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 5,
2010
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 February 5, 2010, the Registrant announced financial results for the fiscal
quarter and nine months ended December 31, 2009. A copy of the press
release announcing the Registrant’s earnings results for the fiscal quarter and
nine months ended December 31, 2009 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, as amended, 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.
|
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: | February 5, 2010 | 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 February 5, 2010 announcing the Registrant’s financial results for the fiscal quarter and nine months ended December 31, 2009 (furnished only). |
EXHIBIT 99.1
Prestige
Brands Holdings, Inc. Reports Fiscal 2010 Third Quarter &
Nine Month Results
Q3
Earnings per Share From Continuing Operations $0.21 vs. $0.15 Last Year;
Revenues Slightly Down
Irvington,
NY, February 5, 2010—Prestige Brands Holdings, Inc. (NYSE-PBH) today announced
results for the third fiscal quarter and nine months ending December 31,
2009.
Third
Quarter
Net
revenues from continuing operations for the third fiscal quarter ended December
31, 2009 were $75.4 million, $2.6 million or 3% below last year’s results of
$78.0 million. Revenues of the divested Denorex®, Prell® and Zincon® shampoo
brands in October, 2009, are reflected in discontinued operations for both the
current year and the prior year comparable period.
Operating
income for the third fiscal quarter was $23.7 million, $4.2 million or 22%
greater than last year’s operating income of $19.5 million. The
increase in operating income resulted from decreases in advertising and
promotional (A&P) expenditures when compared to the higher levels during the
prior year comparable period that were related to last year’s introductory
spending levels to support Allergen Block products, and general and
administrative (G&A) expenses. The reduction in G&A expense
when compared to the prior year comparable period was primarily due to decreased
legal, salary expenses and currency valuation expenses.
Net
income from continuing operations for the third quarter ended December 31, 2009
was $10.3 million, $2.6 million or 34% greater than last year’s net income from
continuing operations of $7.7 million. Earnings per share from
continuing operations were $0.21 compared to $0.15 in the prior year comparable
period.
Commenting
on the results of the quarter, Matthew Mannelly, President and CEO said, “We are
pleased with our improved profitability and continue to work to drive revenue in
this challenging economy. We are increasing our focus on supporting
our core brands.
1
This
quarter, we are particularly pleased with the performance on our core brands,
Chloraseptic®, Little Remedies®, Clear Eyes® and New-Skin®,” he
said.
Results
by Segment
Over-The-Counter
(OTC) Healthcare Products
Net
revenues for the OTC segment in the fiscal third quarter were $46.2 million,
$1.4 million or 3% below the prior year comparable period. Increases in sales of
the Chloraseptic®, Clear Eyes® and Little Remedies® brands were offset by
declines in the two Allergen Block products and the Murine® Ear
line.
Household
Products
Net
revenues for the household products segment in the third fiscal quarter were
$27.3 million, $900 thousand, or 3% less than last year. Sales increases on the
Spic and Span® and Chore Boy® lines were offset by a decline for
Comet®.
Personal
Care Products
From this
quarter forward, the results of this segment will exclude sales from the three
shampoo brands divested in October, 2009, which are now reflected in
discontinued operations. Net revenues from continuing operations for
this segment were $2.0 million, $200 thousand or 10% below the prior year
comparable period. The decline was primarily due to decreased sales of
Cutex®.
Year-To-Date
Results
For the
nine month period ending December 31, 2009, total revenues from continuing
operations were $230.6 million, 2% lower than the prior period results of $234.5
million. Operating income from continuing operations of $63.5 million was 6%
greater than the prior year comparable results of $60.0 million, largely as a
result of reduced advertising and promotion expenses when compared with the
prior year period. Net income from continuing operations for the nine month
period was $28.0 million, an increase of $4.7 million over the prior year
comparable period’s results of $23.3 million.
2
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. 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 third quarter was $10.4 million, compared to
$16.4 million in the prior year comparable quarter. The decrease in
free cash flow is primarily a result of an increase in working capital partially
offset by an increase in deferred income taxes. Free cash flow is
comprised of operating cash flow of $10.6 million less capital expenditures of
$170,000. This compares to the prior year comparable quarter’s operating cash
flow of $16.7 million, less capital expenditures of $288,000. The free cash flow
generated during the quarter ended December 31, 2009 combined with the funds
generated from the divestiture of the three shampoo brands during the quarter
allowed us to pay down $19.0 million on our term loan during the quarter. At
December 31, 2009, total debt was reduced to $319.3 million.
Conference
Call
The
Company will host a conference call to review its third quarter fiscal 2010
results on Friday, February 5, 2010 at 8:30am (EST). The toll free dial-in
number is 866-277-1181. International callers may dial 617-597-5358. The
conference pass code is “prestige”. We will have a live internet webcast of the
call, as well as an archived replay which can be accessed from the Investor
Relations page of www.prestigebrandsinc.com.
The archived replay will be available for two weeks following completion of the
call. The dial-in numbers are 888-286-8010 (domestic) and 617-801-6888
(international). The pass code for the replay only is 65721192.
3
About
Prestige Brands Holdings, Inc.
Located
in Irvington, NY, Prestige Brands Holdings, Inc. is a marketer and distributor
of brand name over-the-counter healthcare products, household products and
personal care products sold throughout the U.S., Canada, and certain
international markets. Key brands include Chloraseptic® sore throat treatment,
Compound W® wart remover, New-Skin® liquid bandage, Clear Eyes® and Murine® eye
and ear 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.
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 economic outlook for the Company and the demand for its products and future
cash flows from operations. These 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 reports
filed with the Securities and Exchange Commission.
Contact:
Dean Siegal
914-524-6819
4
Consolidated
Statements of Operations (Unaudited)
|
Three
Months Ended December 31
|
Nine
Months Ended December 31
|
|||||||||||||||
|
(In
thousands, except share data)
|
2009
|
2008
|
2009
|
2008
|
||||||||||||
|
Revenues
|
||||||||||||||||
|
Net
sales
|
$ | 74,997 | $ | 77,345 | $ | 229,130 | $ | 232,582 | ||||||||
|
Other
revenues
|
451 | 621 | 1,511 | 1,921 | ||||||||||||
|
Total
revenues
|
75,448 | 77,966 | 230,641 | 234,503 | ||||||||||||
|
Cost
of Sales
|
||||||||||||||||
|
Cost
of sales
|
35,641 | 36,480 | 108,670 | 109,789 | ||||||||||||
|
Gross
profit
|
39,807 | 41,486 | 121,971 | 124,714 | ||||||||||||
|
Operating
Expenses
|
||||||||||||||||
|
Advertising
and promotion
|
6,099 | 11,349 | 24,645 | 32,129 | ||||||||||||
|
General
and administrative
|
7,411 | 8,311 | 26,088 | 25,647 | ||||||||||||
|
Depreciation
and amortization
|
2,596 | 2,311 | 7,781 | 6,926 | ||||||||||||
|
Total
operating expenses
|
16,106 | 21,971 | 58,514 | 64,702 | ||||||||||||
|
Operating
income
|
23,701 | 19,515 | 63,457 | 60,012 | ||||||||||||
|
Other
(income) expense
|
||||||||||||||||
|
Interest
income
|
- | (14 | ) | - | (143 | ) | ||||||||||
|
Interest
expense
|
5,558 | 7,065 | 16,853 | 22,656 | ||||||||||||
|
Total
other expense
|
5,558 | 7,051 | 16,853 | 22,513 | ||||||||||||
|
Income
from continuing operations before income taxes
|
18,143 | 12,464 | 46,604 | 37,499 | ||||||||||||
|
Provision
for income taxes
|
7,807 | 4,724 | 18,594 | 14,212 | ||||||||||||
|
Income
from continuing operations
|
10,336 | 7,740 | 28,010 | 23,287 | ||||||||||||
|
Discontinued
Operations
|
||||||||||||||||
|
Income
from discontinued operations, net of income tax
|
87 | 278 | 661 | 1,034 | ||||||||||||
|
Gain
on sale of discontinued operations, net of income tax
|
157 | - | 157 | - | ||||||||||||
|
Net
income
|
$ | 10,580 | $ | 8,018 | $ | 28,828 | $ | 24,321 | ||||||||
|
Basic
earnings per share:
|
||||||||||||||||
|
Income
from continuing operations
|
$ | 0.21 | $ | 0.15 | $ | 0.56 | $ | 0.47 | ||||||||
|
Net
income
|
$ | 0.21 | $ | 0.16 | $ | 0.58 | $ | 0.49 | ||||||||
|
Diluted
earnings per share:
|
||||||||||||||||
|
Income
from continuing operations
|
$ | 0.21 | $ | 0.15 | $ | 0.56 | $ | 0.47 | ||||||||
|
Net
income
|
$ | 0.21 | $ | 0.16 | $ | 0.58 | $ | 0.49 | ||||||||
|
Weighted
average shares outstanding:
|
||||||||||||||||
|
Basic
|
50,030 | 49,960 | 50,008 | 49,921 | ||||||||||||
|
Diluted
|
50,074 | 50,040 | 50,078 | 50,038 | ||||||||||||
5
Prestige
Brands Holdings, Inc.
Consolidated
Balance Sheets (Unaudited)
|
(In
thousands)
Assets
|
December
31, 2009
|
March
31,
2009
|
||||||
|
Current
assets
|
||||||||
|
Cash
and cash equivalents
|
$ | 34,262 | $ | 35,181 | ||||
|
Accounts
receivable
|
30,618 | 36,025 | ||||||
|
Inventories
|
34,092 | 25,939 | ||||||
|
Deferred
income tax assets
|
5,045 | 4,022 | ||||||
|
Prepaid
expenses and other current assets
|
2,022 | 1,358 | ||||||
|
Current
assets of discontinued operations
|
- | 1,038 | ||||||
|
Total
current assets
|
106,039 | 103,563 | ||||||
|
Property
and equipment
|
1,297 | 1,367 | ||||||
|
Goodwill
|
114,240 | 114,240 | ||||||
|
Intangible
assets
|
561,828 | 569,137 | ||||||
|
Other
long-term assets
|
3,170 | 4,602 | ||||||
|
Long-term
assets of discontinued operations
|
- | 8,472 | ||||||
|
Total
Assets
|
$ | 786,574 | $ | 801,381 | ||||
|
Liabilities
and Stockholders’ Equity
|
||||||||
|
Current
liabilities
|
||||||||
|
Accounts
payable
|
$ | 16,904 | $ | 15,898 | ||||
|
Accrued
interest payable
|
2,446 | 5,371 | ||||||
|
Other
accrued liabilities
|
13,258 | 9,407 | ||||||
|
Current
portion of long-term debt
|
3,550 | 3,550 | ||||||
|
Total
current liabilities
|
36,158 | 34,226 | ||||||
|
Long-term
debt
|
315,787 | 374,787 | ||||||
|
Deferred
income tax liabilities
|
109,776 | 97,983 | ||||||
|
Total
Liabilities
|
461,721 | 506,996 | ||||||
|
Commitments
and Contingencies – Note 16
|
||||||||
|
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 - 50,154 shares at December
31, 2009 and 50,060 shares at March 31, 2009
|
502 | 501 | ||||||
|
Additional
paid-in capital
|
383,600 | 382,803 | ||||||
|
Treasury
stock, at cost – 124 shares at December 31, 2009
and
March 31, 2009
|
(63 | ) | (63 | ) | ||||
|
Accumulated
other comprehensive loss
|
(492 | ) | (1,334 | ) | ||||
|
Accumulated
deficit
|
(58,694 | ) | (87,522 | ) | ||||
|
Total
Stockholders’ Equity
|
324,853 | 294,385 | ||||||
|
Total
Liabilities and Stockholders’ Equity
|
$ | 786,574 | $ | 801,381 | ||||
6
Prestige
Brands Holdings, Inc.
Consolidated
Statements of Cash Flows
(Unaudited)
|
Nine
Months Ended December 31
|
||||||||
|
(In
thousands)
|
2009
|
2008
|
||||||
|
Operating
Activities
|
||||||||
|
Net
income
|
$ | 28,828 | $ | 24,321 | ||||
|
Adjustments
to reconcile net income to net cash provided by operating
activities:
|
||||||||
|
Depreciation
and amortization
|
8,679 | 8,273 | ||||||
|
Gain
on sale of discontinued operations
|
(253 | ) | - | |||||
|
Deferred
income taxes
|
10,254 | 7,393 | ||||||
|
Amortization
of deferred financing costs
|
1,432 | 1,696 | ||||||
|
Stock-based
compensation
|
1,658 | 2,248 | ||||||
|
Changes
in operating assets and liabilities
|
||||||||
|
Accounts
receivable
|
6,407 | 9,588 | ||||||
|
Inventories
|
(8,281 | ) | 945 | |||||
|
Inventories
held for sale
|
- | - | ||||||
|
Prepaid
expenses and other current assets
|
(664 | ) | (527 | ) | ||||
|
Accounts
payable
|
1,006 | (2,450 | ) | |||||
|
Accrued
liabilities
|
1,424 | 1,860 | ||||||
|
Net
cash provided by operating activities
|
50,490 | 53,347 | ||||||
|
Investing
Activities
|
||||||||
|
Purchases
of equipment
|
(402 | ) | (397 | ) | ||||
|
Proceeds
from sale of discontinued operations
|
7,993 | - | ||||||
|
Business
acquisition purchase price adjustments
|
- | (4,191 | ) | |||||
|
Net
cash provided by (used for) investing activities
|
7,591 | (4,588 | ) | |||||
|
Financing
Activities
|
||||||||
|
Repayment
of long-term debt
|
(59,000 | ) | (26,887 | ) | ||||
|
Purchase
of common stock for treasury
|
- | (16 | ) | |||||
|
Net
cash used for financing activities
|
(59,000 | ) | (26,903 | ) | ||||
|
Increase
(Decrease) in cash
|
(919 | ) | 21,856 | |||||
|
Cash
- beginning of period
|
35,181 | 6,078 | ||||||
|
Cash
- end of period
|
$ | 34,262 | $ | 27,934 | ||||
|
Interest
paid
|
$ | 18,345 | $ | 24,276 | ||||
|
Income
taxes paid
|
$ | 9,820 | $ | 7,251 | ||||
7
Prestige
Brands Holdings, Inc.
Notes
to Consolidated Financial Statements
Business
Segments
|
Three
Months Ended December 31, 2009
|
||||||||||||||||
|
Over-the-Counter
|
Household
|
Personal
|
||||||||||||||
|
Healthcare
|
Cleaning
|
Care
|
Consolidated
|
|||||||||||||
|
(In
thousands)
|
||||||||||||||||
|
Net
sales
|
$ | 46,160 | $ | 26,828 | $ | 2,009 | $ | 74,997 | ||||||||
|
Other
revenues
|
9 | 437 | 5 | 451 | ||||||||||||
|
Total
revenues
|
46,169 | 27,265 | 2,014 | 75,448 | ||||||||||||
|
Cost
of sales
|
16,919 | 17,481 | 1,241 | 35,641 | ||||||||||||
|
Gross
profit
|
29,250 | 9,784 | 773 | 39,807 | ||||||||||||
|
Advertising
and promotion
|
5,146 | 877 | 76 | 6,099 | ||||||||||||
|
Contribution
margin
|
$ | 24,104 | $ | 8,907 | $ | 697 | 33,708 | |||||||||
|
Other
operating expenses
|
10,007 | |||||||||||||||
|
Operating
income
|
23,701 | |||||||||||||||
|
Other
expense
|
5,558 | |||||||||||||||
|
Provision
for income taxes
|
7,807 | |||||||||||||||
|
Income
from continuing operations
|
10,336 | |||||||||||||||
|
Income
from discontinued operations, net of income tax
|
87 | |||||||||||||||
| Gain on sale of assets, net of income tax | 157 | |||||||||||||||
|
Net
income
|
$ | 10,580 | ||||||||||||||
8
|
Nine
Months Ended December 31, 2009
|
||||||||||||||||
|
Over-the-Counter
|
Household
|
Personal
|
||||||||||||||
|
Healthcare
|
Cleaning
|
Care
|
Consolidated
|
|||||||||||||
|
(In
thousands)
|
||||||||||||||||
|
Net
sales
|
$ | 137,800 | $ | 82,271 | $ | 9,059 | $ | 229,130 | ||||||||
|
Other
revenues
|
29 | 1,454 | 28 | 1,511 | ||||||||||||
|
Total
revenues
|
137,829 | 83,725 | 9,087 | 230,641 | ||||||||||||
|
Cost
of sales
|
49,664 | 53,765 | 5,241 | 108,670 | ||||||||||||
|
Gross
profit
|
88,165 | 29,960 | 3,846 | 121,971 | ||||||||||||
|
Advertising
and promotion
|
19,264 | 5,080 | 301 | 24,645 | ||||||||||||
|
Contribution
margin
|
$ | 68,901 | $ | 24,880 | $ | 3,545 | 97,326 | |||||||||
|
Other
operating expenses
|
33,869 | |||||||||||||||
|
Operating
income
|
63,457 | |||||||||||||||
|
Other
expense
|
16,853 | |||||||||||||||
|
Provision
for income taxes
|
18,594 | |||||||||||||||
|
Income
from continuing operations
|
28,010 | |||||||||||||||
|
Income
from discontinued operations, net of income tax
|
661 | |||||||||||||||
| Gain on sale of assets, net of income tax | 157 | |||||||||||||||
|
Net
income
|
$ | 28,828 | ||||||||||||||
9
|
Three
Months Ended December 31, 2008
|
||||||||||||||||
|
Over-the-Counter
|
Household
|
Personal
|
||||||||||||||
|
Healthcare
|
Cleaning
|
Care
|
Consolidated
|
|||||||||||||
|
(In
thousands)
|
||||||||||||||||
|
Net
sales
|
$ | 47,526 | $ | 27,586 | $ | 2,233 | $ | 77,345 | ||||||||
|
Other
revenues
|
69 | 552 | - | 621 | ||||||||||||
|
Total
revenues
|
47,595 | 28,138 | 2,233 | 77,966 | ||||||||||||
|
Cost
of sales
|
16,892 | 18,253 | 1,335 | 36,480 | ||||||||||||
|
Gross
profit
|
30,703 | 9,885 | 898 | 41,486 | ||||||||||||
|
Advertising
and promotion
|
9,459 | 1,794 | 96 | 11,349 | ||||||||||||
|
Contribution
margin
|
$ | 21,244 | $ | 8,091 | $ | 802 | 30,137 | |||||||||
|
Other
operating expenses
|
10,622 | |||||||||||||||
|
Operating
income
|
19,515 | |||||||||||||||
|
Other
expense
|
7,051 | |||||||||||||||
|
Provision
for income taxes
|
4,724 | |||||||||||||||
|
Income
from continuing operations
|
7,740 | |||||||||||||||
|
Income
from discontinued operations, net of income tax
|
278 | |||||||||||||||
|
Net
income
|
$ | 8,018 | ||||||||||||||
10
|
Nine
Months Ended December 31, 2008
|
||||||||||||||||
|
Over-the-Counter
|
Household
|
Personal
|
||||||||||||||
|
Healthcare
|
Cleaning
|
Care
|
Consolidated
|
|||||||||||||
|
(In
thousands)
|
||||||||||||||||
|
Net
sales
|
$ | 137,090 | $ | 87,472 | $ | 8,020 | $ | 232,582 | ||||||||
|
Other
revenues
|
93 | 1,828 | - | 1,921 | ||||||||||||
|
Total
revenues
|
137,183 | 89,300 | 8,020 | 234,503 | ||||||||||||
|
Cost
of sales
|
47,667 | 57,113 | 5,009 | 109,789 | ||||||||||||
|
Gross
profit
|
89,516 | 32,187 | 3,011 | 124,714 | ||||||||||||
|
Advertising
and promotion
|
25,150 | 6,595 | 384 | 32,129 | ||||||||||||
|
Contribution
margin
|
$ | 64,366 | $ | 25,592 | $ | 2,627 | 92,585 | |||||||||
|
Other
operating expenses
|
32,573 | |||||||||||||||
|
Operating
income
|
60,012 | |||||||||||||||
|
Other
expense
|
22,513 | |||||||||||||||
|
Provision
for income taxes
|
14,212 | |||||||||||||||
|
Income
from continuing operations
|
23,287 | |||||||||||||||
|
Income
from discontinued operations, net of income tax
|
1,034 | |||||||||||||||
|
Net
income
|
$ | 24,321 | ||||||||||||||
11