (exclusive of depreciation shown below) | 51,128 | 46,596 | 148,193 | 115,574 | ||||||||||||
Gross profit | 55,122 | 44,012 | 158,896 | 124,573 | ||||||||||||
Operating Expenses | ||||||||||||||||
Advertising and promotion | 15,274 | 13,049 | 38,580 | 28,775 | ||||||||||||
General and administrative | 13,655 | 15,426 | 32,366 | 30,941 | ||||||||||||
Depreciation and amortization | 2,563 | 2,513 | 7,683 | 7,336 | ||||||||||||
Total operating expenses | 31,492 | 30,988 | 78,629 | 67,052 | ||||||||||||
Operating income | 23,630 | 13,024 | 80,267 | 57,521 | ||||||||||||
Other (income) expense | ||||||||||||||||
Interest income | (1 | ) | — | (4 | ) | — | ||||||||||
Interest expense | 8,117 | 7,674 | 24,977 | 18,508 | ||||||||||||
Gain on settlement | — | — | (5,063 | ) | — | |||||||||||
Loss on extinguishment of debt | — | — | — | 300 | ||||||||||||
Total other expense | 8,116 | 7,674 | 19,910 | 18,808 | ||||||||||||
Income from continuing operations before income taxes | 15,514 | 5,350 | 60,357 | 38,713 | ||||||||||||
Provision for income taxes | 6,004 | 3,204 | 23,130 | 15,948 | ||||||||||||
Income from continuing operations | 9,510 | 2,146 | 37,227 | 22,765 | ||||||||||||
Discontinued Operations | ||||||||||||||||
Income from discontinued operations, net of income tax | — | 32 | — | 591 | ||||||||||||
Loss on sale of discontinued operations, net of income tax | — | — | — | (550 | ) | |||||||||||
Net income | $ | 9,510 | $ | 2,178 | $ | 37,227 | $ | 22,806 | ||||||||
Basic earnings per share: | ||||||||||||||||
Income from continuing operations | $ | 0.19 | $ | 0.04 | $ | 0.74 | $ | 0.46 | ||||||||
Income from discontinued operations and loss on sale of discontinued operations | — | — | — | — | ||||||||||||
Net income | $ | 0.19 | $ | 0.04 | $ | 0.74 | $ | 0.46 | ||||||||
Diluted earnings per share: | ||||||||||||||||
Income from continuing operations | $ | 0.19 | $ | 0.04 | $ | 0.73 | $ | 0.45 | ||||||||
Income from discontinued operations and loss on sale of discontinued operations | — | — | — | — | ||||||||||||
Net income | $ | 0.19 | $ | 0.04 | $ | 0.73 | $ | 0.45 | ||||||||
Weighted average shares outstanding: | ||||||||||||||||
Basic | 50,307 | 50,085 | 50,256 | 50,059 | ||||||||||||
Diluted | 50,684 | 50,533 | 50,667 | 50,260 | ||||||||||||
Prestige Brands Holdings, Inc.
Consolidated Balance Sheets
(Unaudited)
(In thousands) Assets | December 31, 2011 | March 31, 2011 | |||||
Current assets | |||||||
Cash and cash equivalents | $ | 4,439 | $ | 13,334 | |||
Accounts receivable, net | 50,163 | 44,393 | |||||
Inventories | 43,579 | 39,751 | |||||
Deferred income tax assets | 5,540 | 5,292 | |||||
Prepaid expenses and other current assets | 2,162 | 4,812 | |||||
Total current assets | 105,883 | 107,582 | |||||
Property and equipment, net | 1,238 | 1,444 | |||||
Goodwill | 153,696 | 154,896 | |||||
Intangible assets, net | 779,242 | 786,361 | |||||
Other long-term assets | 5,788 | 6,635 | |||||
Total Assets | $ | 1,045,847 | $ | 1,056,918 | |||
Liabilities and Stockholders' Equity | |||||||
Current liabilities | |||||||
Accounts payable | $ | 23,977 | $ | 21,615 | |||
Accrued interest payable | 5,181 | 10,313 | |||||
Other accrued liabilities | 23,905 | 22,280 | |||||
Total current liabilities | 53,063 | 54,208 | |||||
Long-term debt | |||||||
Principal amount | 434,000 | 492,000 | |||||
Less unamortized discount | (4,368 | ) | (5,055 | ) | |||
Long-term debt, net of unamortized discount | 429,632 | 486,945 | |||||
Deferred income tax liabilities | 161,502 | 153,933 | |||||
Total Liabilities | 644,197 | 695,086 | |||||
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 - 50,433 shares at December 31, 2011 and 50,276 shares at March 31, 2011 | 504 | 503 | |||||
Additional paid-in capital | 390,863 | 387,932 | |||||
Treasury stock, at cost - 181 shares at December 31, 2011 and 160 shares at March 31, 2011 | (687 | ) | (416 | ) | |||
Accumulated other comprehensive loss, net of tax | (70 | ) | — | ||||
Retained earnings (accumulated deficit) | 11,040 | (26,187 | ) | ||||
Total Stockholders' Equity | 401,650 | 361,832 | |||||
Total Liabilities and Stockholders' Equity | $ | 1,045,847 | $ | 1,056,918 | |||
Prestige Brands Holdings, Inc.
Consolidated Statements of Cash Flows
(Unaudited)
Nine Months Ended December 31, | |||||||
(In thousands) | 2011 | 2010 | |||||
Operating Activities | |||||||
Net income | $ | 37,227 | $ | 22,806 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Depreciation and amortization | 7,683 | 7,565 | |||||
Loss on sale of discontinued operations | — | 890 | |||||
Deferred income taxes | 7,321 | 5,591 | |||||
Amortization of deferred financing costs | 847 | 767 | |||||
Stock-based compensation costs | 2,360 | 2,751 | |||||
Loss on extinguishment of debt | — | 300 | |||||
Amortization of debt discount | 687 | 480 | |||||
Loss on disposal of equipment | — | 131 | |||||
Changes in operating assets and liabilities | |||||||
Accounts receivable | (5,816 | ) | 7,330 | ||||
Inventories | (3,850 | ) | 2,814 | ||||
Inventories held for sale | — | 1,114 | |||||
Prepaid expenses and other current assets | 2,650 | 3,166 | |||||
Accounts payable | 2,392 | (1,054 | ) | ||||
Accrued liabilities | (3,508 | ) | 7,008 | ||||
Net cash provided by operating activities | 47,993 | 61,659 | |||||
Investing Activities | |||||||
Purchases of equipment | (358 | ) | (405 | ) | |||
Proceeds from sale of discontinued operations | — | 4,122 | |||||
Acquisition of Blacksmith, net of cash acquired | — | (202,044 | ) | ||||
Proceeds from escrow of Blacksmith acquisition | 1,200 | — | |||||
Net cash provided by (used in) investing activities | 842 | (198,327 | ) | ||||
Financing Activities | |||||||
Proceeds from issuance of Senior Notes | — | 100,250 | |||||
Proceeds from issuance of Senior Term Loan | — | 112,936 | |||||
Payment of deferred financing costs | — | (648 | ) | ||||
Repayment of long-term debt | (58,000 | ) | (33,587 | ) | |||
Proceeds from exercise of stock options | 572 | 150 | |||||
Shares surrendered as payment of tax withholding | (271 | ) | (264 | ) | |||
Net cash (used in) provided by financing activities | (57,699 | ) | 178,837 | ||||
Effects of exchange rate changes on cash and cash equivalents | (31 | ) | — | ||||
(Decrease) increase in cash and cash equivalents | (8,895 | ) | 42,169 | ||||
Cash and cash equivalents - beginning of period | 13,334 | 41,097 | |||||
Cash and cash equivalents - end of period | $ | 4,439 | $ | 83,266 | |||
Interest paid | $ | 28,503 | $ | 13,354 | |||
Income taxes paid | $ | 12,699 | $ | 4,096 | |||
Prestige Brands Holdings, Inc.
Consolidated Statements of Operations
Business Segments
(Unaudited)
Three Months Ended December 31, 2011 | |||||||||||
OTC Healthcare | Household Cleaning | Consolidated | |||||||||
(In thousands) | |||||||||||
Net sales | $ | 84,711 | $ | 21,088 | $ | 105,799 | |||||
Other revenues | 195 | 256 | 451 | ||||||||
Total revenues | 84,906 | 21,344 | 106,250 | ||||||||
Cost of sales | 35,329 | 15,799 | 51,128 | ||||||||
Gross profit | 49,577 | 5,545 | 55,122 | ||||||||
Advertising and promotion | 14,170 | 1,104 | 15,274 | ||||||||
Contribution margin | $ | 35,407 | $ | 4,441 | 39,848 | ||||||
Other operating expenses | 16,218 | ||||||||||
Operating income | 23,630 | ||||||||||
Other expense | 8,116 | ||||||||||
Provision for income taxes | 6,004 | ||||||||||
Income from continuing operations | 9,510 | ||||||||||
Income from discontinued operations, net of income tax | — | ||||||||||
Loss on sale of discontinued operations, net of income tax | — | ||||||||||
Net income | $ | 9,510 | |||||||||
Three Months Ended December 31, 2010 | |||||||||||
OTC Healthcare | Household Cleaning | Consolidated | |||||||||
(In thousands) | |||||||||||
Net sales | $ | 67,287 | $ | 22,790 | $ | 90,077 | |||||
Other revenues | 173 | 358 | 531 | ||||||||
Total revenues | 67,460 | 23,148 | 90,608 | ||||||||
Cost of sales | 30,827 | 15,769 | 46,596 | ||||||||
Gross profit | 36,633 | 7,379 | 44,012 | ||||||||
Advertising and promotion | 11,842 | 1,207 | 13,049 | ||||||||
Contribution margin | $ | 24,791 | $ | 6,172 | 30,963 | ||||||
Other operating expenses | 17,939 | ||||||||||
Operating income | 13,024 | ||||||||||
Other expense | 7,674 | ||||||||||
Provision for income taxes | 3,204 | ||||||||||
Income from continuing operations | 2,146 | ||||||||||
Income from discontinued operations, net of income tax | 32 | ||||||||||
Loss on sale of discontinued operations, net of income tax | — | ||||||||||
Net income | $ | 2,178 | |||||||||
Nine Months Ended December 31, 2011 | |||||||||||
OTC Healthcare | Household Cleaning | Consolidated | |||||||||
(In thousands) | |||||||||||
Net sales | $ | 234,712 | $ | 69,966 | $ | 304,678 | |||||
Other revenues | 552 | 1,859 | 2,411 | ||||||||
Total revenues | 235,264 | 71,825 | 307,089 | ||||||||
Cost of sales | 97,198 | 50,995 | 148,193 | ||||||||
Gross profit | 138,066 | 20,830 | 158,896 | ||||||||
Advertising and promotion | 34,746 | 3,834 | 38,580 | ||||||||
Contribution margin | $ | 103,320 | $ | 16,996 | 120,316 | ||||||
Other operating expenses | 40,049 | ||||||||||
Operating income | 80,267 | ||||||||||
Other expense | 19,910 | ||||||||||
Provision for income taxes | 23,130 | ||||||||||
Income from continuing operations | 37,227 | ||||||||||
Income from discontinued operations, net of income tax | — | ||||||||||
Loss on sale of discontinued operations, net of income tax | — | ||||||||||
Net income | $ | 37,227 | |||||||||
Nine Months Ended December 31, 2010 | |||||||||||
OTC Healthcare | Household Cleaning | Consolidated | |||||||||
(In thousands) | |||||||||||
Net sales | $ | 162,652 | $ | 75,434 | $ | 238,086 | |||||
Other revenues | 368 | 1,693 | 2,061 | ||||||||
Total revenues | 163,020 | 77,127 | 240,147 | ||||||||
Cost of sales | 64,477 | 51,097 | 115,574 | ||||||||
Gross profit | 98,543 | 26,030 | 124,573 | ||||||||
Advertising and promotion | 23,918 | 4,857 | 28,775 | ||||||||
Contribution margin | $ | 74,625 | $ | 21,173 | 95,798 | ||||||
Other operating expenses | 38,277 | ||||||||||
Operating income | 57,521 | ||||||||||
Other expense | 18,808 | ||||||||||
Provision for income taxes | 15,948 | ||||||||||
Income from continuing operations | 22,765 | ||||||||||
Income from discontinued operations, net of income tax | 591 | ||||||||||
Loss on sale of discontinued operations, net of income tax | (550 | ) | |||||||||
Net income | $ | 22,806 | |||||||||
About Non-GAAP Financial Measures
We define Non-GAAP EBITDA as earnings before interest expense (income), income taxes, depreciation and amortization, income or loss from discontinued operations or the sale thereof and Non-GAAP Adjusted EBITDA as earnings before interest expense (income), income taxes, depreciation and amortization, income or loss from discontinued operations and the sale thereof, gain on settlement, certain other legal and professional fees and acquisition-related costs. We define Non-GAAP Adjusted Income from Continuing Operations as Income from Continuing Operations before incremental interest expense to finance future acquisitions, gain on settlement, certain other legal and professional fees, acquisition-related costs, the applicable tax impacts associated with these items and the tax impacts of state tax rate adjustments and other non-deductible items. We define Non-GAAP Adjusted Net Income as Net Income before gain on settlement, certain other legal and professional fees, acquisition-related costs, income or loss from discontinued operations and the sale thereof, loss on extinguishment of debt, the applicable tax impacts associated with these items and the tax impacts of state tax rate adjustments and other non-deductible items. We define Non-GAAP Free Cash Flow as net cash provided by operating activities less cash paid for capital expenditures. Non-GAAP EBITDA, Non-GAAP Adjusted EBITDA, Non-GAAP Adjusted Net Income and Non-GAAP Free Cash Flow may not be comparable to similarly titled measures reported by other companies.
We are presenting Non-GAAP EBITDA, Non-GAAP Adjusted EBITDA, Non-GAAP Adjusted Income from Continuing Operations, Non-GAAP Adjusted Net Income and Non-GAAP Free Cash Flow because they provide a additional ways to view our operations, when considered with both our GAAP results and the reconciliation to net income and net cash provided by operating activities, respectively, which we believe provide a more complete understanding of our business than could be obtained absent this disclosure. Each of Non-GAAP EBITDA, Non-GAAP Adjusted EBITDA, Non-GAAP Adjusted Income from Continuing Operations, Non-GAAP Adjusted Net Income and Non-GAAP Free Cash Flow is presented solely as a supplemental disclosure because: (i) we believe it is a useful tool for investors to assess the operating performance of the business without the effect of these items; (ii) we believe that investors will find this data useful in assessing our ability to pursue acquisitions or service or incur indebtedness; and (iii) we use Non-GAAP EBITDA/Non-GAAP Adjusted EBITDA and Non-GAAP Adjusted Net Income internally to evaluate the performance of our personnel and also as a benchmark to evaluate our operating performance or compare our performance to that of our competitors. The use of Non-GAAP EBITDA, Non-GAAP Adjusted EBITDA, Non-GAAP Adjusted Income from Continuing Operations, Non-GAAP Adjusted Net Income and Non-GAAP Free Cash Flow has limitations and you should not consider these measures in isolation from or as an alternative to GAAP measures such as operating income, income from continuing operations, net income, and net cash flow provided by operating activities, or cash flow statement data prepared in accordance with GAAP, or as a measure of profitability or liquidity.
The following tables set forth the reconciliation of Non-GAAP EBITDA, Non-GAAP Adjusted EBITDA, Non-GAAP Adjusted Income from Continuing Operations, Non-GAAP Adjusted Net Income and Non-GAAP Free Cash Flow, all of which are non-GAAP financial measures, to GAAP net income and GAAP net cash provided by operating activities, respectively, our most directly comparable financial measures presented in accordance with GAAP.
Reconciliation of GAAP Net Income to Non-GAAP Adjusted EBITDA:
Three Months Ended December 31, | |||||||||
2011 | 2010 | ||||||||
(In thousands) | |||||||||
GAAP Net Income | $ | 9,510 | $ | 2,178 | |||||
Income from discontinued operations | — | (32 | ) | ||||||
Interest Expense, net | 8,116 | 7,674 | |||||||
Income tax provision | 6,004 | 3,204 | |||||||
Depreciation and amortization | 2,563 | 2,513 | |||||||
Non-GAAP EBITDA: | 26,193 | 15,537 | |||||||
Adjustments: | |||||||||
Inventory step-up charges associated with acquisitions | — | 3,544 | |||||||
Legal and professional fees associated with acquisitions | 4,890 | 6,927 | |||||||
Total adjustments | 4,890 | 10,471 | |||||||
Non-GAAP Adjusted EBITDA | $ | 31,083 | $ | 26,008 | |||||
Nine Months Ended December 31, | |||||||||
2011 | 2010 | ||||||||
(In thousands) | |||||||||
GAAP Net Income | $ | 37,227 | $ | 22,806 | |||||
Income from discontinued operations | — | (591 | ) | ||||||
Loss on sale of discontinued operations | — | 550 | |||||||
Interest Expense, net | 24,973 | 18,508 | |||||||
Income tax provision | 23,130 | 15,948 | |||||||
Depreciation and amortization | 7,683 | 7,336 | |||||||
Non-GAAP EBITDA: | 93,013 | 64,557 | |||||||
Adjustments: | |||||||||
Gain on settlement | (5,063 | ) | — | ||||||
Inventory step-up charges associated with acquisitions | — | 3,544 | |||||||
Legal and professional fees associated with acquisitions | 5,665 | 6,927 | |||||||
Loss on extinguishment of debt | — | 300 | |||||||
Total adjustments | 602 | 10,771 | |||||||
Non-GAAP Adjusted EBITDA | $ | 93,615 | $ | 75,328 | |||||
Reconciliation of GAAP Income from Continuing Operations to Non-GAAP Adjusted Income from Continuing Operations:
Three Months Ended December 31, | |||||||||
2011 | 2010 | ||||||||
(In thousands) | |||||||||
GAAP Income from Continuing Operations | $ | 9,510 | $ | 2,146 | |||||
Adjustments: | |||||||||
Incremental interest expense to finance Dramamine | — | 800 | |||||||
Inventory step-up charges associated with acquisitions | — | 3,544 | |||||||
Acquisition related costs | 4,890 | 6,927 | |||||||
Tax impact of adjustments | (1,892 | ) | (3,119 | ) | |||||
Total adjustments | 2,998 | 8,152 | |||||||
Non-GAAP Adjusted Income from Continuing Operations | $ | 12,508 | $ | 10,298 | |||||
Nine Months Ended December 31, | |||||||||
2011 | 2010 | ||||||||
(In thousands) | |||||||||
GAAP Income from Continuing Operations | $ | 37,227 | $ | 22,765 | |||||
Adjustments: | |||||||||
Incremental interest expense to finance Dramamine | — | 800 | |||||||
Inventory step-up charges associated with acquisitions | — | 3,544 | |||||||
Gain on settlement | (5,063 | ) | — | ||||||
Acquisition related costs | 5,665 | 6,927 | |||||||
Tax impact of adjustments | (275 | ) | (3,119 | ) | |||||
Tax impact of state rate adjustments and other non-deductible items | (237 | ) | — | ||||||
Total adjustments | 90 | 8,152 | |||||||
Non-GAAP Adjusted Income from Continuing Operations | $ | 37,317 | $ | 30,917 | |||||
Reconciliation of GAAP Net Income to Non-GAAP Adjusted Net Income and related Diluted Earnings Per Share:
Three Months Ended December 31, | |||||||||||||
2011 | 2011 Diluted EPS | 2010 | 2010 Diluted EPS | ||||||||||
(In thousands) | |||||||||||||
GAAP Net Income | $ | 9,510 | $ | 0.19 | $ | 2,178 | $ | 0.04 | |||||
Adjustments: | |||||||||||||
Income from discontinued operations | — | — | (32 | ) | — | ||||||||
Incremental interest expense to finance Dramamine | — | — | 800 | 0.02 | |||||||||
Inventory step-up charge associated with acquisitions | — | — | 3,544 | 0.07 | |||||||||
Legal and professional fees associated with acquisitions | 4,890 | 0.10 | 6,927 | 0.14 | |||||||||
Tax impact of adjustments | (1,892 | ) | (0.04 | ) | (3,119 | ) | (0.06 | ) | |||||
Total adjustments | 2,998 | 0.06 | 8,120 | 0.17 | |||||||||
Non-GAAP Adjusted Net Income and Adjusted EPS | $ | 12,508 | $ | 0.25 | $ | 10,298 | $ | 0.21 | |||||
Nine Months Ended December 31, | |||||||||||||
2011 | 2011 Diluted EPS | 2010 | 2010 Diluted EPS | ||||||||||
(In thousands) | |||||||||||||
GAAP Net Income | $ | 37,227 | $ | 0.73 | $ | 22,806 | $ | 0.45 | |||||
Adjustments: | |||||||||||||
Income from discontinued operations | — | — | (591 | ) | (0.01 | ) | |||||||
Loss on sale of discontinued operations | — | — | 550 | 0.01 | |||||||||
Gain on settlement | (5,063 | ) | (0.10 | ) | — | — | |||||||
Incremental interest expense to finance Dramamine | — | — | 800 | 0.02 | |||||||||
Inventory step-up charge associated with acquisitions | — | — | 3,544 | 0.07 | |||||||||
Legal and professional fees associated with acquisitions | 5,665 | 0.11 | 6,927 | 0.14 | |||||||||
Tax impact of adjustments | (275 | ) | — | (3,119 | ) | (0.06 | ) | ||||||
Tax impact of state rate adjustments and other non-deductible items | (237 | ) | — | — | — | ||||||||
Total adjustments | 90 | 0.01 | 8,111 | 0.17 | |||||||||
Non-GAAP Adjusted Net Income and Adjusted EPS | $ | 37,317 | $ | 0.74 | $ | 30,917 | $ | 0.62 | |||||
Reconciliation of GAAP Net Cash Provided by Operating Activities to Non-GAAP Free Cash Flow:
Three Months Ended December 31, | |||||||||
2011 | 2010 | ||||||||
(In thousands) | |||||||||
GAAP Net cash provided by operating activities | $ | 14,527 | $ | 18,842 | |||||
Additions to property and equipment for cash | (51 | ) | (151 | ) | |||||
Non-GAAP Free Cash Flow | $ | 14,476 | $ | 18,691 | |||||
Nine Months Ended December 31, | |||||||||
2011 | 2010 | ||||||||
(In thousands) | |||||||||
GAAP Net cash provided by operating activities | $ | 47,993 | $ | 61,659 | |||||
Additions to property and equipment for cash | (358 | ) | (405 | ) | |||||
Non-GAAP Free Cash Flow | $ | 47,635 | $ | 61,254 | |||||
February 9, 2012 Review of Third Quarter F’12 Results Matthew M. Mannelly, CEO Ronald M. Lombardi, CFO Exhibit 99.2
2 Safe Harbor Disclosure This presentation contains certain “forward-looking” statements within the meaning of the Private Securities Litigation Reform Act of 1995, such as statements about the Company’s acquisition strategy, ability to integrate acquisitions, the impact of acquisitions on the company’s operating results and financial condition, the company’s ability to repay debt, growth strategies, investments in advertising and promotion, market position, product introductions and innovations, and future financial performance. Words such as "continue," "will," "believe," “intend,” “expect,” “anticipate,” “plan,” “potential,” “estimate,” “may,” “should,” “could,” “would,” and similar expressions identify forward-looking statements. Such forward-looking statements represent the Company’s expectations and beliefs and involve a number of known and unknown risks, uncertainties and other factors that may cause actual results to differ materially from those expressed or implied by such forward-looking statements. These factors include, among others, the failure to successfully commercialize new and enhanced products or integrate new product acquisitions, the effectiveness of the Company’s advertising and promotions investments, continuing decline in the household cleaning products market, the severity of the cold/cough season, the effectiveness of the Company’s marketing and distribution infrastructure, and other risks set forth in Part I, Item 1A. Risk Factors in the Company’s Annual Report on Form 10-K for the year ended March 31, 2011. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this presentation. Except to the extent required by applicable securities laws, the Company undertakes no obligation to update any forward-looking statement contained herein, whether as a result of new information, future events, or otherwise.
3 Solid financial performance for Q3 – Q3 revenue of $106.3 million, up 17.3%, or $15.7 million over the prior year comparable quarter – Revenue growth of over 3% for Core OTC brands in the aggregate, the sixth consecutive quarter of growth – EPS, excluding adjustments(1) , was $0.25 compared to the prior year’s $0.21, up 19% – FCF of $14.5 million(2) – Debt reduced by $18.0 million Core OTC strategy continues to deliver – Core OTC brands continue to outgrow categories in consumption and gain market share – Strong performance despite challenging cough/cold season Subsequent to the close of Q3 – The largest acquisition in PBH history – 15 brands from GSK, closed on January 31, 2012 – Completed financing of additional bond & bank debt of $250 and $660 million ,respectively, to fund the acquisition of the GSK brands and expenses – Moody’s and S&P ratings remain unchanged 3 (1) These adjustments are non – GAAP and are included in the reconciliation in our earnings release in the “About Non-GAAP Financial Measures” section. (2) Free Cash Flow is a non-GAAP financial measure and is reconciled to GAAP Net Cash provided by operating activities in our earnings release in the “About Non-GAAP Financial Measures” section. Third Quarter Highlights
4 Delivering Consistent Organic Core OTC Growth In a Challenging Environment Applicable quarter Dollar values in millions $38.6 $35.4 $33.1 $33.4 $39.0 $40.5 $39.0 $40.5 $35.9 $37.0 $40.6 $41.8 1.1% 14.1% 8.4% 10.7% 4.1% 3.2% -- 5.0% 10.0% 15.0% 20.0% 25.0% -- $10 $20 $30 $40 $50 Q2 '11 Q3 '11 Q4 '11 Q1 '12 Q2 '12 Q3 '12 YoY % Growth Net Sales Six Straight Quarters of Organic Core OTC Growth Excluding Acquisitions Prior year comparable quarter
5 Driving Consumption That Has Consistently Exceeded The Categories, Leading to Solid Company Sales Growth (Dollars in Millions) Consumption Growth Net Sales / % Growth +17.3% +3.2% Dollar values in millions Notes: Consumption is based on IRI (FDM) for 12 week period ending December 25, 2011.
6 (0.8%) (0.8%) 0.5% 2.3% 0.3% 10.8% 14.6% 1.8% 0.3% 7.2% Category Brand PBH Cough/Cold Brands: Strong Performance +7.2%(1) Despite Soft Start To Cough/Cold Season (-6.5%)(2) (1) Based on IRI Consumption Data (FDM) for the 12 week period ending December 25, 2011. (2) Source: FAN National 2011-2012 Weekly % Change vs. Same Week Last Year: Total, Adult & Pediatric. Total C/C Brands
7 Little Remedies: Portrait of a Brand On The Move Tag Line: “Everything Kids Need And Nothing They Don’t” Target Audience: Parents and caregivers who prefer products with no artificial ingredients Consumption: Up almost 15% for Q3 and 39% fiscal YTD(1) Media & Marketing Tools Used: (1) Based on IRI Consumption Data (FDM) for the 12 week period ending December 25, 2011. Consumer Print Advertising Professional Advertising Digital Marketing Point Of Purchase Displays
8 Luden’s: Over 100 Years Old And Still Young Tag Line: “Surprisingly soothing. Simply delicious.” Target Audience: Sufferers of minor throat irritation, all ages Consumption: Up slightly for the period and almost 7% YTD(1) Media & Marketing Tools Used: (1) Based on IRI Consumption Data (FDM) for the 12 week period ending December 25, 2011. Mobile App. Game Sampling Print Ads
9 Household Stabilizing Effort Includes New Product Introductions in Q4 Today’s homes and consumers need specialty cleaners Available in Cream, Powder and Spray for multi-surface cleaning Increases Comet shelf position and importance to retailers Introducing New Comet Stainless Steel Cleaners!
10 OTC Portfolio Sales have grown from $200M to $500M and increased from 57% to 85% of total Sales in the last two years: by mid 2012, we will have 13 Core OTC Brands and two new scale OTC platforms. The Transformed Prestige: – We are stronger, more diverse in our OTC businesses – More innovative in new product development – More creative in our marketing and advertising investments – And more in touch with our consumers and retail customers than ever before Our Balance Sheet is strong; our Free Cash Flow(1) is robust. Our disciplined strategy to create long-term shareholder value is working: drive core OTC organic growth, focus on OTC M&A activity, and strategically manage our portfolio. Timely and seamless integration of GSK brands is bolstered by our past experience in transitioning acquisitions into our organization We are pleased with Q3 results, and remain cautiously optimistic for Q4 given the current economic climate and the soft cough / cold season to date. The GSK acquisition is expected to add ~$30M in Revenues and be EPS neutral in Q4, excluding adjustments(2) – Q4 and Q1 transition period for Sales and A&P execution move to PBH. The Transformed Prestige Began February 1, 2012 (1) Refer to note 2 on page 3 related to non-GAAP Free Cash Flow. (2) Refer to note 1 on page 3 related to non-GAAP adjustments.
11 Financial Overview Ronald M. Lombardi, CFO
12 Consistent Financial Performance Q3 FY 2011 Q3 FY 2012 A&P investment behind core OTC brands driving share and revenue gains. Beginning to “comp” Blacksmith acquisition. Revenue gains driving Net Income and EPS growth. Consistent cash flow from operations, with prior year favorably impacted by the Blacksmith acquisition. Dollar values in millions, except per share data (1) These non-GAAP financial measures are reconciled to their most closely related GAAP financial measures in our earnings release in the “About Non-GAAP Financial Measures” section. Adjusted EPS is also reconciled to reported EPS on Slide 15. $90.6 $26.0 $0.21 $18.8 $106.3 $31.1 $0.25 $14.5 +17.3% +19.5% +19.0% (22.9%) Net Revenue Adjusted EBITDA Adjusted EPS Cash Flow From Operations (1) (1)
13 Consolidated Financial Summary Net Revenue grew by $15.6 million, or 17.3%, over year ago. – 3.2% growth in legacy core OTC. – Acquisitions added $16.6 million. – Excluding acquisitions, revenues ($1.0 million) as overall OTC gains were offset by a soft start to cough / cold season and lower HH revenue. Gross margin was consistent with the previous four quarters and, as expected, below prior year due to the Blacksmith acquisition and HH. A&P investment continues to drive growth. G&A is consistent with prior year. Adjusted Net Income(1) and Adjusted EPS(1) tracking revenue gains. Dollar values in millions, except per share data (1) These non-GAAP financial measures are reconciled to their most closely related GAAP financial measures in our earnings release in the “About Non-GAAP Financial Measures” section. Adjusted Net Income and Adjusted EPS are also reconciled to their reported GAAP amounts on Slide 15. 3 Months Ended % Q3 '12 Q3 '11 Change Net Revenue $106.3 $90.6 17.3% Gross Profit 55.1 47.6 15.9% % Margin 51.9% 52.5% A&P 15.3 13.0 17.1% % of Net Revenue 14.4% 14.4% G&A 8.8 8.5 3.1% % of Net Revenue 8.2% 9.4% Adjusted EBITDA 31.1 26.0 19.5% % Margin 29.3% 28.7% Adjusted Net Income $12.5 $10.3 21.5% Adjusted EPS $0.25 $0.21 19.0% EPS - As Reported $0.19 $0.04 375.0% (1) (1) (1)
14 Consolidated Financial Summary Net Revenue grew by $67 million, or 27.9%, over year ago. – 5.7% growth in legacy core OTC. – Acquisitions added $68.7 million. As expected, gross margin was 1.6 ppt lower than last year largely due to the impact of the acquired Blacksmith Brands and HH. A&P investment continues to drive growth. G&A increased $2.7 million due to the impact of acquisitions and headcount additions to support growth. Adjusted Net Income(1). increased by 20.4% after certain adjustments(2). Dollar values in millions, except per share data (1) These non-GAAP financial measures are reconciled to their most closely related GAAP financial measures in our earnings release in the “About Non-GAAP Financial Measures” section. Adjusted Net Income and Adjusted EPS are also reconciled to their reported GAAP amounts on Slide 15. (2) Refer to note 1 on page 3 related to non-GAAP adjustments. 9 Months Ended % Q3 '12 Q3 '11 Change Net Revenue $307.1 $240.1 27.9% Gross Profit 158.9 128.1 24.0% % Margin 51.7% 53.3% A&P 38.6 28.8 34.1% % of Net Revenue 12.6% 12.0% G&A 26.7 24.0 11.2% % of Net Revenue 8.7% 10.0% Adjusted EBITDA 93.6 75.3 24.3% % Margin 30.5% 31.4% Adjusted Net I come $37.3 $30.9 20.4% Adjusted EPS $0.74 $0.62 19.4% EPS - As Reported $0.73 $0.45 62.2% (1) (1) (1)
15 Net Income and EPS Reconciliation Dollar values in millions, except per share data (1) These non-GAAP financial measures are being reconciled to their most closely related GAAP financial measures. For further information about non-GAAP financial measures, refer to our earnings release in the “About Non-GAAP Financial Measures” section. (2) Refer to note 1 on page 3 related to non-GAAP adjustments. 3 Months Ended 9 Months Ended Q3 FY 2012 Q3 FY 2012 Net Net Income EPS Income EPS Q3 FY 2012 Adjusted $12.5 $0.25 $37.3 $0.74 Adjustments: Lawsuit Settlement net of Professional Fees -- -- 4.3 0.08 Acquisition Related Costs (4.9) (0.10) (4.9) (0.10) Tax Impact of Adjustments 1.9 0.04 0.3 0.01 Tax Rate Adjustment -- -- 0.2 0.00 Total Adjustments (3.0) (0.06) (0.1) (0.01) Q3 FY 2012 As Reported $9.5 $0.19 $37.2 $0.73 (1) (2)
16 Prestige Strength: Cash Flow from Operations Quarterly and Year-to-Date Cash Flow From Operations are impacted by this year’s higher sales volumes and the impact of the Blacksmith acquisition on the prior year’s results. Debt Profile & Covenant Compliance: Total Indebtedness at 12/31/11, $434 million, reflects a Q3 pay down of $18.0 million and $58.0 million for the year to date. The company is compliant with all covenant requirements. 3 Months Ended 9 Months Ended Q3 '12 Q3 '11 Q3 '12 Q3 '11 Net Income $9.5 $2.2 $37.2 $22.8 Depreciation & Amortization 2.6 2.5 7.7 7.6 Other Non-Cash Operating Items 2.5 1.8 11.2 10.9 Working Capital (0.1) 12.3 (8.1) 20.4 Cash Flow from Operations $14.5 $18.8 $48.0 $61.7 Dollar values in millions
17 17 January 31, 2012 PBH Purchases OTC Brands from GSK
18 Strengthens Core OTC by adding new brands and category depth Reduces sensitivity to seasonality of Cough/Cold brands OTC now represents 85% of sales and 90% of contribution 18 Accretive to gross margins and EBITDA margins Increases A&P support with focus on Core brands Highly cash generative and accretive to free cash flow S tra te g ic Fi n a n cia l GSK Transaction Strengthens Prestige’s Strategic and Financial Profile
19 Analgesics 17% Cough & Cold 17% GI 14% Eye & Ear Care 14% Dermatological s 9% Oral Care 8% Sleep Aids 1% Note: The remaining 20% of sales is comprised of Household (including Comet) and other brands. = New Core Brand GSK Transaction Adds Four Core Brands That Strengthen Prestige’s Existing Platforms % of PF Revenue:
20 83% 17% Acquisitions Transform PBH; 90% of Contribution Margin Now From OTC Household OTC Household OTC OTC + + ® ® ® ® ® Personal Care GSK Brands + ® ® ® ® ® ® ® ® ® ® ® ® ® ® ® ® ® ® ® ® ® ® ® Household
21 21 GSK Transaction Creates a Larger, More Diversified and Competitive Business Capacity Drawn at Close Revenues ~$400 ~$600 Key Category Platforms 4 6 Core Brands 9 13 A&P Spending ~12% ~14% Margins ~32% ~35% Cash Flow from Operations ~$75 MM ~$ 110 MM Pre-Transaction Post-Transaction Dollar values in millions
22 BC/Goody’s - Headache Powders & Pain Relievers – Unique 80 year southern heritage with ~ 16% share in Southern market – #1 share of powdered aspirin segment – Rivalry ad campaign driven by heavy radio support in southern markets; Richard Petty and Trace Adkins; NASCAR sponsor – Strong C store presence – The Number 1 OTC products sold in Southern C stores – Opportunities: distribution, new products, promotion Beano - Gas Prevention – 85% share of growing gas prevention segment – Unique oral meltaway tablet – Opportunities: focus on prevention, innovation, distribution, A&P Debrox – Ear Wax Remover – Category leader and #1 most recommended by doctors and pharmacist – Shopper marketing initiatives to drive revenue – Opportunities: continue strong A&P support and drive innovation of new products Gaviscon – Antacid (Canada) – #1 Doctor recommended OTC for acid reflux and fastest growing antacid in category – TV campaign is driving sales performance – Excellent retail presence and distribution in Canada – Opportunities: Pursue new users and “switchers” from other brands; focus on competitive claims Four New Core Brands
23 23 Prestige Strengthens Industry Leading Margins and Free Cash Flow Conversion Mean: 10.9% E B I T D A M a rg in ( 1 ) (C a p it a l Spend ing a s % of S a le s ) Mean: 20.5% Pro Forma Source: Capital IQ (1) Represents nine months ending December 2011 for Prestige; Represents LTM period for all others. (2) Free Cash Flow is a non GAAP financial measure and is defined as Operating Cash Flow less Capital Expenditures. Fr e e C a s h F lo w ( % of S a le s ) ( 1 ) ( 2 ) PBH + GSK 0.2% 0.4% 1.8% 3.4% 4.3% 4.4% 2.5% 4.9% 2.1% 0.8% 1.1% +EBITDA % Gain PBH + GSK
24 24 High Cash Flow Conversion Expected to Lead to Continued Rapid Deleveraging Leverage Ratio Fiscal year ending March 31 Leverage ratio reflects Net Debt / EBITDA Source: CapitalIQ Fiscal Year = Excluding Acquisitions
25 Financing Well Received By Market Fac tor s Strong Market Fundamentals Public Company OTC Focused Strategy Held Ratings B1/B+ Compelling Road Show Significantly Over-Subscribed Pricing Drives Shareholder Value
26 $250 million Senior Unsecured Notes Coupon: 8.125% Tenor: 8 Years Guarantors: Jointly and severally guaranteed on a senior basis Redemption: NC-4, then callable with a premium of 1/2 coupon in year 5, 1/4 coupon in year 6 and par thereafter CIC: Put to issuer at 101% Equity Clawback: Up to 35%, within the first three years Senior Unsecured Notes Senior Secured Credit Facility Asset Based Revolving Facility Financing Overview $660 million Senior Secured Term Loan B Facility (“TLB”) Margin: L (Floor 1.25%) + 400 bps Tenor: 7 Years Covenants: 1. Maximum Consolidated Total Net Leverage Ratio, may net up to $75M cash 2. Minimum Consolidated Net Cash Interest Coverage Ratio Amortization: 1% per annum paid quarterly, with remainder due at maturity $50 million Senior Secured Asset Based Revolving Facility (“ABL”) Margin: L (no floor) + 175 to 225 bps Tenor: 5 Years Security: First priority lien on ABL Collateral, second priority lien on TLB Collateral
27 27 Proven Track Record of Successful Integrations Consistent with Prestige’s business model Seamless transition with customers Timely integration Investing in brands Achieving transaction objectives / synergies November 2010 January 2011 January 2012 North American Brands
28 28 Integration ~5 month pre-acquisition evaluation period Extensive reviews – Financial – Commercial – Operational – Regulatory Unprecedented external diligence Developed Preliminary “100- day plan” – Key objectives – Potential risks – Key integration milestones Planning & Preparation Due Diligence Pre-negotiated closing agreements: – Complete TSA – Engage outsourced sales – Enlist outside commercial and operational support Finalized “100-day plan” by function – Goals – Risks – Deliverables Implement comprehensive “100-day plan” – Control and monitor processes – including outside resources – Conduct strategic reviews, accelerate growth opportunities – Refine long-term strategies / objectives for Core Brands Complete transition and end TSA period Robust Integration Planning & Processes Leverage Deep Experience and Extensive Diligence Effort
29 Integrate and realign sales structure across classes of trade and core customers Canada: opportunity as a result of doubling the business Expand and secure distribution base: C-store & club opportunities Increase marketing support for new core brands – BC/Goody’s, Beano, Gaviscon and Debrox; Agencies already onboard Marketing & Sales Detailed Transition Plan in Process at Close Our track record of seamless integration of acquired brands allows for a smooth and rapid transition of the GSK brands Transfer of licenses, product documentation, and product claim support QA: Day to day oversight by PBH of inventory providers; establish new quality agreements with third party manufacturers Regulatory: update licenses, filings and artwork on all brands Science & Technology 3+ year supply from GSK site eliminates up-front transfers 5 month TSA consolidation plan currently underway Supply Chain Business runs on GSK systems initially during transition period Current system can accommodate GSK acquisition with minor upgrades Data transfer currently underway Integrate financial data day one – Inventory planning and management system – Sales reporting and analysis Finance & IT
30 Acquisition and Integration Costs Actual Estimate Q3 FY 2012 Q4 FY 2012 Adjustments Acquisition Related Deal Costs 4.9$ 11.0$ Integration Costs 2.0 TSA Costs 4.5 Purchase Accounting - Inventory 2.5 Other Costs - Write off of 2010 Finance Costs 5.0 Tax Impact of Adjustments (1.9) (9.7) Total Adjustments 3.0$ $15.3 EPS Impact (0.06)$ (0.30)$ Dollar values in millions, except per share data (1) Refer to note 1 on page 3 related to non-GAAP adjustments. (1)
31 Well Positioned to Create Long Term Shareholder Value Meaningful step towards commitment to long-term OTC strategy Strong consumer franchises in respective categories Adds two attractive new scale OTC platforms in Powdered Analgesics and Gastrointestinal Improves overall gross margin and EBITDA margin profile Clear path for value creation through brand support and new products Well aligned with our operating model Limited incremental overhead providing leverage on existing cost structure Highly cash generative and accretive to free cash flow
32 Clear Roadmap for Value Creation Drive Core OTC Organic Growth Exclusive OTC M&A Focus Strategic Portfolio Management
33 Exhibit 99.2 February 9, 2012