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): November 8,
2007
PRESTIGE
BRANDS HOLDINGS, INC.
(Exact
name of registrant as specified in its charter)
|
Delaware
|
001-32433
|
20-1297589
|
|
(State
or other jurisdiction
|
(Commission
File Number)
|
(IRS
Employer
|
|
of
incorporation)
|
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
November 8, 2007, Prestige Brands Holdings, Inc. (the “Registrant”) announced
financial results for the fiscal quarter and six months ended September 30,
2007. A copy of the press release announcing the Registrant’s earnings
results for the fiscal quarter and six months ended September 30, 2007 is
attached hereto as Exhibit 99.1 and incorporated herein by
reference.
The
information in this Form 8-K and Exhibit 99.1 attached hereto shall not be
deemed to be ‘‘filed’’ for purposes of Section 18 of the Securities Exchange Act
of 1934, as amended, or otherwise subject to the liabilities of that section,
unless the Registrant specifically states that the information is to be
considered “filed” under the Securities Exchange Act of 1934 or incorporates it
by reference into a filing under the Securities Act of 1933 or the Securities
Exchange Act of 1934.
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 November 8, 2007 announcing the Registrant’s financial results for the fiscal quarter and six months ended September 30, |
| 2007 (furnished only). | |
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: November 8, 2007 | PRESTIGE BRANDS HOLDINGS, INC. | ||
| By: | /s/ Peter J. Anderson | ||
| Name: | Peter J. Anderson | ||
| Title: | Chief
Financial Officer
|
||
EXHIBIT
INDEX
|
Exhibit
|
Description
|
| 99.1 | Press Release dated November 8, 2007 announcing the Registrant’s financial results for the fiscal quarter and six months ended September 30, |
| 2007 (furnished only). | |
Exhibit
99.1
Prestige
Brands Holdings, Inc. Reports Second Quarter & Six Months Fiscal 2008
Results
Irvington,
NY, November 8, 2007—Prestige Brands Holdings, Inc. (NYSE-PBH) today announced
results for the second quarter and first half of fiscal year 2008, which ended
on September 30, 2007.
Net
revenues for the second fiscal quarter ended September 30, 2007 were $87.3
million, 3% higher than net revenues of $84.6 million in the prior year
comparable period. Net revenues for the quarter would have been 4%
higher, and organic sales for the quarter would have been 2% higher than the
prior year quarter were it not for the industry-wide voluntary withdrawal of
infant cough/cold products in which the Company participated that affected
two
Little Remedies® products. During the quarter, the Company increased
its allowance for estimated returns by $1.1 million and its allowance for
obsolescence by $0.8 million to reflect the two withdrawn items.
Operating
income of $20.6 million was 15% lower than the prior year quarter operating
income of $24.1 million. The reduction in operating income is
primarily due to the impact of the Little Remedies withdrawal, as well as
increased legal expenditures related to arbitration with OraSure Technologies,
Inc., a supplier of Compound W Freeze Off®, and four separate legal actions
initiated by the Company involving infringements of its intellectual property
relative to its The Doctor’s® Night Guard™ products.
Net
income for the second fiscal quarter of $6.8 million, or $0.14 per share, was
below last fiscal year’s second quarter net income of $8.8 million, or $0.18 per
share. Excluding the effects of the voluntary Little Remedies
withdrawal, net income would have been $8.1 million, or $0.16 per
share.
First
Six Months of Fiscal 2008
Net
revenues for the first six months of fiscal 2008 were $165.9 million, an
increase of 3% over the prior year comparable period results of $160.5
million. Operating income of $43.7 million was 8% below the
comparable period’s results of $47.5 million. Net income of $15.1
million, or $0.30 per share, was 11% below the comparable period’s net income of
$17.0 million, or $0.34 per share.
Q2
and Six Month Results by Segment
Over-the-Counter
(OTC) Healthcare Products
Net
revenues of OTC healthcare products increased 8% to $50.0 million over the
comparable period’s results of $46.3 million. Excluding the impact of the
acquisition of Wartner® wart remover products in the second quarter of fiscal
2007 and the effects of the increased allowance for returns for the two Little
Remedies® products, OTC organic sales increased by 5%. Increases in
the segment were led by the successful introduction of new Murine™ Earigate™ and
Clear Eyes® eye care products.
For
the
six month period ended September 30, 2007, OTC net revenues were $92.4 million
compared to $85.9 million in the prior year comparable period, an increase
of
8%.
Household
Products
Net
revenues for the household products segment were $31.4 million, even with the
prior year comparable quarter. An increase in the Chore Boy® line of
household scrubbers offset a decline in sales of Spic and Span® household
cleaners. Revenues for Comet®, the segment’s largest brand, were even
with the prior year comparable period. The sales increase generated
from the successful introduction of Comet® SprayGel Mildew Stain Remover was
offset by inventory reductions at one of our key mass
merchandisers.
For
the
six month period ended September 30, 2007, net revenues for the household
products segment were $61.3 million, even with the prior year comparable
period.
Personal
Care Products
Net
revenues for the personal care products segment were $5.9 million, 16% lower
than the prior year comparable period results of $7.0 million. Cutex®
nail polish remover and Denorex® shampoo experienced sales decreases versus the
prior year period in line with expectations. Revenues of Prell®
shampoo were up slightly for the quarter.
For
the
first six months of fiscal 2008, net revenues were $12.2 million compared to
$13.3 million in the prior year comparable period.
Free
Cash Flow and Debt Repayment
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, and 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 quarter ended September 30, 2007 was $13.0
million, composed of operating cash flow of $13.1 million less capital
expenditures of $0.1 million. This compares to free cash flow of
$21.3 million generated in the prior year quarter. The decline in
free cash flow was driven by the year on year reduction in net income combined
with an increase in working capital versus the prior year comparable
period.
Our
continued strong absolute cash flow resulted in a debt pay down of $10.4 million
on our term loan during the second fiscal quarter. Total debt has
been reduced to $437.1 million at September 30, 2007.
Commentary
“Our
second quarter saw continued progress on the path to sustainable organic
growth,” said Mark Pettie, Chairman and CEO. “Were it not for the
industry-wide voluntary withdrawal affecting two of our Little Remedies®
products, our organic sales would have been 2% above the year ago comparable
period, aided by new product innovation in both our OTC and household
businesses. In addition, efforts toward cost of goods savings are
beginning to take effect and have already helped to shelter us from raw material
increases,” he said.
Conference
Call
The
Company will host a conference call to review its second quarter and six month
results on Thursday, November 8, 2007 at 8:30 am (ET). The toll free number
is
1-800-299-7635 within North America and 1-617-786-2901 outside North America.
The conference pass code is “prestige”. Telephonic replays will be available for
two weeks following the completion of the call and can be accessed at
1-888-286-8010 within North America, and at 1-617-801-6888 outside of North
America. The pass code is 72463596.
About
Prestige Brands Holdings, Inc.
Prestige
Brands markets and distributes brand name over-the-counter healthcare, personal
care and household products sold throughout the United States, Canada and
certain international markets. Key brands include Compound W(R) wart treatment,
Chloraseptic(R) sore throat relief products, New Skin(R) liquid bandage, Clear
Eyes(R) and Murine(R) eye care products, Little Remedies(R) pediatric
over-the-counter healthcare products, The Doctor's(R)NightGuard(TM), Cutex(R)
nail polish remover, Comet(R) and Spic and Span(R) household cleaners, and
other
well-recognized brands.
Forward
Looking Statements
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
(Unaudited)
|
Three
Months
Ended
September 30
|
Six
Months
Ended
September 30
|
|||||||||||||||
|
(In
thousands, except per share data)
|
2007
|
2006
|
2007
|
2006
|
||||||||||||
|
Revenues
|
||||||||||||||||
|
Net
sales
|
$ |
86,840
|
$ |
84,033
|
$ |
164,881
|
$ |
159,600
|
||||||||
|
Other
revenues
|
497
|
518
|
1,067
|
874
|
||||||||||||
|
Total
revenues
|
87,337
|
84,551
|
165,948
|
160,474
|
||||||||||||
|
Cost
of Sales
|
||||||||||||||||
|
Costs
of sales
|
42,770
|
41,259
|
80,092
|
77,584
|
||||||||||||
|
Gross
profit
|
44,567
|
43,292
|
85,856
|
82,890
|
||||||||||||
|
Operating
Expenses
|
||||||||||||||||
|
Advertising
and promotion
|
11,017
|
9,455
|
18,803
|
16,857
|
||||||||||||
|
General
and administrative
|
10,184
|
7,259
|
17,830
|
13,693
|
||||||||||||
|
Depreciation
|
129
|
219
|
253
|
439
|
||||||||||||
|
Amortization
of intangible assets
|
2,627
|
2,193
|
5,254
|
4,386
|
||||||||||||
|
Total
operating expenses
|
23,957
|
19,126
|
42,140
|
35,375
|
||||||||||||
|
Operating
income
|
20,610
|
24,166
|
43,716
|
47,515
|
||||||||||||
|
Other
income (expense)
|
||||||||||||||||
|
Interest
income
|
173
|
403
|
360
|
588
|
||||||||||||
|
Interest
expense
|
(9,768 | ) | (10,146 | ) | (19,642 | ) | (20,123 | ) | ||||||||
|
Total
other income (expense)
|
(9,595 | ) | (9,743 | ) | (19,282 | ) | (19,535 | ) | ||||||||
|
Income
before provision for
income
taxes
|
11,015
|
14,423
|
24,434
|
27,980
|
||||||||||||
|
Provision
for income taxes
|
4,186
|
5,639
|
9,285
|
10,940
|
||||||||||||
|
Net
income
|
$ |
6,829
|
$ |
8,784
|
$ |
15,149
|
$ |
17,040
|
||||||||
|
Basic
earnings per share
|
$ |
0.14
|
$ |
0.18
|
$ |
0.30
|
$ |
0.35
|
||||||||
|
Diluted
earnings per share
|
$ |
0.14
|
$ |
0.18
|
$ |
0.30
|
$ |
0.34
|
||||||||
|
Weighted
average shares outstanding:
Basic
|
49,710
|
49,451
|
49,686
|
49,389
|
||||||||||||
|
Diluted
|
50,046
|
49,994
|
50,042
|
49,991
|
||||||||||||
Prestige
Brands Holdings, Inc.
Consolidated
Balance Sheets
(Unaudited)
(In
thousands)
|
Assets
|
September
30, 2007
|
March
31, 2007
|
||||||
|
Current
assets
|
||||||||
|
Cash
and cash equivalents
|
$ |
8,799
|
$ |
13,758
|
||||
|
Accounts
receivable
|
46,512
|
35,167
|
||||||
|
Inventories
|
27,783
|
30,173
|
||||||
|
Deferred
income tax assets
|
3,337
|
2,735
|
||||||
|
Prepaid
expenses and other current assets
|
3,628
|
1,935
|
||||||
|
Total
current assets
|
90,059
|
83,768
|
||||||
|
Property
and equipment
|
1,391
|
1,449
|
||||||
|
Goodwill
|
308,915
|
310,947
|
||||||
|
Intangible
assets
|
651,903
|
657,157
|
||||||
|
Other
long-term assets
|
8,310
|
10,095
|
||||||
|
Total
Assets
|
$ |
1,060,578
|
$ |
1,063,416
|
||||
|
Liabilities
and Stockholders’ Equity
|
||||||||
|
Current
liabilities
|
||||||||
|
Accounts
payable
|
$ |
21,318
|
$ |
19,303
|
||||
|
Accrued
interest payable
|
7,556
|
7,552
|
||||||
|
Other
accrued liabilities
|
12,771
|
10,505
|
||||||
|
Current
portion of long-term debt
|
3,550
|
3,550
|
||||||
|
Total
current liabilities
|
45,195
|
40,910
|
||||||
|
Long-term
debt
|
433,563
|
459,800
|
||||||
|
Other
long-term liabilities
|
2,801
|
2,801
|
||||||
|
Deferred
income tax liabilities
|
117,609
|
114,571
|
||||||
|
Total
Liabilities
|
599,168
|
618,082
|
||||||
|
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
–
50,060
shares
|
501
|
501
|
||||||
|
Additional
paid-in capital
|
380,371
|
379,225
|
||||||
|
Treasury
stock, at cost – 57 shares at September 30, 2007
and
55 shares at March 31, 2007
|
(44 | ) | (40 | ) | ||||
|
Accumulated
other comprehensive income
|
98
|
313
|
||||||
|
Retained
earnings
|
80,484
|
65,335
|
||||||
|
Total
stockholders’ equity
|
461,410
|
445,334
|
||||||
|
Total
Liabilities and Stockholders’ Equity
|
$ |
1,060,578
|
$ |
1,063,416
|
||||
Prestige
Brands Holdings, Inc.
Consolidated
Statements of Cash Flows
(Unaudited)
|
Six
Months Ended September 30
|
||||||||
|
(In
thousands)
|
2007
|
2006
|
||||||
|
Operating
Activities
|
||||||||
|
Net
income
|
$ |
15,149
|
$ |
17,040
|
||||
|
Adjustments
to reconcile net income to net cash provided by operating
activities:
|
||||||||
|
Depreciation
and amortization
|
5,507
|
4,825
|
||||||
|
Deferred
income taxes
|
4,622
|
6,197
|
||||||
|
Amortization
of deferred financing costs
|
1,561
|
1,609
|
||||||
|
Stock-based
compensation
|
1,146
|
224
|
||||||
|
Changes
in operating assets and liabilities
|
||||||||
|
Accounts
receivable
|
(11,345 | ) |
2,595
|
|||||
|
Inventories
|
2,390
|
5,202
|
||||||
|
Prepaid
expenses and other current assets
|
(1,692 | ) | (1,047 | ) | ||||
|
Accounts
payable
|
1,884
|
4,494
|
||||||
|
Income
taxes payable
|
--
|
(1,731 | ) | |||||
|
Accrued
liabilities
|
2,270
|
3,326
|
||||||
|
Net
cash provided by operating activities
|
21,492
|
42,734
|
||||||
|
Investing
Activities
|
||||||||
|
Purchases
of equipment
|
(194 | ) | (313 | ) | ||||
|
Purchase
of business
|
(16 | ) | (31,242 | ) | ||||
|
Net
cash used for investing activities
|
(210 | ) | (31,555 | ) | ||||
|
Financing
Activities
|
||||||||
|
Repayment
of long-term debt
|
(26,237 | ) | (8,865 | ) | ||||
|
Purchase
of common stock for treasury
|
(4 | ) | (6 | ) | ||||
|
Net
cash used for financing activities
|
(26,241 | ) | (8,871 | ) | ||||
|
Increase
(decrease) in cash
|
(4,959 | ) |
2,308
|
|||||
|
Cash
- beginning of period
|
13,758
|
8,200
|
||||||
|
Cash
- end of period
|
$ |
8,799
|
$ |
10,508
|
||||
|
Interest
paid
|
$ |
18,078
|
$ |
18,306
|
||||
|
Income
taxes paid
|
$ |
5,664
|
$ |
6,287
|
||||
Consolidated
Segment Operations
(Unaudited)
|
Three
Months Ended September 30, 2007
|
||||||||||||||||
|
Over-the-Counter
|
Household
|
Personal
|
||||||||||||||
|
Healthcare
|
Cleaning
|
Care
|
Consolidated
|
|||||||||||||
|
Net
sales
|
$ |
50,003
|
30,925
|
$ |
5,912
|
$ |
86,840
|
|||||||||
|
Other
revenues
|
--
|
497
|
--
|
497
|
||||||||||||
|
Total
revenues
|
50,003
|
31,422
|
5,912
|
87,337
|
||||||||||||
|
Cost
of sales
|
19,688
|
19,587
|
3,495
|
42,770
|
||||||||||||
|
Gross
profit
|
30,315
|
11,835
|
2,417
|
44,567
|
||||||||||||
|
Advertising
and promotion
|
8,154
|
2,575
|
288
|
11,017
|
||||||||||||
|
Contribution
margin
|
$ |
22,161
|
$ |
9,260
|
$ |
2,129
|
33,550
|
|||||||||
|
Other
operating expenses
|
12,940
|
|||||||||||||||
|
Operating
income
|
20,610
|
|||||||||||||||
|
Other
(income) expense
|
9,595
|
|||||||||||||||
|
Provision
for income taxes
|
4,186
|
|||||||||||||||
|
Net
income
|
$ |
6,829
|
||||||||||||||
|
Six
Months Ended September 30, 2007
|
||||||||||||||||
|
Over-the-Counter
|
Household
|
Personal
|
||||||||||||||
|
Healthcare
|
Cleaning
|
Care
|
Consolidated
|
|||||||||||||
|
Net
sales
|
$ |
92,429
|
$ |
60,270
|
$ |
12,182
|
$ |
164,881
|
||||||||
|
Other
revenues
|
--
|
1,039
|
28
|
1,067
|
||||||||||||
|
Total
revenues
|
92,429
|
61,309
|
12,210
|
165,948
|
||||||||||||
|
Cost
of sales
|
35,074
|
37,980
|
7,038
|
80,092
|
||||||||||||
|
Gross
profit
|
57,355
|
23,329
|
5,172
|
85,856
|
||||||||||||
|
Advertising
and promotion
|
14,035
|
4,203
|
565
|
18,803
|
||||||||||||
|
Contribution
margin
|
$ |
43,320
|
$ |
19,126
|
$ |
4,607
|
67,053
|
|||||||||
|
Other
operating expenses
|
23,337
|
|||||||||||||||
|
Operating
income
|
43,716
|
|||||||||||||||
|
Other
(income) expense
|
19,282
|
|||||||||||||||
|
Provision
for income taxes
|
9,285
|
|||||||||||||||
|
Net
income
|
$ |
15,149
|
||||||||||||||
Prestige
Brands Holdings, Inc.
Consolidated
Segment Operations
(Unaudited)
|
Three
Months Ended September 30, 2006
|
||||||||||||||||
|
Over-the-Counter
Healthcare
|
Household
Cleaning
|
Personal
Care
|
Consolidated
|
|||||||||||||
|
Net
sales
|
$ |
46,255
|
$ |
30,732
|
$ |
7,046
|
$ |
84,033
|
||||||||
|
Other
revenues
|
--
|
518
|
--
|
518
|
||||||||||||
|
Total
revenues
|
46,255
|
31,250
|
7,046
|
84,551
|
||||||||||||
|
Cost
of sales
|
18,001
|
18,941
|
4,317
|
41,259
|
||||||||||||
|
Gross
profit
|
28,254
|
12,309
|
2,729
|
43,292
|
||||||||||||
|
Advertising
and promotion
|
7,058
|
2,020
|
377
|
9,455
|
||||||||||||
|
Contribution
margin
|
$ |
21,196
|
$ |
10,289
|
$ |
2,352
|
33,837
|
|||||||||
|
Other
operating expenses
|
9,671
|
|||||||||||||||
|
Operating
income
|
24,166
|
|||||||||||||||
|
Other
(income) expense
|
9,743
|
|||||||||||||||
|
Provision
for income taxes
|
5,639
|
|||||||||||||||
|
Net
income
|
$ |
8,784
|
||||||||||||||
|
Six
Months Ended September 30, 2006
|
||||||||||||||||
|
Over-the-Counter
Healthcare
|
Household
Cleaning
|
Personal
Care
|
Consolidated
|
|||||||||||||
|
Net
sales
|
$ |
85,853
|
$ |
60,470
|
$ |
13,277
|
$ |
159,600
|
||||||||
|
Other
revenues
|
--
|
874
|
--
|
874
|
||||||||||||
|
Total
revenues
|
85,853
|
61,344
|
13,277
|
160,474
|
||||||||||||
|
Cost
of sales
|
32,398
|
37,095
|
8,091
|
77,584
|
||||||||||||
|
Gross
profit
|
53,455
|
24,249
|
5,186
|
82,890
|
||||||||||||
|
Advertising
and promotion
|
12,483
|
3,710
|
664
|
16,857
|
||||||||||||
|
Contribution
margin
|
$ |
40,972
|
$ |
20,539
|
$ |
4,522
|
66,033
|
|||||||||
|
Other
operating expenses
|
18,518
|
|||||||||||||||
|
Operating
income
|
47,515
|
|||||||||||||||
|
Other
(income) expense
|
19,535
|
|||||||||||||||
|
Provision
for income taxes
|
10,940
|
|||||||||||||||
|
Net
income
|
$ |
17,040
|
||||||||||||||