Exhibit 99.1
Prestige Brands Holdings, Inc. Reports Fiscal ’08 and Fourth Quarter Results;
Quarterly Revenue Up 3%, Net Income Up 24%
Irvington, NY, May 15, 2008—Prestige Brands Holdings, Inc. (NYSE-PBH) today announced results for the fourth quarter and fiscal year ended March 31, 2008.
Fourth Quarter, Fiscal Year 2008
The Company reported revenues of $80.4 million for the quarter ended March 31, 2008, a 3% increase over the comparable quarter of the prior fiscal year when the Company reported revenues of $78.0 million. The quarter’s revenue increase was driven by sales increases in the Company’s over-the-counter healthcare and household products segments.
Operating income of $24.8 million for the fourth fiscal quarter was 10% above the prior year comparable quarter’s $22.6 million. The improvement in operating income was primarily due to an increase in gross profit resulting from higher revenues, a reduction in obsolescence costs, and a slight reduction in general and administrative expenses.
Net income for the fourth fiscal quarter was $10.4 million, a $2.0 million (24%) increase over the prior year comparable quarter’s reported net income of $8.4 million. This translates to $0.21 per diluted share, compared to $0.17 per diluted share in the comparable quarter last year.
Results by Segment for the Fourth Fiscal Quarter Ended March 31, 2008
Over-the-Counter Healthcare Products
The over-the-counter healthcare segment’s fourth quarter revenues of $46.2 million were $2.9 million, 7% greater than revenues in the prior year comparable quarter. The increase
was due to the growth of several businesses in this segment, most notably Murine™ Earigate®, which has led the overall Murine brand to the #1 position in the OTC ear care category, according to independent audit surveys. Clear Eyes® eye care products enjoyed double digit growth, as a result of the introduction of Clear Eyes Maximum Redness and several new 1-ounce sizes of Clear Eyes most popular products. Chloraseptic® sore throat treatments also contributed to fourth quarter results due to increased demand as the cold/flu season modestly rebounded in February and March.
Household Cleaning Products
The household cleaning products segment reported net revenues of $29.7 million, 2% greater than the comparable period’s results of $29.0 million. The segment’s newest product, Comet® SprayGel Mildew Stain Remover, contributed to this growth as a result of higher levels of distribution over the prior year comparable quarter. These gains were partially offset by decreases in the Spic and Span® and Chore Boy® lines.
Personal Care Products
Revenues for the personal care products segment were $4.5 million or $1.3 million less than the prior year comparable quarter, in line with expectations. This is the smallest segment of our business, accounting for approximately 7% of total revenues.
Fiscal Year 2008
The Company reported total revenues of $326.6 million for the fiscal year ended March 31, 2008, 3% greater than fiscal 2007 revenues of $318.6 million.
Operating income of $91.4 million for fiscal 2008 was $3.3 million or 4% less than operating income of $94.7 million in fiscal 2007.
The Company’s reported net income of $33.9 million was $2.2 million or 6% below fiscal 2007 reported net income of $36.1 million. This translates to $0.68 per diluted share compared to $0.72 per diluted share in fiscal 2007. Net income for fiscal 2007
included a favorable non-cash income tax adjustment of $2.2 million. Excluding that favorable 2007 tax benefit, net income was unchanged from fiscal 2007 to fiscal 2008.
Free Cash Flow & Debt Repayment
Free cash flow is a “non-GAAP financial measure”. Free cash flow is presented here because management believes this 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, 2008 was $9.6 million, composed of operating cash flow of $9.7 million less capital expenditures of $0.1 million, a 42% decrease over free cash flow of $16.5 million, composed of operating cash flow of $16.6 million less capital expenditures of $0.1 million generated in the fourth quarter ended March 31, 2007. The decrease in free cash flow for the quarter is primarily related to an increase in accounts receivable. For fiscal year 2008, free cash flow totaled $44.5 million, composed of operating cash flow of $45.0 million less capital expenditures of $0.5 million.
Our strong free cash flow enabled the Company to pay down $15 million of its term loan during the fourth quarter. For fiscal 2008, the Company reduced its debt by $52.1 million, bringing total debt outstanding to $411.2 million at March 31, 2008.
According to Mark Pettie, Chairman and CEO, “We are generally pleased with the results of the quarter and the fiscal year, and believe we are on the road to sustainable organic growth. Importantly, during fiscal 2008, we identified the strategic changes necessary to deliver this growth and are well down the road to implementing them as we head into fiscal 2009. The key elements of disciplined portfolio management, breakthrough innovation, international growth, and improved organizational effectiveness set the stage for what we anticipate will be improved organic growth performance in the new fiscal year and beyond.”
Conference Call
The Company will host a conference call today at 8:30 a.m. EDT. To access the call, listeners calling from within North America may dial 866-271-6130 at least 15 minutes prior to the call. To access the call from outside North America, callers should dial 617-213-8894. The conference pass code is “prestige”. The Company will provide a live internet webcast as well as an archived replay which can be accessed from the Investor Relations page of http://www.prestigebrandsinc.com.
Telephonic replays will be available for two weeks following completion of the live call. The access numbers are 888-286-8010 within North America, and 617-801-6888 outside of North America. The pass code is 79362068.
About Prestige Brands Holdings, Inc.
Located in Irvington, New York, Prestige Brands Holdings, Inc. is a marketer and distributor of brand name over-the-counter healthcare, personal care, and household products sold throughout the U.S., Canada, and certain international markets. Key brands include Compound W® wart remover, Chloraseptic® sore throat treatment, New-Skin® liquid bandage, Clear Eyes® eye care and Murine® eye and ear care products, Little Remedies® pediatric over-the-counter products, Cutex® nail polish remover, Comet® and Spic and Span® household products, 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,” “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 requirements 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 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
| Three Months Ended March 31 | ||||||||
| (In thousands, except per share data) | 2008 | 2007 | ||||||
| Revenues | ||||||||
| Net sales | $ | 80,096 | $ | 77,683 | ||||
| Other revenues | 337 | 353 | ||||||
| Total revenues | 80,433 | 78,036 | ||||||
| Cost of Sales | ||||||||
| Cost of sales | 39,221 | 38,797 | ||||||
| Gross profit | 41,212 | 39,239 | ||||||
| Operating Expenses | ||||||||
| Advertising and promotion | 6,290 | 6,196 | ||||||
| General and administrative | 7,375 | 7,655 | ||||||
| Depreciation and amortization | 2,754 | 2,755 | ||||||
| Total operating expenses | 16,419 | 16,606 | ||||||
| Operating income | 24,793 | 22,633 | ||||||
| Other (income) expense | ||||||||
| Interest income | (151 | ) | (185 | ) | ||||
| Interest expense | 8,936 | 10,000 | ||||||
| Miscellaneous | (187 | ) | -- | |||||
| Total other (income) expense | 8,598 | 9,815 | ||||||
| Income before income taxes | 16,195 | 12,818 | ||||||
| Provision for income taxes | 5,844 | 4,423 | ||||||
| Net income | $ | 10,351 | $ | 8,395 | ||||
| Basic earnings per share | $ | 0.21 | $ | 0.17 | ||||
| Diluted earnings per share | $ | 0.21 | $ | 0.17 | ||||
Weighted average shares outstanding: Basic | 49,842 | 49,607 | ||||||
| Diluted | 50,037 | 50,027 | ||||||
Prestige Brands Holdings, Inc.
Consolidated Statements of Operations
| Year Ended March 31 | ||||||||||||
| (In thousands, except per share data) | 2008 | 2007 | 2006 | |||||||||
| Revenues | ||||||||||||
| Net sales | $ | 324,621 | $ | 316,847 | $ | 296,239 | ||||||
| Other revenues | 1,982 | 1,787 | 429 | |||||||||
| Total revenues | 326,603 | 318,634 | 296,668 | |||||||||
| Cost of Sales | ||||||||||||
| Cost of sales | 158,096 | 153,147 | 139,430 | |||||||||
| Gross profit | 168,507 | 165,487 | 157,238 | |||||||||
| Operating Expenses | ||||||||||||
| Advertising and promotion | 34,665 | 32,005 | 32,082 | |||||||||
| General and administrative | 31,414 | 28,416 | 21,158 | |||||||||
| Depreciation and amortization | 11,014 | 10,384 | 10,777 | |||||||||
| Impairment of goodwill | -- | -- | 1,892 | |||||||||
| Impairment of intangible asset | -- | -- | 7,425 | |||||||||
| Total operating expenses | 77,093 | 70,805 | 73,334 | |||||||||
| Operating income | 91,414 | 94,682 | 83,904 | |||||||||
| Other (income) expense | ||||||||||||
| Interest income | (675 | ) | (972 | ) | (568 | ) | ||||||
| Interest expense | 38,068 | 40,478 | 36,914 | |||||||||
| Miscellaneous | (187 | ) | -- | -- | ||||||||
| Total other (income) expense | 37,206 | 39,506 | 36,346 | |||||||||
| Income before income taxes | 54,208 | 55,176 | 47,558 | |||||||||
| Provision for income taxes | 20,289 | 19,098 | 21,281 | |||||||||
| Net income | $ | 33,919 | 36,078 | 26,277 | ||||||||
| Basic earnings per share | $ | 0.68 | $ | 0.73 | $ | 0.54 | ||||||
| Diluted earnings per share | $ | 0.68 | $ | 0.72 | $ | 0.53 | ||||||
Weighted average shares outstanding: Basic | 49,751 | 49,460 | 48,908 | |||||||||
| Diluted | 50,039 | 50,020 | 50,008 | |||||||||
Prestige Brands Holdings, Inc.
Consolidated Balance Sheets
| (In thousands) | March 31 | |||||||
| Assets | 2008 | 2007 | ||||||
| Current assets | ||||||||
| Cash and cash equivalents | $ | 6,078 | $ | 13,758 | ||||
| Accounts receivable | 44,219 | 35,167 | ||||||
| Inventories | 29,696 | 30,173 | ||||||
| Deferred income tax assets | 3,066 | 2,735 | ||||||
| Prepaid expenses and other current assets | 2,316 | 1,935 | ||||||
| Total current assets | 85,375 | 83,768 | ||||||
| Property and equipment | 1,433 | 1,449 | ||||||
| Goodwill | 308,915 | 310,947 | ||||||
| Intangible assets | 646,683 | 657,157 | ||||||
| Other long-term assets | 6,750 | 10,095 | ||||||
| Total Assets | $ | 1,049,156 | $ | 1,063,416 | ||||
| Liabilities and Stockholders’ Equity | ||||||||
| Current liabilities | ||||||||
| Accounts payable | $ | 20,539 | $ | 19,303 | ||||
| Accrued interest payable | 5,772 | 7,552 | ||||||
| Other accrued liabilities | 8,030 | 10,505 | ||||||
| Current portion of long-term debt | 3,550 | 3,550 | ||||||
| Total current liabilities | 37,891 | 40,910 | ||||||
| Long-term debt | 407,675 | 459,800 | ||||||
| Other long-term liabilities | 2,377 | 2,801 | ||||||
| Deferred income tax liabilities | 122,140 | 114,571 | ||||||
| Total Liabilities | 570,083 | 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 at March 31, 2008 and 2007 | 501 | 501 | ||||||
| Additional paid-in capital | 380,364 | 379,225 | ||||||
| Treasury stock, at cost – 59 shares and 55 shares at March 31, 2008 and 2007, respectively | (47 | ) | (40 | ) | ||||
| Accumulated other comprehensive income | (999 | ) | 313 | |||||
| Retained earnings | 99,254 | 65,335 | ||||||
| Total stockholders’ equity | 479,073 | 445,334 | ||||||
| Total Liabilities and Stockholders’ Equity | $ | 1,049,156 | $ | 1,063,416 | ||||
Prestige Brands Holdings, Inc.
Consolidated Statements of Cash Flows
| Year Ended March 31 | ||||||||||||
| 2008 | 2007 | 2006 | ||||||||||
| (In thousands) | ||||||||||||
| Operating Activities | ||||||||||||
| Net income | $ | 33,919 | $ | 36,078 | $ | 26,277 | ||||||
| Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||||
| Depreciation and amortization | 11,014 | 10,384 | 10,777 | |||||||||
| Amortization of financing costs | 3,007 | 3,257 | 2,649 | |||||||||
| Impairment of goodwill and intangible assets | -- | -- | 9,317 | |||||||||
| Deferred income taxes | 10,096 | 9,662 | 14,976 | |||||||||
| Stock-based compensation costs | 1,139 | 655 | 383 | |||||||||
| Changes in operating assets and liabilities, net of effects of purchases of businesses | ||||||||||||
| Accounts receivable | (9,052 | ) | 4,875 | (1,350 | ) | |||||||
| Inventories | 477 | 4,292 | (7,156 | ) | ||||||||
| Prepaid expenses and other assets | (381 | ) | (1,235 | ) | 2,623 | |||||||
| Accounts payable | (975 | ) | (186 | ) | (6,037 | ) | ||||||
| Income taxes payable | -- | (1,795 | ) | 1,795 | ||||||||
| Other accrued liabilities | (4,255 | ) | 5,912 | (393 | ) | |||||||
| Net cash provided by operating activities | 44,989 | 71,899 | 53,861 | |||||||||
| Investing Activities | ||||||||||||
| Purchases of equipment | (488 | ) | (540 | ) | (519 | ) | ||||||
| Purchases of intangible assets | (33 | ) | -- | (22,655 | ) | |||||||
| Change in other assets due to purchase price adjustments | (16 | ) | 750 | -- | ||||||||
| Purchases of businesses, net | -- | (31,261 | ) | (30,989 | ) | |||||||
| Net cash used for investing activities | (537 | ) | (31,051 | ) | (54,163 | ) | ||||||
| Financing Activities | ||||||||||||
| Proceeds from the issuance of notes | -- | -- | 30,000 | |||||||||
| Payment of deferred financing costs | -- | -- | (13 | ) | ||||||||
| Repayment of notes | (52,125 | ) | (35,280 | ) | (26,730 | ) | ||||||
| Proceeds from the issuance of equity, net | -- | -- | (63 | ) | ||||||||
| Redemption of equity interests | (7 | ) | (10 | ) | (26 | ) | ||||||
| Net cash provided by (used for) financing activities | (52,132 | ) | (35,290 | ) | 3,168 | |||||||
| Increase (decrease) in cash | (7,680 | ) | 5,558 | 2,866 | ||||||||
| Cash - beginning of year | 13,758 | 8,200 | 5,334 | |||||||||
| Cash - end of year | $ | 6,078 | $ | 13,758 | $ | 8,200 | ||||||
Prestige Brands Holdings, Inc.
Consolidating Statement of Operations
| Three Months Ended March 31, 2008 | ||||||||||||||||
Over-the- Counter | Household | Personal | ||||||||||||||
| (In Thousands) | Healthcare | Cleaning | Care | Consolidated | ||||||||||||
| �� | ||||||||||||||||
| Net sales | $ | 46,197 | $ | 29,386 | $ | 4,513 | $ | 80,096 | ||||||||
| Other revenues | -- | 337 | -- | 337 | ||||||||||||
| Total revenues | 46,197 | 29,723 | 4,513 | 80,433 | ||||||||||||
| Cost of sales | 17,276 | 19,147 | 2,798 | 39,221 | ||||||||||||
| Gross profit | 28,921 | 10,576 | 1,715 | 41,212 | ||||||||||||
| Advertising and promotion | 5,108 | 1,009 | 173 | 6,290 | ||||||||||||
| Contribution margin | $ | 23,813 | $ | 9,567 | $ | 1,542 | 34,922 | |||||||||
| Other operating expenses | 10,129 | |||||||||||||||
| Operating income | 24,793 | |||||||||||||||
| Other expenses | 8,598 | |||||||||||||||
| Provision for income taxes | 5,844 | |||||||||||||||
| Net income | $ | 10,351 | ||||||||||||||
| Three Months Ended March 31, 2007 | ||||||||||||||||
Over-the- Counter | Household | Personal | ||||||||||||||
| (In Thousands) | Healthcare | Cleaning | Care | Consolidated | ||||||||||||
| Net sales | $ | 43,277 | $ | 28,624 | $ | 5,782 | $ | 77,683 | ||||||||
| Other revenues | -- | 353 | -- | 353 | ||||||||||||
| Total revenues | 43,277 | 28,977 | 5,782 | 78,036 | ||||||||||||
| Cost of sales | 17,403 | 18,120 | 3,274 | 38,797 | ||||||||||||
| Gross profit | 25,874 | 10,857 | 2,508 | 39,239 | ||||||||||||
| Advertising and promotion | 4,628 | 1,375 | 193 | 6,196 | ||||||||||||
| Contribution margin | $ | 21,246 | $ | 9,482 | $ | 2,315 | 33,043 | |||||||||
| Other operating expenses | 10,410 | |||||||||||||||
| Operating income | 22,633 | |||||||||||||||
| Other expenses | 9,815 | |||||||||||||||
| Provision for income taxes | 4,423 | |||||||||||||||
| Net income | $ | 8,395 | ||||||||||||||
Prestige Brands Holdings, Inc.
Consolidating Statement of Operations
| Year Ended March 31, 2008 | ||||||||||||||||
Over-the- Counter | Household | Personal | ||||||||||||||
| (In Thousands) | Healthcare | Cleaning | Care | Consolidated | ||||||||||||
| Net sales | $ | 183,641 | $ | 119,224 | $ | 21,756 | $ | 324,621 | ||||||||
| Other revenues | 51 | 1,903 | 28 | 1,982 | ||||||||||||
| Total revenues | 183,692 | 121,127 | 21,784 | 326,603 | ||||||||||||
| Cost of sales | 69,344 | 75,459 | 13,293 | 158,096 | ||||||||||||
| Gross profit | 114,348 | 45,668 | 8,491 | 168,507 | ||||||||||||
| Advertising and promotion | 26,188 | 7,483 | 994 | 34,665 | ||||||||||||
| Contribution margin | $ | 88,160 | $ | 38,185 | $ | 7,497 | 133,842 | |||||||||
| Other operating expenses | 42,428 | |||||||||||||||
| Operating income | 91,414 | |||||||||||||||
| Other expenses | 37,206 | |||||||||||||||
| Provision for income taxes | 20,289 | |||||||||||||||
| Net income | $ | 33,919 | ||||||||||||||
| Year Ended March 31, 2007 | ||||||||||||||||
Over-the- Counter | Household | Personal | ||||||||||||||
| (In Thousands) | Healthcare | Cleaning | Care | Consolidated | ||||||||||||
| Net sales | $ | 174,704 | $ | 117,249 | $ | 24,894 | $ | 316,847 | ||||||||
| Other revenues | -- | 1,787 | -- | 1,787 | ||||||||||||
| Total revenues | 174,704 | 119,036 | 24,894 | 318,634 | ||||||||||||
| Cost of sales | 65,601 | 73,002 | 14,544 | 153,147 | ||||||||||||
| Gross profit | 109,103 | 46,034 | 10,350 | 165,487 | ||||||||||||
| Advertising and promotion | 24,201 | 6,679 | 1,125 | 32,005 | ||||||||||||
| Contribution margin | $ | 84,902 | $ | 39,355 | $ | 9,225 | 133,482 | |||||||||
| Other operating expenses | 38,800 | |||||||||||||||
| Operating income | 94,682 | |||||||||||||||
| Other expenses | 39,506 | |||||||||||||||
| Provision for income taxes | 19,098 | |||||||||||||||
| Net income | $ | 36,078 | ||||||||||||||
Prestige Brands Holdings, Inc.
Consolidating Statement of Operations
| Year Ended March 31, 2006 | ||||||||||||||||
Over-the- Counter | Household | Personal | ||||||||||||||
| (In Thousands) | Healthcare | Cleaning | Care | Consolidated | ||||||||||||
| Net sales | $ | 160,942 | $ | 107,372 | $ | 27,925 | $ | 296,239 | ||||||||
| Other revenues | -- | 429 | -- | 429 | ||||||||||||
| Total revenues | 160,942 | 107,801 | 27,925 | 296,668 | ||||||||||||
| Cost of sales | 58,491 | 65,088 | 15,851 | 139,430 | ||||||||||||
| Gross profit | 102,451 | 42,713 | 12,074 | 157,238 | ||||||||||||
| Advertising and promotion | 22,424 | 6,495 | 3,163 | 32,082 | ||||||||||||
| Contribution margin | $ | 80,027 | $ | 36,218 | $ | 8,911 | 125,156 | |||||||||
| Other operating expenses | 41,252 | |||||||||||||||
| Operating income | 83,904 | |||||||||||||||
| Other expenses | 36,346 | |||||||||||||||
| Provision for income taxes | 21,281 | |||||||||||||||
| Net income | $ | 26,277 | ||||||||||||||