Prestige Consumer Healthcare (PBH) 8-K Prestige Brands Holdings, Inc. Reports Second Quarter & Six Months Fiscal 2009 Results

EXHIBIT 99.1

For Release on November 6, 2008, 6 a.m

Prestige Brands Holdings, Inc. Reports Second Quarter & Six Months Fiscal 2009 Results

For the Quarter, Net Revenue Up 1%; Net Income Up 25%; Free Cash Flow Up 40%; Debt Paid Down $11 Million

Irvington, NY, November 6, 2008—Prestige Brands Holdings, Inc. (NYSE:PBH) today announced results for the second quarter and first half of fiscal year 2009, which ended on September 30, 2008.

Net revenues for the second fiscal quarter were $88.1 million, 1% above the prior year’s comparable quarter net revenues of $87.3 million. This resulted primarily from increases in sales of the Clear Eyes®, Comet® and Little Remedies® brands, as well as the introduction of two new products, Chloraseptic™ Allergen Block and Little Allergies™ Allergen Block.  Partially offsetting those increases were declines in Murine® Ear, Compound W® and Wartner® brands.

Quarterly operating income of $20.5 million was essentially flat to the prior year’s comparable quarter operating income of $20.6 million. This was primarily due to higher advertising and promotion expenditures (A&P) to introduce the two new products, partially offset by higher gross margins and lower general and administrative expenses (G&A).

Net income for the second fiscal quarter was $8.5 million, or $0.17 per share, an increase of 25% over the prior year’s comparable quarter net income of $6.8 million, or $0.14 per share. The improvement in net income was primarily due to a $2.9 million, or a 30% reduction in interest expense which resulted from the significant repayment of debt over the past fiscal year, combined with comparatively lower interest rates.

First Half of Fiscal 2009

Net revenues for the first six months of fiscal 2009 were $161.6 million, a decrease of 2.6% from the prior year’s comparable period revenues of $165.9 million.  Operating income was $41.7 million, 4.6% below the comparable period’s results of $43.7 million.  Net income of $16.3 million, or $0.33 per share during the first six months, was 7.6% higher than the comparable period’s net income of $15.1 or $0.30 per share.

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 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 second quarter ended September 30, 2008 was $18.2 million, an increase of 40% over the prior year’s comparable quarter. Free cash flow is composed of operating cash flow of $18.3 million less capital expenditures of $48,000. This compares to the prior year comparable quarter’s free cash flow of $13.0 million, comprised of operating cash flow of $13.1 million less capital expenditures of $100,000. The increase was primarily due to an increase in net income and an improvement in working capital.

The Company’s continued strong cash flow resulted in debt repayments of $11.0 million during the second fiscal quarter. Total debt has been reduced to $385.2 million at September 30, 2008. During the past twelve months, the Company’s senior secured term loan facility has been reduced by $51.9 million to $259.2 million with the average interest rate dropping to 4.75% in the current quarter from 7.74% for the year ago quarter.

During the past twelve months, the Company’s free cash flow has been used primarily to retire debt. As a result of the current banking and economic environment, the Company recently made the decision to enhance its liquidity position, and intends to reduce outstanding debt only modestly during the remainder of the fiscal year and build its cash reserves to approximately $30 million. Once that cash reserve objective is realized, the Company intends to resume debt repayments.

Second Quarter Results by Segment

Over-The-Counter (OTC) Healthcare Products

Net revenues of the OTC healthcare products segment were $50.3 million for the second fiscal quarter, an increase of 1% over the prior year’s comparable period revenues of $50.0 million. The increase was due to sales increases of the Clear Eyes®, Little Remedies® and The Doctor’s® brands, as well as the introduction of Chloraseptic™ Allergen Block and Little Allergies™ Allergen Block products. These sales gains were partially offset by declines in the Compound W® and Wartner® wart care brands resulting from unfavorable pricing dynamics specifically in the cryogenic segment of this category.

Household Products

Net revenues for the household products segment were $32.1 million for the second fiscal quarter, an increase of 2% over the prior year’s comparable period revenues of $31.4 million. The increase is attributable to sales increases in the Comet® brand, led by Comet® Spray Gel Mildew Stain Remover introduced in the prior fiscal year. Sales declines in the Spic and Span® and Chore Boy® line partially offset this increase.

Personal Care Products

Net revenues for the personal care products segment, the Company’s smallest business segment, were $5.6 million for the second fiscal quarter, a slight decrease from net revenues of $5.9 million in the prior year’s comparable period.

Commentary

“In an increasingly challenging operating environment, we generally are pleased with the overall results of the second quarter and the quality of our earnings,” said Mark Pettie, Chairman and CEO. “We expect the investments we made during the quarter to set the stage for improved organic growth in the second half. We are also pleased with steps that we undertook to strengthen our balance sheet by reducing debt and minimizing working capital in this economy. Combined with our operating results, these steps also enabled us to deliver another period of very solid cash flow.”

Conference Call

The Company will host a conference call to review its second quarter and six month results on Thursday, November 6, 2008 at 8:30 am. The toll free dial in number is 1-866-700-7173 within North America and 1-617-213-8838 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 North America. The pass code is 55096352.

About Prestige Brands Holdings, Inc.

Prestige Brands markets and distributes brand name over-the-counter healthcare, personal care and household products throughout the United States, Canada and certain international markets. Key brands include Compound W® wart treatment, Chloraseptic® sore throat relief products, New Skin® liquid bandage, Clear eyes® and Murine® eye and ear care products, Little Remedies® pediatric over-the-counter healthcare products, The Doctor’s® Night Guard™ dental protector, Cutex® nail polish remover, Comet® and Spic and Span® 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,” “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 the Company’s market and the demand for its products, future revenues, future debt retirement and our ability to manage costs and expenses, including those associated with interest rate risk. 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 actual 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

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)	2008			2007			2008			2007
Revenues
Net sales	$	87,369		$	86,840		$	160,285		$	164,881
Other revenues		682			497			1,300			1,067
Total revenues		88,051			87,337			161,585			165,948
Cost of Sales
Costs of sales		41,792			42,770			76,064			80,092
Gross profit		46,259			44,567			85,521			85,856
Operating Expenses
Advertising and promotion		13,638			11,017			20,957			18,803
General and administrative		9,363			10,184			17,336			17,830
Depreciation and amortization		2,757			2,756			5,513			5,507
Total operating expenses		25,758			23,957			43,806			42,140
Operating income		20,501			20,610			41,715			43,716
Other (income) expense
Interest income		(56	)		(173	)		(129	)		(360	)
Interest expense		6,835			9,768			15,591			19,642
Total other (income) expense		6,779			9,595			15,462			19,282
Income before income taxes		13,722			11,015			26,253			24,434
Provision for income taxes		5,200			4,186			9,950			9,285
Net income	$	8,522		$	6,829		$	16,303		$	15,149
Basic earnings per share	$	0.17		$	0.14		$	0.33		$	0.30
Diluted earnings per share	$	0.17		$	0.14		$	0.33		$	0.30
Weighted average shares outstanding:
Basic		49,924			49,710			49,902			49,686
Diluted		50,037			50,046			50,036			50,042

Prestige Brands Holdings, Inc.

Consolidated Balance Sheets

(Unaudited)

(In thousands)

Assets	September 30, 2008			March 31, 2008
Current assets
Cash and cash equivalents	$	12,630		$	6,078
Accounts receivable		42,494			44,219
Inventories		25,372			29,696
Deferred income tax assets		3,249			3,066
Prepaid expenses and other current assets		3,144			2,316
Total current assets		86,889			85,375
Property and equipment		1,284			1,433
Goodwill		309,879			308,915
Intangible assets		641,428			646,683
Other long-term assets		6,450			6,750
Total Assets	$	1,045,930		$	1,049,156
Liabilities and Stockholders’ Equity
Current liabilities
Accounts payable	$	17,430		$	20,539
Accrued interest payable		5,428			5,772
Other accrued liabilities		11,158			8,030
Current portion of long-term debt		3,550			3,550
Total current liabilities		37,566			37,891
Long-term debt		381,675			407,675
Other long-term liabilities		--			2,377
Deferred income tax liabilities		128,272			122,140
Total Liabilities		547,513			570,083
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		381,941			380,364
Treasury stock, at cost – 119 shares and 59 shares at     September 30 and March 31, 2008, respectively		(62	)		(47	)
Accumulated other comprehensive income		480			(999	)
Retained earnings		115,557			99,254
Total stockholders’ equity		498,417			479,073
Total Liabilities and Stockholders’ Equity	$	1,045,930		$	1,049,156

Prestige Brands Holdings, Inc.

Consolidated Statements of Cash Flows

(Unaudited)

	Six Months Ended September 30
(In thousands)	2008			2007
Operating Activities
Net income	$	16,303		$	15,149
Adjustments to reconcile net income to net cash    provided by operating activities:
Depreciation and amortization		5,513			5,507
Deferred income taxes		5,042			4,622
Amortization of deferred financing costs		1,159			1,561
Stock-based compensation		1,577			1,146
Changes in operating assets and liabilities
Accounts receivable		1,725			(11,345	)
Inventories		4,324			2,390
Prepaid expenses and other current assets		(828	)		(1,692	)
Accounts payable		(1,582	)		1,884
Accrued liabilities		407			2,270
Net cash provided by operating activities		33,640			21,492
Investing Activities
Purchases of equipment		(109	)		(194	)
Business acquisition purchase price adjustments		(964	)		(16	)
Net cash used for investing activities		(1,073	)		(210	)
Financing Activities
Repayment of long-term debt		(26,000	)		(26,237	)
Purchase of common stock for treasury		(15	)		(4	)
Net cash used for financing activities		(26,015	)		(26,241	)
Increase (Decrease) in cash		6,552			(4,959	)
Cash - beginning of period		6,078			13,758
Cash - end of period	$	12,630		$	8,799
Interest paid	$	14,775		$	18,078
Income taxes paid	$	4,761		$	5,664

Prestige Brands Holdings, Inc.

Consolidating Statements of Operations

(Unaudited)

	Three Months Ended September 30, 2008
	Over-the-
	Counter		Household		Personal
	Healthcare		Cleaning		Care		Consolidated
Net sales	$	50,318	$	31,482	$	5,569	$	87,369
Other revenues		24		658		--		682
Total revenues		50,342		32,140		5,569		88,051
Cost of sales		17,567		20,937		3,288		41,792
Gross profit		32,775		11,203		2,281		46,259
Advertising and promotion		10,654		2,731		253		13,638
Contribution margin	$	22,121	$	8,472	$	2,028		32,621
Other operating expenses								12,120
Operating income								20,501
Other (income) expense								6,779
Provision for income taxes								5,200
Net income							$	8,522

	Six Months Ended September 30, 2008
	Over-the-
	Counter		Household		Personal
	Healthcare		Cleaning		Care		Consolidated
Net sales	$	89,564	$	59,886	$	10,835	$	160,285
Other revenues		24		1,276		--		1,300
Total revenues		89,588		61,162		10,835		161,585
Cost of sales		30,775		38,860		6,429		76,064
Gross profit		58,813		22,302		4,406		85,521
Advertising and promotion		15,691		4,801		465		20,957
Contribution margin	$	43,122	$	17,501	$	3,941		64,564
Other operating expenses								22,849
Operating income								41,715
Other (income) expense								15,462
Provision for income taxes								9,950
Net income							$	16,303

Prestige Brands Holdings, Inc.

Consolidating Statements of 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