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
6, 2006
PRESTIGE
BRANDS HOLDINGS, INC.
|
Delaware
|
001-32433
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20-1297589
|
|
(State
or Other Jurisdiction
of
Incorporation)
|
(Commission
File Number)
|
(I.R.S.
Employer
Identification
No.)
|
90
North Broadway, Irvington, New York 10533
(Address
of Principal executive offices, including Zip Code)
(914)
524-6810
(Registrant’s
telephone number, including area code)
Check
the
appropriate box 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.13e-4(c))
1
Item
2.02. Results of Operations and Financial Condition.
On
February 6, 2006, Prestige Brands Holdings, Inc. (the "Company") issued the
press release that is furnished as Exhibit 99.1 to this Current Report on Form
8-K, which by this reference is incorporated herein as if copied verbatim,
with
respect to fiscal year 2006 third quarter results of operations.
Item
7.01. Regulation FD Disclosure.
The
information set forth in Item 2.02 above is incorporated by reference as if
fully set forth herein.
Item
9.01. Financial Statements and Exhibits.
(a) Financial
Statements. None
(b) Pro
Forma
Financial Information. None
(c) Exhibits.
99.1
Press
Release issued by Prestige Brands Holdings, Inc. dated February 6, 2006
(furnished).
2
SIGNATURE
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 6, 2006
|
PRESTIGE
BRANDS HOLDINGS, INC.
|
|
|
By:
|
/s/
Charles N. Jolly
|
|
|
Name:
|
Charles
N. Jolly
|
|
|
Title:
|
General
Counsel
|
3
Prestige
Brands Holdings, Inc. Reports Third Quarter Fiscal 2006
Results
Net
Revenues Increase By 9% Over Comparable Period
Chore
Boy
and Dental Concepts acquisitions integrated
Irvington,
NY, February 6, 2006—Prestige Brands Holdings, Inc. (PBH-NYSE), a consumer
products company with a diversified portfolio of well-recognized brand names,
today announced results for the third fiscal quarter and nine months ended
December 31, 2005.
December
Quarter Results
Net
revenues for the third quarter ended December 31, 2005 were $79.9 million,
or 9%
ahead of last year’s comparable period net revenues of $73.0 million. The
current December quarter results include two months of sales of Chore Boy® brand
household scrubbers and approximately six weeks of sales of the Dental Concepts
products, including The Doctor’s® Night Guard and The Doctor’s® BrushPicks, all
of which were acquired in the fall of 2005. Excluding the effects of these
acquisitions, net revenues for the quarter would have increased by $2.8 million,
or 4%.
Operating
income for the third quarter ended December 31, 2005 was $24.8 million or 6%
below the third quarter of fiscal 2005. The decline in operating income period
to period, despite the increase in revenues, resulted primarily from increases
in advertising and promotion spending behind major brands, legal and accounting
expenses related to the restatement of historical results and related internal
investigation and fuel-related increases in cost of sales.
Net
income for the quarter was $9.3 million or $0.19 per basic and diluted share,
an
increase of $0.2 million over net income of $9.1 million for the comparable
prior year period, in part due to a decrease in interest expense of $2.4 million
compared to the prior period.
Year-to-Date
Results
For
the
nine months ended December 31, 2005, net revenues were $216.7 million which
represents a 2% increase over the comparable period in the prior year. Excluding
the impact of acquisitions (Little Remedies in the first six months of the
fiscal year, Chore Boy and Dental Concepts in the third quarter), revenues
declined 2%. For the same period, operating income increased 5% with improved
gross margins more than offsetting higher advertising and promotion
expenses.
Nine-month
net income for the period ended December 31, 2005 was $22.6 million, which
represents a 90% increase over prior year net income of $11.9 million primarily
due to a decrease in interest expense of $6.9 million and a decrease in the
loss
on extinguishment of debt of $7.6 million compared to the prior period. Earnings
per share for the nine-month period were $0.46 (basic) and $0.45 (fully
diluted).
Free
Cash Flow
Free
cash
flow is a “non GAAP financial measure” as that term is defined by the Securities
and Exchange Commission in Regulation G. We view “free cash flow” as an
important measure because it is an indicator of cash available for debt
repayment and to fund acquisitions. We define “free cash flow” as operating cash
flow less capital expenditures.
The
Company’s free cash flow for the three months ended December 31, 2005 was $11.1
million with operating cash flows of $11.3 million less capital expenditures
of
$0.2 million. For the nine-month fiscal year-to-date period, free cash flow
was
$35.4 million with operating cash flows of $35.8 million less capital
expenditures of $0.4 million. The Company’s free cash flow is higher than
reported net income as a result of the amortization of intangibles, changes
in
the components of working capital, certain tax benefits and relatively low
capital expenditures.
Results
by Segment
The
Company conducts operations through three principal business segments:
Over-the-Counter Drug, Household Products and Personal Care.
Over-the-Counter
Products
Net
revenues of over-the-counter products for the third quarter ending December
31,
2005 were $42.1 million, which was $1.1 million or 3% greater than last year’s
third quarter net revenues of $41.0 million. In mid-November, the Company
completed the acquisition of Dental Concepts LLC and its line of therapeutic
Over-the-Counter dental products. The integration of this business into the
Company’s infrastructure is now nearly complete, and the quarter’s results
include approximately 6 weeks of revenue from this acquisition. Excluding sales
of Dental Concepts, net revenues for this segment decreased by 2%. Of our
remaining brands with meaningful changes during the quarter, the Little Remedies
and Dermoplast brands experienced sales increases while the Clear Eyes,
Chloraseptic and Compound W brands experienced declines.
Household
Products
Net
revenues for household products were $30.8 million in the third fiscal quarter,
an increase of $6.3 million or 26% from last year’s third quarter revenues of
$24.5 million. At the end of October, the Company completed the acquisition
of
the Chore Boy line of household scrubbing devices. This business is now fully
integrated into the Prestige operating system and it contributed two months
of
revenue during the quarter. The household products sales increase, excluding
the
Chore Boy contribution, was 17% for the quarter. Both Comet and Spic and Span
contributed to the sales growth in the quarter.
Personal
Care Products
The
smallest segment of the Company’s business registered net revenues of $7.0
million, a $0.6 million decline over last year’s third quarter net revenues of
$7.6 million.
Conference
Call
The
Company will host a conference call to review its third quarter fiscal 2006
results on Tuesday, February 7, 2006 at 8:30 am (EST). The toll free dial in
number for the call is 1-800-573-4842. International callers may dial
617-224-4327. The conference password is “Prestige”. We will have a live
internet web cast of the call, as well as an archived replay, which can be
accessed from the investor relations page of www.prestigebrandsinc.com.
Forward
Looking Statements
All
statements, other than statements of historical fact included in this release,
are forward-looking statements, as that term is defined in 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. There are certain factors that could cause
actual results to differ materially from those anticipated by some of the
statements made. These include: 1. the ability to achieve business plans; 2.
successfully executing, managing and integrating key acquisitions; 3. the
ability to manage and maintain key customer relationships; 4. the ability to
maintain key manufacturing and supply sources; 5. the ability to successfully
manage regulatory, tax and legal matters (including product liability matters),
and to resolve pending matters; 6. the ability to successfully manage increases
in the prices of raw materials used to make the Company’s products; 7. the
ability to stay close to consumers in an era of increased media fragmentation;
and 8. the ability to stay on the leading edge of innovation. For additional
information concerning factors that could cause actual results to materially
differ from those projected herein, please refer to our most recent 10-K, 10-Q
and 8-K reports filed with the Securities and Exchange Commission.
About
Prestige Brands Holdings
Located
in Irvington, New York, Prestige Brands Holdings is a marketer and distributor
of brand name over-the-counter drug, personal care and household cleaning
products sold throughout the U.S. and Canada. Key brands include Compound W®
wart remover, Chloraseptic® sore throat treatment, New Skin® liquid bandage,
Clear eyes® and Murine® eye care products, Little Remedies® pediatric over the
counter products, Cutex® nail polish remover, Comet® and Spic and Span®
household cleaners and other well-known brands.
PRESTIGE
BRANDS HOLDINGS, INC.
CONSOLIDATED
STATEMENTS OF OPERATIONS
|
|
Three
months
ended
December 31
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Nine
months
ended
December 31
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|||||||||||
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(In
thousands, except per share data)
|
2005
|
|
|
2004
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|
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2005
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2004
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|||
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Revenues
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|||||||||||||
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Net
sales
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$
|
79,829
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$
|
73,018
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$
|
216,577
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$
|
211,630
|
|||||
|
Other
revenues
|
27
|
25
|
77
|
126
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|||||||||
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Net
revenues
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79,856
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73,043
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216,654
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211,756
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|||||||||
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Cost
of Sales
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|||||||||||||
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Costs
of sales
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38,726
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33,241
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103,224
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104,320
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|||||||||
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Gross
profit
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41,130
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39,802
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113,430
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107,436
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|||||||||
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Operating
Expenses
|
|||||||||||||
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Advertising
and promotion
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7,385
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5,168
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26,307
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24,402
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|||||||||
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General
and administrative
|
6,159
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5,690
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15,182
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15,113
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|||||||||
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Depreciation
|
520
|
457
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1,495
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1,395
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|||||||||
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Amortization
of intangible assets
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2,314
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2,148
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6,610
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5,753
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|||||||||
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Total
operating expenses
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16,378
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13,463
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49,594
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46,663
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|||||||||
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Operating
income
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24,752
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26,339
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63,836
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60,773
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|||||||||
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Other
income (expense)
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|||||||||||||
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Interest
income
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144
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48
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451
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135
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|||||||||
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Interest
expense
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(9,670
|
)
|
(12,042
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)
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(27,158
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)
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(34,012
|
)
|
|||||
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Loss
on extinguishment of debt
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--
|
--
|
--
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(7,567
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)
|
||||||||
|
Total
other income (expense)
|
(9,526
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)
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(11,994
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)
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(26,707
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)
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(41,444
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)
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|||||
|
Income
before provision for
income
taxes
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15,226
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14,345
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37,129
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19,329
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|||||||||
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Provision
for income taxes
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5,881
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5,218
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14,481
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7,392
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|||||||||
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Net
income
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9,345
|
9,127
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22,648
|
11,937
|
|||||||||
|
Cumulative
preferred dividends on Senior Preferred and Class B Preferred
Units
|
--
|
(3,895
|
)
|
--
|
(11,341
|
)
|
|||||||
|
Net
income available to members and common shareholders
|
$
|
9,345
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$
|
5,232
|
$
|
22,648
|
$
|
596
|
|||||
|
Basic
earnings per share
|
$
|
0.19
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$
|
0.21
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$
|
0.46
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$
|
0.02
|
|||||
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Diluted
earnings per share
|
$
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0.19
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$
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0.20
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$
|
0.45
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$
|
0.02
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|||||
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Weighted
average shares outstanding:
Basic
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48,929
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24,725
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48,874
|
24,617
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|||||||||
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Diluted
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50,010
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26,613
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50,007
|
26,543
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|||||||||
PRESTIGE
BRANDS HOLDINGS, INC.
FREE
CASH FLOW
A
reconciliation of net income to free cash flow for the three and nine month
period ended December 31, 2005 is as follows:
|
(In
thousands)
|
Three
months ended
December
31, 2005
|
Nine
months ended
December
31, 2005
|
|||||
|
Net
income
|
$
|
9,345
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$
|
22,648
|
|||
|
Depreciation,
amortization and other non-cash charges
|
3,545
|
10,062
|
|||||
|
Deferred
income taxes
|
3,582
|
11,543
|
|||||
|
Working
capital changes
|
(5,166
|
)
|
(8,417
|
)
|
|||
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Cash
flow from operations
|
11,306
|
35,836
|
|||||
|
Capital
expenditures - equipment
|
(155
|
)
|
(452
|
)
|
|||
|
Free
cash flow
|
$
|
11,151
|
$
|
35,384
|
|||