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
16, 2006
PRESTIGE
BRANDS HOLDINGS, INC.
|
Delaware
|
001-32433
|
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 240.13e-4(c))
Item
2.02 Results of Operations and Financial Condition.
On
May
16, 2006, Prestige Brands Holdings, Inc. (the ‘‘Registrant’’) announced
financial results for the fiscal quarter and year ended March 31, 2006. A copy
of the press release announcing the Registrant’s earnings results for the fiscal
quarter and year ended March 31, 2006 is attached hereto as Exhibit 99.1 and
incorporated herein by reference.
The
information in this Form 8-K and the Exhibit attached hereto shall not be deemed
‘‘filed’’ for purposes of Section 18 of the Securities Exchange Act of 1934, as
amended, nor shall it be deemed incorporated by reference in any filing under
the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934,
except as shall be expressly set forth by specific reference in such
filing.
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
| (d) |
Exhibits.
|
|
Exhibit
|
|
Description
|
|
99.1
|
|
Press
Release dated May 16, 2006, with respect to the Registrant’s financial
results for the fiscal quarter and year ended March 31, 2006 (furnished
only).
|
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: May 16, 2006 | PRESTIGE BRANDS HOLDINGS, INC. | |
| By: | /s/ Peter J. Anderson | |
| Name: | Peter J. Anderson | |
| Title: | Chief Financial Officer |
3
EXHIBIT
INDEX
|
Exhibit
|
|
Description
|
|
99.1
|
|
Press
Release dated May 16, 2006, with respect to the Registrant’s financial
results for the fiscal quarter and year ended March 31, 2006 (furnished
only).
|
4
[PRESTIGE
BRANDS HOLDINGS, INC. LOGO]
Prestige
Brands Holdings, Inc. Reports Results for Fiscal Fourth Quarter and
Year
Ended March 31, 2006; Updates Expectations
Irvington,
NY, May 16, 2006 --
Prestige
Brands Holdings, Inc. (NYSE-PBH) today announced results for the fourth quarter
and fiscal year ended March 31, 2006. The Company also commented on expected
revenue and profit growth. The highlights of the announcement are:
| · |
Fourth
quarter revenues increased 3.5% over prior year comparable quarter
to
$80.0 million.
|
| · |
Fourth
quarter adjusted net income was $12.1 million or $0.24 per diluted
share,
before a non-cash asset impairment charge & non-cash income tax
expense.
|
| · |
Fourth
quarter reported net income was $3.6 million or $0.07 per diluted
share
compared to a net loss of $1.7 million in the prior
year.
|
| · |
Free
cash flow for fourth quarter was $17.9 million, an increase of 64%
over
the same period last year.
|
| · |
Fiscal
year 2006 revenues increased 2.6% over fiscal
2005.
|
| · |
Fiscal
year 2006 adjusted net income was $34.8 million or $0.70 per diluted
share
before non-cash asset impairment charge & non-cash income tax expense.
|
| · |
Fiscal
year 2006 reported net income was $26.3 million or $0.53 per diluted
share
compared to net income of $10.2 million for Fiscal Year
2005.
|
| · |
Free
cash flow for fiscal year 2006 increased by 5% over prior year to
$53.4
million.
|
| · |
Management
expects revenue growth in the range of 3-4% over the long term before
the
impact of acquisitions.
|
Fourth
Quarter, Fiscal Year 2006
For
the
fourth quarter of fiscal year 2006, the Company reported revenues of $80.0
million, up 3.5% versus the same period a year ago. The recent acquisitions
of
Chore Boy® and The Doctor’s® brands, which occurred in the third quarter of
fiscal 2006, accounted for $7.5 million of
the
fourth quarter revenue growth. Gross profit in 2006 increased by $1.2 million,
or 2.8%, primarily due to the increase in revenues. Gross profit as a percentage
of sales declined from 55.1% to 54.8% primarily as a result of increased sales
of the lower margin Household Cleaning segment products.
Operating
income of $20.1 million for the fourth quarter was $9.5 million, or 32% below
the comparable period last year primarily due to non-cash impairment charges
of
$7.4 million related to certain intangible assets and $1.9 million related
to
goodwill. These impairment charges resulted from the Company’s assessment of the
carrying value of certain trademarks and related goodwill within the Company’s
Personal Care segment which has been performing below expectations. Excluding
the impairment charges and a Dental Concepts inventory step up expense, adjusted
operating income would have been $29.5 million which was even with the
comparable period last year. The increase in sales and gross profit during
the
quarter was offset by increased advertising and promotion (“A&P”) and
general and administrative (“G&A”) expenses. The increase in A&P
expenses was primarily for increased media spending, while the G&A increase
was primarily due to increased public company expenses, largely related to
the
completion of the Company’s Sarbanes-Oxley Section 404 compliance
testing.
Net
income for the three months ended March 31, 2006 was $3.6 million, or $0.07
per
diluted share, compared to a net loss of $1.7 million for the same period last
year. In addition to the impairment charges discussed above, as a result of
the
completion of a state tax nexus study, the Company increased the effective
state
tax rate applied in computing its deferred tax liability. As a result the
Company recorded $2.3 million of additional deferred tax expense in the quarter.
Since this charge related only to deferred taxes, the expense had no impact
on
the Company’s fiscal year 2006 cash flows.
Excluding
the charges related to the impairment to intangible assets, the additional
deferred state income tax expense, and the Dental Concepts inventory step up
expense, net income for the three months ended March 31, 2006 would have been
$12.1 million or $0.24 per diluted share.
Revenues
by Segment for Fourth Quarter Ended March 31, 2006
The
Over-The-Counter segment’s revenues of $44.7 million were 2.6% below those of
the same period in the previous year, when revenues were $45.9 million. Without
The Doctor’s® brand, acquired as a part of the Dental Concepts acquisition last
fall, revenues for this segment would have declined by 11.6% for the three
months ended March 31, 2006 versus the comparable period last year. This
resulted primarily from declines in sales of Compound W® wart remover, and of
Chloraseptic® sore throat products, both of which experienced particularly
strong sales in the comparable prior year period.
The
Company noted strong performance in its Household Cleaning segment, with fourth
quarter revenues of $28.9 million, an increase of 21.5% over revenues of $23.8
million in the comparable period in fiscal 2005. The Comet® brand experienced a
gain of 10% versus the same period a year ago. This growth was largely
attributable to gains on Comet® Cream Soft Cleanser products. In addition,
revenues were modestly enhanced by the Company’s licensing agreement with The
Procter & Gamble Company to market the Comet brand in Eastern Europe.
The
Chore
Boy® brand, acquired in the third fiscal quarter of 2006, also contributed to
segment growth. Excluding the impact of the Chore Boy acquisition, revenues
for
this segment increased 7.3%.
Net
revenues for the Personal Care segment were $6.3 million, or 16.2% below the
previous year’s revenues of $7.6 million, with the decline primarily related to
a decline in sales of the Denorex® dandruff shampoo brand.
Fiscal
Year 2006
The
Company reported total revenues of $296.7 million for the fiscal year ended
March 31, 2006, an increase of 2.6% over fiscal year 2005 revenues of $289.1
million. The increase in sales resulted from sales increases in the Household
Cleaning segment and the acquisitions of Chore Boy® and Dental Concepts,
partially offset by declines in the Over-The-Counter and Personal Care Segments.
The Chore Boy and Dental Concepts brands contributed $11.6 million in revenues.
The
Company also reported net income of $26.3 million, up $16.1 million versus
net
income of $10.2 million in fiscal year 2005, an increase of 157%. Earnings
per
share on a fully diluted basis were $0.53 for the twelve months ended March
31,
2006. Excluding the impact of the asset impairment, deferred tax charges and
the
Dental Concepts inventory step-up expenses, net income would have been $34.8
million or $0.70 per diluted share.
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. Free cash flow is presented in this
news release because management believes that it is a commonly used measure
of
liquidity, indicative of cash available for debt repayment and acquisitions.
The
Company defines “free cash flow” as operating cash flow less capital
expenditures.
The
Company’s free cash flow for the fourth quarter ended March 31, 2006 was $17.9
million with operating cash flows of $18.0 million less capital expenditures
of
$0.1 million. For the full fiscal year ended March 31, 2006, free cash flow
was
$53.4 million with operating cash flows of $53.9 million less capital
expenditures of $0.5 million. The Company’s free cash flow was higher than net
income primarily due to the non-cash charges related to the intangible and
goodwill impairment and deferred income taxes combined with the Company’s
long-term tax shield related to amortization of intangible assets and goodwill,
net operating loss carry forwards, certain book interest expenses which are
non-cash, and relatively low capital expenditures.
Expectations
Long
term, the Company expects revenue growth of 3-4%, before the benefit of
acquisitions, with net income expected to grow at a somewhat higher level.
Fiscal year 2007 revenue growth rate should exceed the Company’s long term
expectation due to a full year of revenue from the acquisitions
of Chore Boy® and Dental Concepts. However, the Company anticipates net income
will grow below the expected revenue growth rate in Fiscal year 2007 due to
continuing cost-related margin pressures and increased infrastructure costs
which will position the Company for future growth.
The
Company expects its free cash flow will again surpass book net income in fiscal
year 2007, again primarily driven by the tax benefits of accelerated
amortization of intangible assets plus the continuing effects of certain
non-cash interest expenses.
“We
look
forward to executing our planned initiatives for fiscal 2007, strengthening
our
fundamental strategies, and enhancing our new product pipeline,” said Frank
Palantoni, President and Chief Executive Officer. ”Six new items, representing
four brands in our OTC products segment have recently been introduced to the
trade. These include Clear eyes® Triple Action for multi-symptom relief, three
Murine® homeopathic eye care products, Dermoplast ® Poison Ivy Treatment, and a
Little Remedies® anti colic product.”
About
Prestige Brands Holdings, Inc.
Prestige
Brands Holdings, through its wholly-owned subsidiaries, is a marketer and
distributor of brand name over-the-counter drug, household cleaning, and
personal care products sold throughout the United States and Canada. Key brands
include Compound W® wart treatment, 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 cleaning products, and other well-known
brands.
Note:
This
news release contains “forward-looking statements” within the meaning of the
federal securities laws and is 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. The
“forward-looking statements” include, without limitation, statements regarding
the outlook for Prestige Brands Holdings’ market and the demand for its
products, earnings per share, future cash flows from operations, future revenues
and margin requirement and expansion, the success of new product introductions,
growth in costs and expenses, and the impact of acquisitions, divestitures,
restructurings and other unusual items, including Prestige Brands Holdings’
ability to integrate and obtain the anticipated results and synergies from
its
acquisitions. These projections and statements are based on management’s
estimates and assumptions with respect to future events and financial
performance and are believed to be reasonable, though are inherently uncertain
and difficult to predict. Actual results could differ materially from those
projected as a result of certain 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 and other reports filed with the Securities and Exchange
Commission.
Contact:
Dean Siegal
914-524-6819
Prestige
Brands Holdings, Inc.
Consolidated
Statements of Operations
(In
thousands, except per share data)
|
Three
Months Ended
March
31
|
Fiscal
Year Ended
March
31
|
||||||||||||
|
2006
|
2005
|
2006
|
2005
|
||||||||||
|
Revenues
|
|||||||||||||
|
Net
sales
|
$
|
79,662
|
$
|
77,288
|
$
|
296,239
|
$
|
288,918
|
|||||
|
Other
revenues
|
352
|
25
|
429
|
151
|
|||||||||
|
Total
revenues
|
80,014
|
77,313
|
296,668
|
289,069
|
|||||||||
|
Cost
of Sales
|
|||||||||||||
|
Cost
of sales
|
36,206
|
34,689
|
139,430
|
139,009
|
|||||||||
|
Gross
profit
|
43,808
|
42,624
|
157,238
|
150,060
|
|||||||||
|
Operating
Expenses
|
|||||||||||||
|
Advertising
and promotion
|
5,775
|
5,295
|
32,082
|
29,697
|
|||||||||
|
General
and administrative
|
5,954
|
5,085
|
21,136
|
20,198
|
|||||||||
|
Depreciation
|
263
|
504
|
1,758
|
1,899
|
|||||||||
|
Impairment
of intangible assets
|
7,425
|
-
|
7,425
|
-
|
|||||||||
|
Impairment
of goodwill
|
1,892
|
-
|
1,892
|
-
|
|||||||||
|
Amortization
of intangible assets
|
2,431
|
2,148
|
9,041
|
7,901
|
|||||||||
|
Total
operating expenses
|
23,740
|
13,032
|
73,334
|
59,695
|
|||||||||
|
Operating
income
|
20,068
|
29,592
|
83,904
|
90,365
|
|||||||||
|
Other
income (expense)
|
|||||||||||||
|
Interest
income
|
117
|
236
|
568
|
371
|
|||||||||
|
Interest
expense
|
(9,756
|
)
|
(11,085
|
)
|
(36,914
|
)
|
(45,097
|
)
|
|||||
|
Loss
on disposal of equipment
|
-
|
(9
|
)
|
-
|
(9
|
)
|
|||||||
|
Loss
on extinguishment of debt
|
-
|
(19,287
|
)
|
-
|
(26,854
|
)
|
|||||||
|
Total
other income (expense)
|
(9,639
|
)
|
(30,145
|
)
|
(36,346
|
)
|
(71,589
|
)
|
|||||
|
Income
(loss) before income taxes
|
10,429
|
(553
|
)
|
47,558
|
18,776
|
||||||||
|
Provision
for income taxes
|
(6,800
|
)
|
(1,164
|
)
|
(21,281
|
)
|
(8,556
|
)
|
|||||
|
Net
income (loss)
|
3,629
|
(1,717
|
)
|
26,277
|
10,220
|
||||||||
|
Cumulative
preferred dividends on Senior Preferred and Class B Preferred
Units
|
-
|
(14,054
|
)
|
-
|
(25,395
|
)
|
|||||||
|
Net
income (loss) available to members and common stockholders
|
$
|
3,629
|
$
|
(15,771
|
)
|
$
|
26,277
|
$
|
(15,175
|
)
|
|||
|
Net
income (loss) per common share
|
|||||||||||||
|
Basic
|
$
|
0.07
|
$
|
(0.41
|
)
|
$
|
0.54
|
$
|
(0.55
|
)
|
|||
|
Diluted
|
$
|
0.07
|
$
|
(0.41
|
)
|
$
|
0.53
|
$
|
(0.55
|
)
|
|||
|
Weighted
average shares outstanding:
Basic
|
49,077
|
38,074
|
48,907
|
27,546
|
|||||||||
|
Diluted
|
50,008
|
38,074
|
50,008
|
27,546
|
|||||||||
Prestige
Brands Holdings, Inc.
Reconciliation
to Adjusted Operating Income and Net Income
(In
thousands, except per share data)
|
Three
Months Ended
March
31
|
Fiscal
Year Ended
March
31
|
||||||||||||
|
Adjusted
Operating Income
|
2006
|
2005
|
2006
|
2005
|
|||||||||
|
Operating
Income
|
$
|
20,068
|
$
|
29,592
|
$
|
83,904
|
$
|
90,365
|
|||||
|
Charges
due to inventory step-up
|
149
|
-
|
248
|
5,334
|
|||||||||
|
Impairment
of goodwill and intangible assets
|
9,317
|
-
|
9,317
|
-
|
|||||||||
|
Adjusted
Operating Income
|
$
|
29,534
|
$
|
29,592
|
$
|
93,469
|
$
|
95,699
|
|||||
|
Three
Months Ended
March
31
|
Fiscal
Year Ended
March
31
|
||||||||||||
|
Reconciliation
to Adjusted Net Income
|
2006
|
2005
|
2006
|
2005
|
|||||||||
|
Income
(loss) before income taxes
|
$
|
10,429
|
$
|
(553
|
)
|
$
|
47,558
|
$
|
18,776
|
||||
|
Loss
on extinguishment of debt
|
-
|
19,287
|
-
|
26,854
|
|||||||||
|
Charges
due to inventory step-up
|
149
|
-
|
248
|
5,334
|
|||||||||
|
Impairment
of goodwill and intangible assets
|
9,317
|
-
|
9,317
|
-
|
|||||||||
|
Other
non-recurring charges
|
-
|
-
|
-
|
629
|
|||||||||
|
Adjusted
income before income taxes
|
19,895
|
18,734
|
57,123
|
51,593
|
|||||||||
|
Provision
for income taxes at 39%
|
(7,759
|
)
|
(7,306
|
)
|
(22,278
|
)
|
(20,121
|
)
|
|||||
|
Adjusted
Net Income
|
$
|
12,136
|
$
|
11,428
|
$
|
34,845
|
$
|
31,472
|
|||||
|
Net
income (loss) per common share
|
|||||||||||||
|
Basic
|
$
|
0.25
|
$
|
0.71
|
|||||||||
|
Diluted
|
$
|
0.24
|
$
|
0.70
|
|||||||||
|
Weighted
average shares outstanding:
Basic
|
49,077
|
48,907
|
|||||||||||
|
Diluted
|
50,008
|
50,008
|
|||||||||||