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): May 25, 2016
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.) | ||
660 White Plains Road, Tarrytown, New York 10591
(Address of principal executive offices) (Zip Code)
(914) 524-6800
(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 (see General Instruction A.2 below):
[ ] 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 7.01 Regulation FD Disclosure.
On May 25, 2016, certain representatives of the Company will make a slide presentation, using slides containing the information attached to this Current Report on Form 8-K as Exhibit 99.1 (the “Investor Presentation”) and incorporated herein by reference, to investors, investment analysts and portfolio managers at the Company’s 2016 Investor Day meeting. In addition, beginning May 25, 2016, the Company expects to use the Investor Presentation, in whole or in part, and possibly with modifications, in connection with presentations to potential investors, analysts and others during the fiscal year ending March 31, 2017.
The Investor Presentation includes financial information not prepared in accordance with generally accepted accounting principles (“Non-GAAP Financial Measures”). A reconciliation of the Non-GAAP Financial Measures to financial information prepared in accordance with generally accepted accounting principles (“GAAP”) appears at the end of the Investor Presentation. The Company is providing disclosure of the reconciliation of reported Non-GAAP Financial Measures used in the Investor Presentation, among other places, to its comparable financial measures on a GAAP basis. The Company believes that the Non-GAAP Financial Measures provide investors 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, which we believe provide a more complete understanding of our business than could be obtained absent this disclosure. We believe the Non-GAAP Financial Measures also provide investors a useful tool to assess shareholder value.
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.
The information presented in Item 7.01 of this Current Report on Form 8-K and Exhibit 99.1 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 specifically 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: May 25, 2016 | PRESTIGE BRANDS HOLDINGS, INC. | ||
By: | /s/ David S. Marberger | ||
Name: David S. Marberger | |||
Title: Chief Financial Officer | |||
EXHIBIT INDEX
Exhibit | Description | |
99.1 | Investor Presentation Slideshow in use beginning May 25, 2016 (furnished only). | |
l?r estigeBrands MONISTAT' �FESS) Jiydralyte� Cl�r eyes. CQlJGJ.f & co� (1-;n&-·# .fr-Mi·.-. () LLJDE N'S. U1'1�t 1tf�f.0,ts· beanh � GOf!ff'//!ne Dramamme· Exhibit 99.1
Safe Harbor Disclosure This presentation contains certain "forward-looRing" statements within the meaning of the Priuate Securities Litigation Reform Act of 1995, such as statements regarding the Company's expected financial performance, including reuenue growth, EPS, cash flow, adjusted free cash flow, gross margin, EBITDA margin and Ge3-A, the Company's inuestment in brand-building and Ae3-P, the Company's ability to de-leuer, increase financing capacity and increase Me3-A capacity, the Company's ability to increase shareholder ualue, and the impact of the Company's strategy of acquiring, integrating and building brands. Words such as "continue," "will," "expect," "project," "anticipate," "liRely," "estimate," "may," "should," "could," "would," and similar expressions identify forward-looRing statements. Such forward-looRing statements represent the Company's expectations and beliefs and inuolue a number of Rnown and unRnown risRs, uncertainties and other factors that may cause actual results to differ materially from those expressed or implied by such forward looRing statements. These factors include, among others, general economic and business conditions, regulatory matters, competitiue pressures, the impact of our aduertising and promotional initiatiues, supplier issues, unexpected costs, and other risRs set forth in Part I, Item lA. RisR Factors in the Company's Annual Report on Form 10-K for the year ended March 31, 2016. You are cautioned not to place undue reliance on these forward-looRing statements, which speaR only as of the date of this presentation. Except to the extent required by applicable law, the Company undertaRes no obligation to update any forward-looRing statement contained in this presentation, whether as a result of new information, future euents, or otherwise. ln uestor Day 2016 2
Ron Lombardi President & Chief Executive Officer David Marberger Chief Financial Officer Tim Connors Executive VP, Sales & Marketing
The following principles guide us in this endeavor: outstanding shareholder value through superior growth in sales, profits, and cash flow innovative products that exceed our consumers expectations in true partnerships with our suppliers and customers a company culture founded on leadership, trust, change and execution
Source: Company records
$ (1) Market data as of May 20, 2016 (2) Includes approximate run-rate revenue pro forma for the acquisition of DenTek
team OTC focus emphasis on brand building value proposition formula for growth long-term value creation model
OTC Household OTC Household Note: 2016 figures Include approximate run-rate revenue pro forma for the acquisition of DenTek
Boomers Accelerating Demand for Health Care Growing Incidence of Chronic Disease Digital Explosion of Health Information Employers Shift Responsibility to Employees ACA Increasing Demand with More Newly Insured Shortage of Primary Care Physicians
Domestic Addressable Market ($BN) +0.5% +2.4% +1.3% Source: Company information; Y/Y LTM growth; IRI MULO for the LTM period ending March 20, 2016 $3.8 $1.8 $2.0 +2.9% $4.3 +2.9% $4.4
Domestic Addressable Market ($BN) +0.5% +2.4% Source: Company information; Y/Y LTM growth; IRI MULO for the LTM period ending March 20, 2016 $1.8 $2.0 +3.8% $1.6 +2.6% $7.7 +1.3% $3.8 +2.9% $4.3 +2.9% $4.4
~$60MM / ~10% ~$120MM / ~15%
Manage for Cash Organic Revenue Growth: (1) FY 2013 Fourth Quarter Results presentation (2) Company information per attached reconciliation schedule; reflected on a constant currency basis Invest for Growth
Sep 2010 Nov 2015 Apr 2014 Dec 2010 Dec 2011 Jul 2013 Apr 2014 International
Source: Company filings for OTC revenues for FY 16 Note: Pro forma for DenTek acquisition; excludes Household
Source: Company information; illustrative set of #1/#2 brands shown; reflects brand level gross sales for FY 16
23% 9% 9% 6% 4% 3% 3% 3% 2% 1% 1% 1% Company Information Source: IRI MULO for the LTM period ending March 20, 2016; figures represent share of combined categories for Prestige’s core brands Note: Private Label share of 22% not shown +2.5x the closest branded competitor
Source: IRI multi-outlet + C-Store retail dollar sales growth for relevant period Note: Data reflects retail dollar sales percentage growth versus prior period; FY’16 Organic sales growth presented on a constant currency basis O rg a n ic Sa les G ro w th C o n s u m p ti o n G ro w th 5.2% 3.9% (3.5%) 3.5% 5.9% FY 12 FY 13 FY 14 FY 15 FY 16 5.2% 7.1% (1.8%) 4.1% 8.3%
Source: Company information; figures represent approximate sales growth over ownership period Long-Term Success Story >10 Years Revitalizing Legacy Brands 4 Years Driving Growth by Redefining the Category 2 Years Winning with Professionals and Consumers 1 Year Driving Category Growth 5 Years
Dollar values in billions Source: IRI MULO Retail Dollar Sales, Latest 52 Weeks Ending March 20, 2016
Marketing Brand Management Customer Service IT Finance Product Quality Product Development Sales Advertising Logistics Manufacturing Distribution
$0 $10 $20 $30 $40 $50 $60 Sep-09 Mar-10 Sep-10 Mar-11 Sep-11 Mar-12 Sep-12 Mar-13 Sep-13 Mar-14 Sep-14 Mar-15 Sep-15 Mar-16 Source: Capital IQ market data as of May 20, 2016 Note: S&P 500 Indexed to Prestige Brands price as of Sep-09 Investor Day 2013 Investor Day 2016
Be Preeminent Brand Building and Sales Execution Company Invest in Our Growth Portfolio Organic Growth and Market Share Gains Consumer Insights, Product Innovation, Breakthrough Marketing and Superior Sales Execution
Mining consumer insights Invest in growth brands Innovative consumer, professional and digital marketing campaigns Develop products that consumers need, want and value Unique, meaningful benefits Innovative technology Collaborative business planning Sell-in and sell-through Effective shopper marketing programs that drive loyalty
Consumer Insights Digital / Social Media Customer Business Planning New Product Technical Skills Packaging Design Consumption & Share Gains Profitable Revenue Growth P&L Accountability Customer Performance Scorecards Experienced CPG Marketers Seasoned Product Development Directors Channel Expertise Pipeline of Future Leaders
Source: IRI MULO+C-Store period ending March 20, 2016; Retail Dollar Sales (Canada)
Source: IRI MULO+C-Store period ending March 20, 2016; Retail Dollar Sales
14% 86% 56 Brands >$100MM ~350 Brands(1) <$100MM Source: IRI Multi-Outlet period ending March 20, 2016 (1) Represents brands with consumption exceeding $1MM OTC 11 8 7 6 5 4 4 3 3 1 1 1 1 1
$28 10% % of Total Revenues: $87 14% $111 14% Dollar values in millions Source: Company filings A&P Spending:
Winning with Professionals and Consumers Driving Growth by Redefining the Category Driving Category Growth Long-Term Success Story Revitalizing Legacy Brands
Market Introduction Professional detailing through 2007 OTC switch Market share decline vs private label and Rx Acquisition by Prestige in 2014 MONISTAT Rx
OTC Rx Monistat Private Label (1) Rx data per IMS, data represents unit share of VAF category (2) IRI MULO quarterly rolling LTM data from 2010 through 2014, data represents dollar share of OTC VAF category; Private Label includes other branded offerings 56% 52% 59% 53%
3% 42% Private Label Other Brands Source: IRI MULO+C-Store period ending March 20, 2016; data represents dollar share of VAF category
53% 55% FY 15 FY 16 1.4% 3.1% 1.1% 6.3% FY 15 FY 16 52% 52% FY 15 FY 16 Source: IRI MULO+C-Store period ending March 20, 2016 (1) Represents OTC and Rx treatments Category
Vomiting & Diarrhea Australian Dehydration Market Pre-Hydralyte™
Heat & Outdoor Sports & Exercise Travel Vomiting & Diarrhea Work Vomiting & Diarrhea Australian Dehydration Market Pre-Hydralyte™ Dehydration Category Today
(1) Claim made in Australian market only
FY 11 FY 12 FY 13 FY 14 FY 15 FY 16 Source: Company Information; reflects Total Revenues
Understanding Consumer Insights and Differentiating the Brand New Marketing Campaigns towards New Targets Continuous Product Innovations BC/Goody’s Continues to Drive Growth vs the Category BC/Goody’s is the #1 Analgesic in the Convenience Channel Core Competency in C-Store Fuels Growth of other Core Brands Source: IRI C-Store for the LTM period ending March 20, 2016 for BC/Goody’s combined
Shopper Marketing Hispanic Marketing Sponsorship / Sampling TV & Digital
FY 10 FY 11 FY 12 FY 13 FY 14 FY 15 FY 16 Source: IRI MULO+C-Store period ending March 20, 2016 North American Brands
Source: IRI MULO+C-Store period ending March 20, 2016
FDM Other Source: Company information
Revitalized Packaging More Impactful Claims New Users New Formulation
Mass Drug Convenience Travel Source: IRI MULO+C-Store period ending March 20, 2016
2004 2013 Today
FY 10 FY 11 FY 12 FY 13 FY 14 FY 15 FY 16 Dollar values in millions Source: MULO + C-Store data, reflects retail dollar sales for respective LTM period
Source: Company information per attached reconciliation schedule
~80% of portfolio positioned for durable, consistent organic growth ~$430MM of cumulative Adjusted FCF since 2013 Investor Day Completed 4 acquisitions since 2013 Investor Day aggregating $1.1BN Source: Company information per attached reconciliation schedule
30.5% 35.1% 35.9% FY 10 FY 13 FY 16 52.0% 56.3% 58.1% FY 10 FY 13 FY 16 9.7% 14.1% 13.7% FY 10 FY 13 FY 16 11.8% 7.3% 8.5% FY 10 FY 13 FY 16 Source: Company information per attached reconciliation schedule
69% 59% 58% 52% 49% 45% 45% 45% 41% 39% 37% 32% 31% JNJ CL PG EPC ENR CLX CHD HELE NWL SPB JAH BGS Source: Capital IQ Market data as of May 20, 2016; comparable set includes selected HPC companies Company information per attached reconciliation schedule Jarden and Newell shown separately pre-combination
Source: Capital IQ Market data as of May 20, 2016; comparable set includes selected HPC companies Jarden and Newell shown separately pre-combination Company information per attached reconciliation schedule 36% 32% 28% 27% 23% 23% 22% 19% 18% 17% 17% 13% 11% JNJ CL PG CHD BGS CLX ENR EPC NWL SPB HELE JAH
$10.3 $2.8 $6.1 $3.6 FY 13 FY 14 FY 15 FY 16 Outsourced operating model requires limited capital expenditures Tax basis of acquisitions and NOLs generate lower cash tax rates We expect acquisition-related tax benefits will continue into the future % of Total Revenues: 1.7% 0.5% 0.9% 0.4% $15.0 $10.1 $20.3 $11.1 $40.5 $29.1 $49.2 $57.3 FY 13 FY 14 FY 15 FY 16 Cash Taxes Book Taxes Dollar values in millions Source: Company information per attached reconciliation schedule
Source: Capital IQ Market data as of May 20, 2016; comparable set includes selected HPC companies Note: Free Cash Flow Conversion defined as Non-GAAP Operating Cash Flow less Capital Expenditures over Adjusted Net Income; Adj. Free Cash Flow Yield defined as Free Cash Flow divided by Market Cap as of May 20, 2016 EPC and ENR excluded due to cash flow items related to completed spinoff; Newell pro forma for combination with Jarden Company information per attached reconciliation schedule 168% 159% 157% 142% 137% 132% 125% 100% 95% 92% 7% 6% 3% 5% 4% 6% 4% 4% 5% 6% SPB CL CHD BGS PG NWL CLX JNJ HELE FCF Yield:
$59 $86 $67 $127 $130 $164 $183 >$185 FY 10 FY 11 FY 12 FY 13 FY 14 FY 15 FY 16 FY 17 Dollar values in millions Source: Company information per attached reconciliation schedule (Outlook)
3.2x 3.5x 5.3x 5.0x 4.3x 4.3x 5.8x 5.2x 5.0x 4.3x 3.6x FY 10 FY 11 Q2 FY 11 FY 12 FY 13 FY 14 Q2 FY 15 FY 15 FY 16 FY 17E FY 18E Dollar values in millions; Company information (1) Leverage ratio reflects net debt / covenant defined EBITDA North American Brands (Expectation)
$0.5BN $1.3BN $2.1BN FY 16 FY 17E FY 18E Dollar values in billions; Company information Note: Assumes maximum leverage of 5.5x and average EBITDA acquisition multiple of 8.5x
Compete in categories where we can win Have a strong heritage and connection with consumers Respond to investments and provide innovation opportunities Add to existing core categories or provide entry to new platforms Strong financial profile Accretive to earnings and cash flow Maintain prudent capital structure Driven by potential shareholder value creation Management experience Advertising and promotional expertise Distribution channels New product competency Low-cost operating model
$290 $438 $597 $806 $88 $134 $204 $289 $0.67 $0.99 $1.53 $2.17 FY 10 FY 12 FY 14 FY 16 $59 $67 $130 $183 18.6% CAGR 21.9% CAGR 20.9% CAGR 21.6% CAGR Dollar values in millions, except price per share Source: Company information per attached reconciliation schedule
$806MM, up 12.8% Organic growth of 2.8% $183MM Leverage of 5.0x $2.17, up 16.7% Expected growth of +6% to +8% Organic growth of +1.5% to +2.0% $185MM or more Leverage of ~4.3x $2.30 to $2.36, up +6% to +9% Dollar values in millions Source: Company information per attached reconciliation schedule
team OTC focus emphasis on brand building value proposition formula for growth long-term value creation model
Proven and Repeatable with Long Runway Depth of Leadership Team Strong Market Positions in Niche Categories Proven Operating Model with Superior Profile
Source: “Health & Wellness Strategy”, Market Performance Group 2016
Source: “Health & Wellness Strategy”, Market Performance Group 2016
We define Non-GAAP Organic Revenues on a Constant Currency basis as Total Revenues excluding acquisitions and divestitures and the impact of current year foreign exchange rates on total revenues. We define Non-GAAP Adjusted EBITDA as earnings before interest expense (income), income taxes, depreciation and amortization, inventory step-up charges, certain other legal and professional fees, other acquisition-related costs, costs associated with our CEO transition, gain on sale of asset, and loss on extinguishment of debt. Non-GAAP Adjusted EBITDA Margin is calculated as Non-GAAP Adjusted EBITDA divided by GAAP Total Revenues. We define Non-GAAP Adjusted Gross Margin as Gross Profit before inventory step up charges, and certain other acquisition and integration-related costs. Non-GAAP Adjusted Gross Margin percentage is calculated based on Non-GAAP Adjusted Gross Margin divided by GAAP Total Revenues. We define Non-GAAP Adjusted General and Administrative expenses as General and Administrative expenses minus certain other legal and professional fees, acquisition and other integration costs, and costs associated with our CEO transition. Non-GAAP Adjusted General and Administrative expense percentage is calculated based on Non- GAAP Adjusted General and Administrative expense divided by GAAP Total Revenues. We define Non-GAAP Adjusted Net Income as Net Income before inventory step-up charges, certain other legal and professional fees, other acquisition and integration-related costs, costs associated with our CEO transition, accelerated amortization of debt origination costs, gain on sale of asset, loss on extinguishment of debt, and the applicable tax impacts associated with these items and other non-deductible items. Non-GAAP Adjusted EPS is calculated based on Non-GAAP Adjusted Net Income, divided by the weighted average number of common and potential common shares outstanding during the period. We define Non-GAAP Free Cash Flow as net cash provided by operating activities less cash paid for capital expenditures. We define Non-GAAP Adjusted Free Cash Flow as net cash provided by operating activities less purchases of property and equipment plus payments associated with a premium on extinguishment of the 2012 Senior Notes and acquisitions for integration, transition, and other payments associated with acquisitions. We define Non-GAAP Cash Tax Expense as GAAP Provision for Income Taxes less deferred income tax from the cash flow statement. Non-GAAP Organic Revenues on a Constant Currency basis, Non-GAAP Adjusted EBITDA, Non-GAAP Adjusted EBITDA Margin, Non-GAAP Adjusted Gross Margin, Non-GAAP Adjusted Gross Margin percentage, Non-GAAP Adjusted General and Administrative Expense, Non-GAAP Adjusted General and Administrative Expense percentage, Non-GAAP Adjusted Net Income, Non-GAAP Adjusted EPS, Non-GAAP Free Cash Flow, Non-GAAP Adjusted Free Cash Flow and Non-GAAP Cash Tax Expense may not be comparable to similarly titled measures reported by other companies.
We are presenting Non-GAAP Organic Revenues on a Constant Currency basis, Non-GAAP Adjusted EBITDA, Non-GAAP Adjusted EBITDA Margin, Non-GAAP Adjusted Gross Margin, Non-GAAP Adjusted Gross Margin percentage, Non-GAAP Adjusted General and Administrative Expense, Non-GAAP Adjusted General and Administrative Expense percentage, Non- GAAP Adjusted Net Income, Non-GAAP Adjusted EPS, Non-GAAP Free Cash Flow, Non-GAAP Adjusted Free Cash Flow, and Non-GAAP Cash Tax Expense because they provide additional ways to view our operation when considered with both our GAAP results and the reconciliation to net income and net cash provided by operating activities, respectively, which we believe provides a more complete understanding of our business than could be obtained absent this disclosure. Each of Non-GAAP Organic Revenues on a Constant Currency basis, Non-GAAP Adjusted EBITDA, Non-GAAP Adjusted EBITDA Margin, Non-GAAP Adjusted Gross Margin, Non-GAAP Adjusted Gross Margin percentage, Non-GAAP Adjusted General and Administrative Expense, Non-GAAP Adjusted General and Administrative Expense percentage, Non-GAAP Adjusted Net Income, Non-GAAP Adjusted EPS, Non-GAAP Free Cash Flow, Non-GAAP Adjusted Free Cash Flow and Non-GAAP Cash Tax Expense 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 shareholder value; and (iii) we use Non-GAAP Organic Revenues on a Constant Currency basis, Non-GAAP Adjusted EBITDA, Non-GAAP Adjusted EBITDA Margin, Non-GAAP Adjusted Gross Margin, Non-GAAP Adjusted Gross Margin percentage, Non-GAAP Adjusted General and Administrative Expense, Non-GAAP Adjusted General and Administrative Expense percentage, Non-GAAP Adjusted Net Income, Non-GAAP Adjusted EPS, Non-GAAP Free Cash Flow, Non-GAAP Adjusted Free Cash Flow and Non-GAAP Cash Tax Expense 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 Organic Revenues on a Constant Currency basis, Non-GAAP Adjusted EBITDA, Non-GAAP Adjusted EBITDA Margin, Non-GAAP Adjusted Gross Margin, Non-GAAP Adjusted Gross Margin percentage, Non-GAAP Adjusted General and Administrative Expense, Non-GAAP Adjusted General and Administrative Expense percentage, Non-GAAP Adjusted Net Income, Non-GAAP Adjusted EPS, Non- GAAP Free Cash Flow, Non-GAAP Adjusted Free Cash Flow and Non-GAAP Cash Tax Expense have limitations, and you should not consider these measures in isolation from or as an alternative to GAAP measures such as Total Revenues, General and Administrative expense, Operating income, Net income, Provision for Income Taxes, 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 Organic Revenues on a Constant Currency basis, Non-GAAP Adjusted EBITDA, Non-GAAP Adjusted EBITDA Margin, Non- GAAP Adjusted Gross Margin, Non-GAAP Adjusted Gross Margin percentage, Non-GAAP Adjusted General and Administrative Expense, Non-GAAP Adjusted General and Administrative Expense percentage, Non-GAAP Adjusted Net Income, Non-GAAP Adjusted EPS, Non-GAAP Free Cash Flow, Non-GAAP Adjusted Free Cash Flow and Non-GAAP Cash Tax Expense all of which are non-GAAP financial measures, to GAAP Gross Profit, GAAP General and Administrative expense, GAAP Net Income, GAAP Provision for Income Taxes, GAAP Diluted EPS and GAAP Net cash provided by operating activities, our most directly comparable financial measures presented in accordance with GAAP.
2016 2015 GAAP Total Revenues 806,247 714,623 Adjustments: Hydralyte revenues (1,217) - Insight revenues (73,630) - DenTek revenues (10,687) - Total adjustments (85,534) - Non-GAAP Organic Revenues 720,713 714,623 Organic Revenue Growth 0.9% Impact of foreign currency exchange rates (13,862) Non-GAAP Organic Revenues on a constant currency basis 720,713 700,761 Constant Currency Organic Revenue Growth 2.8% Dollar values in thousands
2010 2011 2012 2013 2014 2015 2016 GAAP General and Administrative expenses 34,195$ 41,960$ 56,700$ 51,467$ 48,481$ 81,273$ 72,418$ Adjustments Costs associated with CEO transition - - - - - - 1,406 Legal and other professional fees associated with acquisitions - 7,729 13,807 98 1,111 10,974 2,112 Transition and other acquisition costs - - 3,588 5,811 - 13,473 289 Unsolicited porposal costs - - 1,737 534 - - - Total adjustments - 7,729 19,132 6,443 1,111 24,447 3,807 Non-GAAP Adjusted G&A 34,195$ 34,231$ 37,568$ 45,024$ 47,370$ 56,826$ 68,611$ Non-GAAP Adjusted G&A % 11.8% 10.3% 8.6% 7.3% 7.9% 8.0% 8.5% 2010 2011 2012 2013 2014 2015 2016 GAAP Total Revenues 289,652$ 332,905$ 437,819$ 620,529$ 597,381$ 714,623$ 806,247$ GAAP Gross Margin 150,494$ 167,273$ 224,118$ 343,737$ 335,551$ 406,223$ 467,211$ Adjustments Inventory step up associated with acquisitions - 7,273 1,795 23 577 2,225 1,387 Additional inventory transition and supplier costs associated with acquisitions - - - 5,646 407 - - Total adjustments - 7,273 1,795 5,6 9 9 4 2, 25 1,387 Non-GAAP Adjusted Gross Margin 150,4 4 174,546 225,913 349, 06 336,535 40 ,448 468,59 N n-GAAP Adjusted Gross argin % 52.0% 52.4% 51.6% 56.3% 56.3% 57.2% 58.1% Dollar values in thousands
2010 2011 2012 2013 2014 2015 2016 GAAP Total Revenues 289,652$ 332,905$ 437,819$ 620,529$ 597,381$ 714,623$ 806,247$ GAAP Net Income 32,115$ 29,220$ 37,212$ 65,505$ 72,615$ 78,260$ 99,907$ Income from Disc Ops 112 (591) - - - - - Loss on sale of disc ops (157) 550 - - - - - Interest Expense, net 22,935 27,317 41,320 84,407 68,582 81,234 85,160 Provision for income taxes 20,664 19,349 23,945 40,529 29,133 49,198 57,278 Depreciation and amortization 10,001 9,876 10,734 13,235 13,486 17,740 23,676 Non-GAAP EBITDA 85,670 85,721 113,211 203,676 183,816 226,432 266,021 Sales costs related to acquisitions - - - 411 - - - Inventory step up - 7,273 1,795 23 577 2,225 1,387 Inventory related acquisition costs - - - 220 407 - - Additional supplier costs - - - 5,426 - - - Costs associated with CEO transition - - - - - - 1,406 Legal and other professional fees associated with acquisitions - 7,729 13,807 98 1,111 10,974 2,112 Integration, transition and other costs associated with acquisitions - - 3,588 5,811 - 10,533 289 Stamp Duty - - - - - 2,940 - Unsolicited porposal costs - - 1,737 534 - - - Loss on extinguishment of debt 2,656 300 5,409 1,443 18,286 - 17,970 Gain on settlement - - (5,063) - - - - Gain on sale of asset - - - - - (1,133) - Adjustments to EBITDA 2,656 15,302 21,273 13,966 20,381 25,539 23,164 Non-GAAP Adjusted EBITDA 88,326$ 101,023$ 134,484$ 217,642$ 204,197$ 251,971$ 289,185$ Non-GAAP Adjusted EBITDA % 30.5% 30.3% 30.7% 35.1% 34.2% 35.3% 35.9% Dollar values in thousands
2010 2011 2012 2013 2014 2015 2016 Net Income EPS Net Income EPS Net Income EPS Net Income EPS Net Income EPS Net Income EPS Net Income EPS GAAP Net Income 32,115$ 0.64$ 29,220$ 0.58$ 37,212$ 0.73$ 65,505$ 1.27$ 72,615$ 1.39$ 78,260$ 1.49$ 99,907$ 1.88$ Adjustments Income from discontinued ops. - - (591) (0.01) - - - - - - - - - - Loss on sale of discontinued ops. - - 550 0.01 - - - - - - - - - - Incremental interest expense to finance Acquisition - - 800 0.02 - - - - - - - - - - Sales costs related to acquisitions - - - - - - 411 0.01 - - - - - - Inventory step up - - 7,273 0.14 1,795 0.04 23 - 577 0.01 2,225 0.04 1,387 0.03 Inventory related acquisition costs - - - - - - 220 - 407 0.01 - - - - Additional supplier costs - - - - - - 5,426 0.11 - - - - - - Costs associated with CEO transition - - - - - - - - - - - - 1,406 0.02 Legal and other professional fees assoc. with acq'ns - - 7,729 0.15 13,807 0.27 98 - 1,111 0.02 10,974 0.21 2,112 0.04 Transition and other Acq costs - - - - 3,588 0.07 5,811 0.11 - - 10,533 0.20 289 0.01 Stamp Duty - - - - - - - - - - 2,940 0.05 - - Unsolicited porposal costs - - - - 1,737 0.03 534 0.01 - - - - - - Loss on extinguishment of debt 2,656 0.05 300 0.01 5,409 0.11 1,443 0.03 18,286 0.35 - - 17,970 0.34 Gain on settlement - - - - (5,063) (0.10) - - - - - - - - Gain on sale of asset - - - - - - - - - - (1,133) (0.02) - - Accelerated amort. of debt discounts and issue costs - - - - - - 7,746 0.15 5,477 0.10 218 - - - Tax impact on adjustments (1,009) (0.01) (5,513) (0.11) (8,091) (0.16) (8,329) (0.16) (9,100) (0.17) (5,968) (0.11) (7,608) (0.15) Impact of state tax adjustments (352) (0.01) - - (237) - (1,741) (0.03) (9,465) (0.18) - - - - Total adjustments 1,295 0.03 10,548 0.21 12,945 0.26 11,642 0.23 7,293 0.14 19,789 0.37 15,556 0.29 Non-GAAP Adjusted Net Income and Non-GAAP Adjusted EPS 33,410$ 0.67$ 39,768$ 0.79$ 50,157$ 0.99$ 77,147$ 1.50$ 79,908$ 1.53$ 98,049$ 1.86$ $115,463 2.17$ Dollar values in thousands, except per share data
2010 2011 2012 2013 2014 2015 2016 GAAP Net Income 32,115$ 29,220$ 37,212$ 65,505$ 72,615$ 78,260$ 99,907$ Adjustments Adjustments to reconcile net income to net cash provided by operating activities as shown in the statement of cash flows 31,137 26,095 35,674 59,497 50,912 64,668 96,221 Changes in operating assets and liabilities, net of effects from acquisitions as shown in the statement of cash flows (3,825) 31,355 (5,434) 12,603 (11,945) 13,327 (21,778) Total adjustments 27,312 57,450 30,240 72,100 38,967 77,995 74,443 GAAP Net cash provided by operating activities 59,427 86,670 67,452 137,605 111,582 156,255 174,350 Purchases of property and equipment (673) (655) (606) (10,268) (2,764) (6,101) (3,568) Non-GAAP Free Cash Flow 58,754 86,015 66,846 127,337 108,818 150,154 170,782 Premiuim payment on 2010 Senior Notes - - - - 15,527 - - Premiuim payment on extinguishment of 2012 Senior Notes - - - - - - 10,158 Accelerated interest payments due to debt refinancing - - - - 4,675 - - Integration, transition and other payments associated with acquisitions - - - - 512 13,563 2,461 Total adjustments - - - - 20,714 13,563 12,619 Non-GAAP Adjusted Free Cash Flow 58,754$ 86,015$ 66,846$ 127,337$ 129,532$ 163,717$ 183,401$ Dollar values in thousands
Dollar values in thousands 2013 2014 2015 2016 GAAP Provision for Income Taxes 40,529$ 29,133$ 49,198$ 57,278$ Adjustments Deferred Income Taxes (25,505) (19,012) (28,922) (46,152) Non-GAAP Cash Tax Expense 15,024 10,121 20,276 11,126
Projected FY'17 GAAP Net cash provided by operating activities 190$ Additions to property and equipment for cash (8) Projected Non-GAAP Free Cash Flow 182 Payments associated with acquisitions 3 Adjusted Non-GAAP Projected Free Cash Flow 185$ Dollar values in thousands Low High Projected FY'17 GAAP EPS 2.22$ 2.28$ Adjustments: Costs associated with DenTek integration 0.08 0.08 Total adjustments 0.08 0.08 Projected Non-GAAP Adjusted EPS 2.30$ 2.36$