Irinquiries@prestigebrands.com
Prestige Consumer Healthcare Inc.
660 White Plains Road – Ste 250
Tarrytown, NY 10591
Telephone: 914-524-6819
 |
Eric
S. Klee
Secretary
and General Counsel
April 8,
2010
VIA
EDGAR
Securities
and Exchange Commission
100 F
Street, N.E.
Washington,
D.C. 20549
Attn.:
Mr. Jim B. Rosenberg
(Mail
Stop 4720)
| RE: | Prestige Brands Holdings, Inc. | |
| Form 10-K for Fiscal Year Ended March 31, 2009 | ||
| Schedule 14A Filed July 2, 2009 | ||
| File No. 001-32433 |
Dear Mr.
Rosenberg:
Prestige
Brands Holdings, Inc. (sometimes referred to herein as the “Registrant” or the
“Company”), submits this response to your letter of March 11, 2010 to Mr. Peter
Anderson regarding the above-referenced Form 10-K and Schedule
14A. For convenience, we have reproduced the Staff's comments
immediately preceding each of the Registrant’s responses.
Form 10-K For The Fiscal
Year Ended March 31, 2009
Item
I. Business
Intellectual Property, page
14
Comment
|
1.
|
Please
expand this section to disclose all material patents, the products or
technologies to which they relate, the related expiration dates and the
jurisdictions that issued them. Provide the same information
for material owned and in-licensed patents and indicate if the patents are
owned or licensed.
|
| 914-524-6878 PHONE | PRESTIGE BRANDS HOLDINGS, INC. | eklee@prestigebrandsinc.com |
| 914-524-7488 FAX | 90 NORTH BROADWAY, IRVINGTON, NEW YORK 10533 | |
| NYSE: PBH |
Securities and Exchange
Commission
April 8, 2010
Page 2
Response
No
additional disclosure will be necessary as none of the patents owned or licensed
by the Registrant and its subsidiaries is material to the Registrant on a
consolidated basis. The Company will revise its disclosures
accordingly in future filings.
Item
2. Properties, page 26
Comment
|
2.
|
We
note your disclosure that one of your core competencies is, “Innovation
and Product Development.” Please consider where these
activities take place and whether your lease agreement for this facility
is material to your company and should be filed as an
exhibit. Please revise or advise
accordingly.
|
Response
Supplementally,
we advise you that the activities related to product innovation and development
take place at a number of locations, including those of our suppliers and other
third-parties who assist us with those functions. To the extent that
any of those activities take place at our corporate headquarters in Irvington,
New York, those activities could be readily re-located to another location
without material, if any, interruption. Accordingly, we do not
believe that the lease for our corporate headquarters is material to those
activities or otherwise to the Registrant.
Item
7. Management’s Discussion and Analysis of Financial Condition and
Result of Operations
Valuation of Intangible
Assets and Goodwill, page 34
Comment
|
3.
|
For
reporting units in which the estimated fair value is not substantially in
excess of the carrying amount and therefore are at risk of failing step
one of the impairment test, please revise your disclosure to include the
following:
|
|
§
|
The
percentage by which fair value exceeded carrying value as of the date of
the most recent test;
|
|
§
|
The
amount of goodwill allocated to the reporting
unit;
|
|
§
|
A
description of the methods and key assumptions used and how the key
assumptions were determined; and
|
|
§
|
A
discussion of the degree of uncertainty associated with the key
assumptions. The discussion regarding uncertainty should
provide specifics to the extent
|
| 914-524-6878 PHONE | PRESTIGE BRANDS HOLDINGS, INC. | eklee@prestigebrandsinc.com |
| 914-524-7488 FAX | 90 NORTH BROADWAY, IRVINGTON, NEW YORK 10533 | |
| NYSE: PBH |
Securities and Exchange
Commission
April 8, 2010
Page 3
| possible (e.g., the valuation model assumes recovery from a business downturn within a defined period of time). |
Response
We
believe that the Registrant's current disclosures already adequately address the
third and fourth bullet points above - key assumptions, how they were determined
and the appropriate degree of uncertainty with respect to these
assumptions. In addition to the disclosures already included in the
Registrant’s Annual Report on Form 10-K for the fiscal year ended March 31,
2009, we will add in future filings disclosures similar to the following when
the fair value of our reporting units does not substantially
exceed carrying value.
The
Company reports Goodwill and Indefinite-Lived Intangible Assets in three
operating segments; Over-the-Counter Healthcare, Household Cleaning and Personal
Care. The Company identifies its reporting units in accordance with
FASB Accounting Standards Codification Subtopic 280-10. The carrying value and
fair value for intangible assets and goodwill for a reporting unit are
calculated based on key assumptions and valuation methodologies previously
discussed. As a result, any material changes to these assumptions
could require the Company to record additional impairment charges in the
future.
Goodwill
|
Operating Segment
|
Goodwill
|
Percent by which Fair Value
Exceeded Carrying Value in Annual
Test
|
|
Over-the-Counter
Healthcare
|
$ 104,100,000
|
58.1%
|
|
Household
Cleaning
|
7,389,000
|
0.0%
|
|
Personal
Care
|
2,751,000
|
207.5%
|
Indefinite-Lived Intangible
Assets
|
Operating Segment
|
Indefinite-Lived
Intangible Assets
|
Percent by which Fair Value
Exceeded Carrying Value in Annual
Test
|
|
Over-the-Counter
Healthcare
|
$ 345,467,000
|
31.8%
|
|
Household
Cleaning
|
154,709,000
|
6.6%
|
|
Personal
Care
|
–
|
–
|
| 914-524-6878 PHONE | PRESTIGE BRANDS HOLDINGS, INC. | eklee@prestigebrandsinc.com |
| 914-524-7488 FAX | 90 NORTH BROADWAY, IRVINGTON, NEW YORK 10533 | |
| NYSE: PBH |
Securities and Exchange
Commission
April 8, 2010
Page 4
Schedule 14A
Compensation Discussion and
Analysis
Annual Cash Incentive Plan,
page 23
Comment
|
4.
|
We
note that your annual incentive cash awards are made based on a number of
performance factors. Regardless of whether such awards were
actually made, you should discuss the minimum, target and maximum levels
of company performance that were set, and the level of achievement of each
target. Please provide draft disclosure for your next proxy
statement that includes the minimum, target and maximum performance
targets that you have set for 2010, how the extent of achievement will
affect the bonuses ultimately awarded, and confirm that in your proxy
statement you will include the actual extent of achievement of each
performance objective.
|
Response
Set forth
below is a template of how we would propose making the requested disclosures in
future filings:
For
awards under our 2010 Management Bonus Plan, we used a performance matrix
comprised of varying levels for the Company’s net sales and EBITDA during
2010. In order for an employee to earn a minimum, target or maximum
bonus under the 2010 Management Bonus Plan, our 2010 net sales and EBITDA would
have been required to meet one of the performance levels set forth in the table
below.
|
Performance
Level
(Percent
of Plan)
|
Net
Sales
|
EBITDA
|
Payout
Amount
|
|
Minimum
(95%)
|
|||
|
Target
(100%)
|
|||
|
Maximum
(105%)
|
Our 2010
net sales and EBITDA were $_____ and $_____, respectively, which resulted in our
employees receiving a bonus payout in an amount equal to __% of their target
bonus. The 2010 Management Bonus Plan payouts to our Named Executive
Officers are set forth in the “Non-Equity Incentive Plan Compensation” column of
the Summary Compensation Table on page ___ of this Proxy
Statement.
| 914-524-6878 PHONE | PRESTIGE BRANDS HOLDINGS, INC. | eklee@prestigebrandsinc.com |
| 914-524-7488 FAX | 90 NORTH BROADWAY, IRVINGTON, NEW YORK 10533 | |
| NYSE: PBH |
Securities and Exchange
Commission
April 8, 2010
Page 5
Restricted Common Stock
Awards, page 24
Comment
|
5.
|
We
note that the 90% level of performance regarding net sales and EBITDA
results in the vesting of 75% of stock awards based on a three year
performance period. Similarly, please disclose the level of
performance that must be achieved in order to attain the 100% and 150%
vesting levels, respectively. Also, disclose the EBITDA and net
sales targets and the number of shares for each NEO that relates to the
minimum, target and maximum levels of performance. You should
provide this information whether or not the net sales and EBITDA targets
were met and whether awards vested and to what
extent.
|
Response
Set forth
below is a template of how we would propose making the requested disclosures in
future filings:
For
awards under our 2005 Long-Term Equity Incentive Plan, we used a performance
matrix comprised of varying levels for the Company’s net sales and EBITDA during
2010. In order for an employee to earn a minimum, target or maximum
number of shares under awards having a 2010 performance period, our net sales
and EBITDA would have been required to meet one of the performance levels set
forth in the table below.
|
Performance
Level
(Percent
of Plan)
|
Net
Sales
|
EBITDA
|
Payout
Amount
|
|
Minimum
(90%)
|
|||
|
Target
(100%)
|
|||
|
Maximum
(105%)
|
Our 2010
net sales and EBITDA were $_____ and $_____, respectively, which resulted in our
employees earning a number of shares equal to __% of their target
awards. The value of the number of shares earned by our Named
Executive Officers based on our 2010 performance is set forth in the “Equity
Incentive Plan Compensation” column of the Summary Compensation Table on page
___ of this Proxy Statement.
|
|
* *
*
|
| 914-524-6878 PHONE | PRESTIGE BRANDS HOLDINGS, INC. | eklee@prestigebrandsinc.com |
| 914-524-7488 FAX | 90 NORTH BROADWAY, IRVINGTON, NEW YORK 10533 | |
| NYSE: PBH |
Securities and Exchange
Commission
April 8, 2010
Page 6
|
|
The
Registrant hereby acknowledges
that:
|
|
§
|
the
Registrant is responsible for the adequacy and accuracy of the disclosure
in the filings;
|
|
§
|
staff
comments or changes to disclosure in response to staff comments do not
foreclose the Commission from taking any action with respect to the
filings; and
|
|
§
|
the
Registrant may not assert staff comments as a defense in any proceeding
initiated by the Commission or any person under the federal securities
laws of the United States.
|
We trust
that this has been responsive to the Commission's comments. If there
are additional questions or comments, please contact the
undersigned.
Thanking
you in advance for your cooperation.
| Very truly yours, | |||
| /s/ Eric S. Klee | |||
| Eric S. Klee | |||
cc:
Peter J. Anderson
Gary M.
Brown, Esq.
| 914-524-6878 PHONE | PRESTIGE BRANDS HOLDINGS, INC. | eklee@prestigebrandsinc.com |
| 914-524-7488 FAX | 90 NORTH BROADWAY, IRVINGTON, NEW YORK 10533 | |
| NYSE: PBH |