• Prestige Consumer Healthcare Inc. Reports Second Quarter Results and Reaffirms Outlook for Fiscal 2023

    ソース: Nasdaq GlobeNewswire / 03 11 2022 06:00:01   America/New_York

    • Record Revenue of $289.3 Million in Q2 fiscal 2023 increased 4.7% versus Prior Year and 5.5% excluding Currency
    • Diluted EPS of $1.02 for Q2, ahead of expectations
    • Reduced Debt by $35 million in Q2 and Achieved Leverage Ratio of 3.7x
    • Reaffirming Full-Year Fiscal 2023 Revenue and Earnings Outlooks

    TARRYTOWN, N.Y., Nov. 03, 2022 (GLOBE NEWSWIRE) -- Prestige Consumer Healthcare Inc. (NYSE:PBH) today reported financial results for its second fiscal quarter ended September 30, 2022.

    “Our second quarter organic revenue growth of over 5% and strong earnings performance both exceeded our expectations, thanks to our proven business strategy, strong cash flow and the benefits of our leading portfolio of brands. Additionally, consistent with our strategy for disciplined capital deployment, we enhanced shareholder value by completing our $50 million share repurchase program while further reducing debt in Q2.” said Ron Lombardi, Chief Executive Officer of Prestige Consumer Healthcare.

    Second Fiscal Quarter Ended September 30, 2022

    Reported revenues in the second quarter of fiscal 2023 of $289.3 million increased 4.7% versus $276.2 million in the second quarter of fiscal 2022. Revenues increased 5.5% excluding the impact of foreign currency. The revenue performance for the quarter was driven by continued strong performance across many of the Company’s key brands and strong International OTC segment performance.

    Reported net income for the second quarter of fiscal 2023 totaled $51.0 million, compared to the prior year second quarter’s net income and adjusted net income of $45.3 million and $52.0 million, respectively. Diluted earnings per share of $1.02 for the second quarter of fiscal 2023 compared to GAAP and non-GAAP diluted earnings per share of $0.89 and $1.02 in the prior year comparable period, respectively.

    Adjustments to net income in the second quarter of fiscal 2022 included integration, transition, purchase accounting, legal and various other costs associated with the Akorn acquisition, as well as a loss on extinguishment of debt and the related income tax effects of the adjustments.

    Six Months Ended September 30, 2022

    Reported revenues for the first six months of fiscal 2023 totaled $566.3 million, an increase of 3.8%, compared to revenues of $545.4 million for the first six months of fiscal 2022. Revenues increased 2.2% excluding the impact of foreign currency and a $12.6 million contribution from the acquisition of Akorn in Q1 fiscal 2023. The revenue growth for the first six months was driven by strong International OTC segment performance and improved demand for certain brands, categories and channels that had been impacted by the COVID-19 virus in the first six months of the prior fiscal year.

    Reported net income for the first six months of fiscal 2023 totaled $106.3 million versus the prior year comparable period net income and adjusted net income of $103.1 million and $109.8 million, respectively. Diluted earnings per share were $2.11 for the first six months of fiscal 2023 compared to GAAP and non-GAAP diluted d earnings per share of $2.03 and $2.16 in the prior year comparable period, respectively.

    Adjustments to net income in the first six months of fiscal 2022 included integration, transition, purchase accounting, legal and various other costs associated with the Akorn acquisition, as well as a loss on extinguishment of debt and the related income tax effects of the adjustments.

    Free Cash Flow and Balance Sheet

    The Company's net cash provided by operating activities for second quarter fiscal 2023 was $57.5 million, compared to $61.2 million during the prior year comparable period. Non-GAAP free cash flow in the second quarter of fiscal 2023 was $55.2 million, a decrease compared to $61.9 million in the prior year. The Company's net cash provided by operating activities for the first six months of fiscal 2023 was $115.8 million, compared to $130.5 million during the prior year comparable period. Non-GAAP free cash flow in the first six months of fiscal 2023 was $112.4 million compared to $129.7 million in the prior year comparable period, with the change attributable to the timing of working capital.

    In the second quarter fiscal 2023, the Company repurchased approximately 0.2 million shares at a total investment of $12.3 million. In the first six months of fiscal 2023, the Company repurchased approximately 0.9 million shares at a total of $50.0 million and completing its previously authorized share repurchase program.

    The Company's net debt position as of September 30, 2022 was approximately $1.4 billion, resulting in a covenant-defined leverage ratio of 3.7x.

    Segment Review

    North American OTC Healthcare: Segment revenues of $252.1 million for the second quarter fiscal 2023 increased slightly versus the prior year comparable quarter's segment revenues of $251.7 million. The revenue performance for the quarter was driven by continued strong performance across many of our key brands, particularly in the Gastrointestinal and Analgesics categories, compared to the prior year.

    For the first six months of the current fiscal year, reported revenues for the North American OTC segment were $494.6 million, an increase compared to $494.1 million in the prior year comparable period. The increase was driven by increased demand for certain brands, categories and channels that had previously been impacted by the COVID-19 virus, most notably cough & cold and motion sickness products and an approximate $12.4 million contribution from the acquisition of Akorn in the first quarter fiscal 2023.

    International OTC Healthcare: Record segment fiscal second quarter 2023 revenues of $37.2 million increased 51.9% from $24.5 million reported in the prior year comparable period. The revenue increase versus the prior year second quarter related mainly to an increase in consumer demand for Hydralyte, partially offset by a $1.4 million currency headwind.

    For the first six months of the current fiscal year, reported revenues for the International OTC Healthcare segment were $71.8 million, an increase of 39.9% over the prior year comparable period’s revenues of $51.3 million. The increase was driven by similar factors attributable to the second quarter performance, along with a foreign currency headwind of $2.5 million.

    Commentary and Updated Outlook for Fiscal 2023

    Ron Lombardi, Chief Executive Officer, stated, “We are pleased with our first half fiscal 2023 performance. Our Q2 top-line revenue growth of over 5% excluding currency exceeded our expectations thanks to strong sales performance from the majority of our core brands and strong international segment performance. This resulted in strong cash flows that enabled us to continue investing in our brands, reduce debt, and complete our share repurchase program during the quarter.”

    “Following these results, we are reaffirming our fiscal 2023 outlook for revenue and earnings growth. We continue to maintain this growth outlook against a dynamic supply chain and inflationary environment thanks to the makeup of our portfolio and our strong three-pillar business strategy of brand-building, maintaining a strong financial profile, and optimizing capital allocation efficiency,” Mr. Lombardi concluded.

      Reaffirmed Fiscal 2023 Outlook 
     Revenue$1,120 to 1,130 million 
     Organic Revenue Growth2% to 3% 
     Diluted E.P.S.$4.18 to $4.23 
     Free Cash Flow$260 million or more 


    Fiscal Second Quarter 2023 Conference Call, Accompanying Slide Presentation and Replay

    The Company will host a conference call to review its second quarter results today, November 3, 2022 at 8:30 a.m. ET. The Company provides a live Internet webcast, a slide presentation to accompany the call, as well as an archived replay, all of which can be accessed from the Investor Relations page of the Company's website at www.prestigeconsumerhealthcare.com. To participate in the conference call via phone, participants may register for the call here to receive dial-in details and a unique pin. While not required, it is recommended to join 10 minutes prior to the event start. The slide presentation can be accessed from the Investor Relations page of the website by clicking on Webcasts and Presentations.

    A conference call replay will be available for approximately one week following completion of the live call and can be accessed on the Company’s Investor Relations page.

    Non-GAAP and Other Financial Information
    In addition to financial results reported in accordance with generally accepted accounting principles (GAAP), we have provided certain non-GAAP financial information in this release to aid investors in understanding the Company's performance. Each non-GAAP financial measure is defined and reconciled to its most closely related GAAP financial measure in the “About Non-GAAP Financial Measures” section at the end of this earnings release.

    Note Regarding Forward-Looking Statements
    This news release contains "forward-looking statements" within the meaning of the federal securities laws that are 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 "guidance," "strategy," "outlook," "projection," “plan,” "may," "will," "would," "expect," "anticipate," "believe”, "consistent," 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 Company's future operating results including revenues, organic growth, diluted earnings per share, and free cash flow, the impact of supply chain issues and inflation on the Company’s performance, the Company’s ability to execute on its brand-building and capital allocation strategy, and the Company’s ability to enhance shareholder value. 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 expected as a result of a variety of factors, including the impact of business and economic conditions, including as a result of COVID-19 and geopolitical instability, consumer trends, the impact of the Company’s advertising and marketing and new product development initiatives, customer inventory management initiatives, fluctuating foreign exchange rates, competitive pressures, and the ability of the Company’s manufacturing operations and third party manufacturers and logistics providers and suppliers to meet demand for its products and to avoid inflationary cost increases and disruption as a result of labor shortages. A discussion of other factors that could cause results to vary is included in the Company's Annual Report on Form 10-K for the year ended March 31, 2022 and other periodic reports filed with the Securities and Exchange Commission.

    About Prestige Consumer Healthcare Inc.
    Prestige Consumer Healthcare is a leading consumer healthcare products company with sales throughout the U.S. and Canada, Australia, and in certain other international markets. The Company’s diverse portfolio of brands include Monistat® and Summer’s Eve® women's health products, BC® and Goody's® pain relievers, Clear Eyes® and TheraTears® eye care products, DenTek® specialty oral care products, Dramamine® motion sickness treatments, Fleet® enemas and glycerin suppositories, Chloraseptic® and Luden's® sore throat treatments and drops, Compound W® wart treatments, Little Remedies® pediatric over-the-counter products, Boudreaux’s Butt Paste® diaper rash ointments, Nix® lice treatment, Debrox® earwax remover, Gaviscon® antacid in Canada, and Hydralyte® rehydration products and the Fess® line of nasal and sinus care products in Australia. Visit the Company's website at www.prestigeconsumerhealthcare.com.


    Prestige Consumer Healthcare Inc.
    Condensed Consolidated Statements of Income and Comprehensive Income
    (Unaudited)

      Three Months Ended
    September 30,     		 Six Months Ended
    September 30,
    (In thousands, except per share data)  2022   2021   2022   2021 
    Total Revenues $289,273  $276,225  $566,332  $545,406 
             
    Cost of Sales        
    Cost of sales excluding depreciation  126,384   116,722   241,380   225,057 
    Cost of sales depreciation  1,880   1,791   3,824   3,625 
    Cost of sales  128,264   118,513   245,204   228,682 
    Gross profit  161,009   157,712   321,128   316,724 
             
    Operating Expenses        
    Advertising and marketing  43,819   40,730   83,770   80,169 
    General and administrative  26,438   32,252   53,152   54,723 
    Depreciation and amortization  6,368   6,172   12,808   11,932 
    Total operating expenses  76,625   79,154   149,730   146,824 
    Operating income  84,384   78,558   171,398   169,900 
             
    Other expense        
    Interest expense, net  16,979   16,313   32,271   31,390 
    Loss on extinguishment of debt  —   2,122   —   2,122 
    Other expense, net  812   493   1,637   388 
    Total other expense, net  17,791   18,928   33,908   33,900 
    Income before income taxes  66,593   59,630   137,490   136,000 
    Provision for income taxes  15,570   14,305   31,195   32,920 
    Net income $51,023  $45,325  $106,295  $103,080 
             
    Earnings per share:        
    Basic $1.02  $0.90  $2.12  $2.05 
    Diluted $1.02  $0.89  $2.11  $2.03 
             
    Weighted average shares outstanding:        
    Basic  49,804   50,232   50,033   50,186 
    Diluted  50,265   50,791   50,496   50,731 
             
    Comprehensive income, net of tax:        
    Currency translation adjustments  (7,118)  (4,197)  (16,637)  (5,689)
    Unrealized gain on interest rate swaps  —   550   —   1,070 
    Net loss on termination of pension plan  —   —   (790)  — 
    Total other comprehensive loss  (7,118)  (3,647)  (17,427)  (4,619)
    Comprehensive income $43,905  $41,678  $88,868  $98,461 


    Prestige Consumer Healthcare Inc.
    Condensed Consolidated Balance Sheets
    (Unaudited)

    (In thousands)September 30,
    2022    		 March 31,
    2022
        
    Assets   
    Current assets   
    Cash and cash equivalents$42,442  $27,185 
    Accounts receivable, net of allowance of $20,673 and $19,720, respectively 145,992   139,330 
    Inventories 140,505   120,342 
    Prepaid expenses and other current assets 7,714   6,410 
    Total current assets 336,653   293,267 
        
    Property, plant and equipment, net 69,947   71,300 
    Operating lease right-of-use assets 17,300   20,372 
    Finance lease right-of-use assets, net 5,529   6,858 
    Goodwill 575,566   578,976 
    Intangible assets, net 2,670,942   2,696,635 
    Other long-term assets 2,577   3,273 
    Total Assets$3,678,514  $3,670,681 
        
    Liabilities and Stockholders' Equity   
    Current liabilities   
    Accounts payable 56,196   55,760 
    Accrued interest payable 15,688   4,437 
    Operating lease liabilities, current portion 6,647   6,360 
    Finance lease liabilities, current portion 2,793   2,752 
    Other accrued liabilities 70,984   74,113 
    Total current liabilities 152,308   143,422 
        
    Long-term debt, net 1,438,338   1,476,658 
    Deferred income tax liabilities 443,271   444,917 
    Long-term operating lease liabilities, net of current portion 12,785   16,088 
    Long-term finance lease liabilities, net of current portion 3,094   4,501 
    Other long-term liabilities 8,877   7,484 
    Total Liabilities 2,058,673   2,093,070 
        
    Total Stockholders' Equity 1,619,841   1,577,611 
    Total Liabilities and Stockholders' Equity$3,678,514  $3,670,681 


    Prestige Consumer Healthcare Inc.
    Condensed Consolidated Statements of Cash Flows
    (Unaudited)

     Six Months Ended September 30,
    (In thousands) 2022   2021 
    Operating Activities   
    Net income$106,295  $103,080 
    Adjustments to reconcile net income to net cash provided by operating activities:   
    Depreciation and amortization 16,632   15,557 
    Loss on disposal of property and equipment 94   27 
    Deferred income taxes 4,211   7,639 
    Amortization of debt origination costs 1,798   1,435 
    Stock-based compensation costs 7,323   5,097 
    Loss on extinguishment of debt —   2,122 
    Non-cash operating lease cost 2,984   3,351 
    Other 447   — 
    Changes in operating assets and liabilities, net of effects from acquisition:   
    Accounts receivable (8,276)  (34,322)
    Inventories (21,810)  12,978 
    Prepaid expenses and other current assets (1,501)  473 
    Accounts payable 1,016   (8,275)
    Accrued liabilities 9,788   24,570 
    Operating lease liabilities (3,201)  (3,150)
    Other (13)  (83)
    Net cash provided by operating activities 115,787   130,499 
        
    Investing Activities   
    Purchases of property, plant and equipment (3,423)  (4,252)
    Acquisition of Akorn —   (228,914)
    Other —   177 
    Net cash used in investing activities (3,423)  (232,989)
        
    Financing Activities   
    Term loan repayments (40,000)  (495,000)
    Proceeds from refinancing of Term Loan —   597,000 
    Borrowings under revolving credit agreement 20,000   85,000 
    Repayments under revolving credit agreement (20,000)  (65,000)
    Payments of debt costs —   (6,111)
    Payments of finance leases (1,369)  (1,496)
    Proceeds from exercise of stock options 1,489   2,707 
    Fair value of shares surrendered as payment of tax withholding (5,450)  (2,916)
    Repurchase of common stock (50,000)  — 
    Net cash (used in) provided by financing activities (95,330)  114,184 
        
    Effects of exchange rate changes on cash and cash equivalents (1,777)  (1,178)
    Increase in cash and cash equivalents 15,257   10,516 
    Cash and cash equivalents - beginning of period 27,185   32,302 
    Cash and cash equivalents - end of period$42,442  $42,818 
    Interest paid$19,016  $18,481 
    Income taxes paid$15,689  $21,141 


    Prestige Consumer Healthcare Inc.
    Condensed Consolidated Statements of Income
    Business Segments
    (Unaudited)

          
     Three Months Ended September 30, 2022
    (In thousands)North American
    OTC
    Healthcare    		 International
    OTC
    Healthcare    		 Consolidated
    Total segment revenues*$252,054  $37,219  $289,273 
    Cost of sales 113,533   14,731   128,264 
    Gross profit 138,521   22,488   161,009 
    Advertising and marketing 39,316   4,503   43,819 
    Contribution margin$99,205  $17,985  $117,190 
    Other operating expenses     32,806 
    Operating income    $84,384 

    *Intersegment revenues of $1.1 million were eliminated from the North American OTC Healthcare segment.

     Six Months Ended September 30, 2022
    (In thousands)North American
    OTC
    Healthcare    		 International
    OTC
    Healthcare    		 Consolidated
    Total segment revenues*$494,572  $71,760  $566,332 
    Cost of sales 216,454   28,750   245,204 
    Gross profit 278,118   43,010   321,128 
    Advertising and marketing 74,728   9,042   83,770 
    Contribution margin$203,390  $33,968  $237,358 
    Other operating expenses     65,960 
    Operating income    $171,398 

    *Intersegment revenues of $1.7 million were eliminated from the North American OTC Healthcare segment.

     Three Months Ended September 30, 2021
    (In thousands)North American
    OTC
    Healthcare    		 International
    OTC
    Healthcare    		 Consolidated
    Total segment revenues* 251,728   24,497   276,225 
    Cost of sales 108,623   9,890   118,513 
    Gross profit 143,105   14,607   157,712 
    Advertising and marketing 36,493   4,237   40,730 
    Contribution margin$106,612  $10,370  $116,982 
    Other operating expenses     38,424 
    Operating income     78,558 

    * Intersegment revenues of $0.7 million were eliminated from the North American OTC Healthcare segment.

     Six Months Ended September 30, 2021
    (In thousands)North American
    OTC
    Healthcare    		 International
    OTC
    Healthcare    		 Consolidated
    Total segment revenues*$494,121  $51,285  $545,406 
    Cost of sales 208,027   20,655   228,682 
    Gross profit 286,094   30,630   316,724 
    Advertising and marketing 71,723   8,446   80,169 
    Contribution margin$214,371  $22,184  $236,555 
    Other operating expenses     66,655 
    Operating income    $169,900 

    * Intersegment revenues of $1.7 million were eliminated from the North American OTC Healthcare segment.


    About Non-GAAP Financial Measures

    In addition to financial results reported in accordance with GAAP, we disclose certain Non-GAAP financial measures ("NGFMs"), including, but not limited to, Non-GAAP Organic Revenues, Non-GAAP Organic Revenue Change Percentage, Non-GAAP Adjusted Gross Margin, Non-GAAP Adjusted Gross Margin Percentage, Non-GAAP Adjusted General and Administrative Expense, Non-GAAP Adjusted General and Administrative Expense Percentage, Non-GAAP EBITDA, Non-GAAP EBITDA Margin, Non-GAAP Adjusted EBITDA, Non-GAAP Adjusted EBITDA Margin, Non-GAAP Adjusted Net Income, Non-GAAP Adjusted Diluted EPS, Non-GAAP Free Cash Flow, Non-GAAP Adjusted Free Cash Flow, and Net Debt.

    We use these NGFMs internally, along with GAAP information, in evaluating our operating performance and in making financial and operational decisions. We believe that the presentation of these NGFMs provides investors with greater transparency, and provides a more complete understanding of our business than could be obtained absent these disclosures, because the supplemental data relating to our financial condition and results of operations provides additional ways to view our operation when considered with both our GAAP results and the reconciliations below. In addition, we believe that the presentation of each of these NGFMs is useful to investors for period-to-period comparisons of results in assessing shareholder value, and we use these NGFMs internally to evaluate the performance of our personnel and also to evaluate our operating performance and compare our performance to that of our competitors.

    These NGFMs are not in accordance with GAAP, should not be considered as a measure of profitability or liquidity, and may not be directly comparable to similarly titled NGFMs reported by other companies. These NGFMs have limitations and they should not be considered in isolation from or as an alternative to their most closely related GAAP measures reconciled below. Investors should not rely on any single financial measure when evaluating our business. We recommend investors review the GAAP financial measures included in this earnings release. When viewed in conjunction with our GAAP results and the reconciliations below, we believe these NGFMs provide greater transparency and a more complete understanding of factors affecting our business than GAAP measures alone.

    NGFMs Defined

    We define our NGFMs presented herein as follows:

    • Non-GAAP Organic Revenues: GAAP Total Revenues excluding revenues associated with acquisitions where the acquired brands were not included in both periods presented and the impact of foreign currency exchange rates in the periods presented.
    • Non-GAAP Organic Revenue Change Percentage: Calculated as the change in Non-GAAP Organic Revenues from prior year divided by prior year Non-GAAP Organic Revenues.
    • Non-GAAP Adjusted Gross Margin: GAAP Gross Profit minus inventory step-up charges associated with acquisition.
    • Non-GAAP Adjusted Gross Margin Percentage: Calculated as Non-GAAP Adjusted Gross Margin divided by GAAP Total Revenues.
    • Non-GAAP Adjusted General and Administrative Expense: GAAP General and Administrative expenses minus costs associated with acquisition.
    • Non-GAAP Adjusted General and Administrative Expense Percentage: Calculated as Non-GAAP Adjusted General and Administrative expense divided by GAAP Total Revenues.
    • Non-GAAP EBITDA: GAAP Net Income before interest expense, net, provision for income taxes, and depreciation and amortization.
    • Non-GAAP EBITDA Margin: Calculated as Non-GAAP EBITDA divided by GAAP Total Revenues.
    • Non-GAAP Adjusted EBITDA: Non-GAAP EBITDA less inventory step-up charges associated with acquisition, costs associated with acquisition in general and administrative expenses, and loss on extinguishment of debt.
    • Non-GAAP Adjusted EBITDA Margin: Calculated as Non-GAAP adjusted EBITDA divided by GAAP Total Revenues.
    • Non-GAAP Adjusted Net Income: GAAP Net Income (Loss) before inventory step-up charges associated with acquisition, costs associated with acquisition in general and administrative expenses, loss on extinguishment of debt, applicable tax impact associated with these items and normalized tax rate adjustment.
    • Non-GAAP Adjusted Diluted EPS: Calculated as Non-GAAP Adjusted Net Income, divided by the diluted weighted average number of shares outstanding during the period.
    • Non-GAAP Free Cash Flow: Calculated as GAAP Net cash provided by operating activities less cash paid for capital expenditures.
    • Non-GAAP Adjusted Free Cash Flow: Calculated as Non-GAAP free cash flow plus cash payments associated with acquisition.
    • Net Debt: Calculated as total principal amount of debt outstanding ($1,455,000 at September 30, 2022) less cash and cash equivalents ($42,442 at September 30, 2022). Amounts in thousands.

    The following tables set forth the reconciliations of each of our NGFMs (other than Net Debt, which is reconciled above) to their most directly comparable financial measures presented in accordance with GAAP.

    Reconciliation of GAAP Total Revenues to Non-GAAP Organic Revenues and related Non-GAAP Organic Revenue Change percentage:

     Three Months Ended
    September 30,     		 Six Months Ended
    September 30,
      2022   2021   2022   2021 
    (In thousands)       
    GAAP Total Revenues$289,273  $276,225  $566,332  $545,406 
    Revenue Change 4.7%    3.8%  
    Adjustments:       
    Revenues associated with acquisition (1) —   —   (12,624)  — 
    Impact of foreign currency exchange rates —   (1,919)  —   (3,482)
    Total adjustments —   (1,919)  (12,624)  (3,482)
    Non-GAAP Organic Revenues$289,273  $274,306  $553,708  $541,924 
    Non-GAAP Organic Revenue Change 5.5%    2.2%  

    (1) Revenues of our Akorn acquisition for the three months ended June 30, 2022 are excluded for purposes of calculating Non-GAAP organic revenues.


    Reconciliation of GAAP Gross Profit and related GAAP Gross Profit percentage to Non-GAAP Adjusted Gross Margin and related Non-GAAP Adjusted Gross Margin percentage:

     Three Months Ended
    September 30,     		 Six Months Ended
    September 30,
      2022   2021   2022   2021 
    (In thousands)       
    GAAP Total Revenues$289,273  $276,225  $566,332  $545,406 
            
    GAAP Gross Profit$161,009  $157,712  $321,128  $316,724 
    GAAP Gross Profit as a Percentage of GAAP Total Revenue 55.7%  57.1%  56.7%  58.1%
    Adjustments:       
    Inventory step-up charges associated with acquisition (1) —   1,567   —   1,567 
    Total adjustments —   1,567   —   1,567 
    Non-GAAP Adjusted Gross Margin$161,009  $159,279  $321,128  $318,291 
    Non-GAAP Adjusted Gross Margin as a Percentage of GAAP Total Revenues 55.7%  57.7%  56.7%  58.4%

    (1) Inventory step-up charges relate to our North American OTC Healthcare segment.


    Reconciliation of GAAP General and Administrative Expense and related GAAP General and Administrative Expense
    percentage to Non-GAAP Adjusted General and Administrative Expense and related Non-GAAP Adjusted General and
    Administrative Expense percentage:

     Three Months Ended
    September 30,     		 Six Months Ended
    September 30,
      2022   2021   2022   2021 
    (In thousands)       
    GAAP General and Administrative Expense$26,438  $32,252  $53,152  $54,723 
    GAAP General and Administrative Expense as a Percentage of GAAP Total Revenue 9.1%  11.7%  9.4%  10.0%
            
    Adjustments:       
    Costs associated with acquisition (1) —   5,127   —   5,127 
    Total adjustments —   5,127   —   5,127 
    Non-GAAP Adjusted General and Administrative Expense$26,438  $27,125  $53,152  $49,596 
    Non-GAAP Adjusted General and Administrative Expense Percentage as a Percentage of GAAP Total Revenues 9.1%  9.8%  9.4%  9.1%

    (1) Costs related to the consummation of the acquisition process such as insurance costs, legal and other acquisition related professional fees.


    Reconciliation of GAAP Net Income to Non-GAAP EBITDA and related Non-GAAP EBITDA Margin, Non-GAAP Adjusted EBITDA and related Non-GAAP Adjusted EBITDA Margin:

     Three Months Ended
    September 30,     		 Six Months Ended
    September 30,
      2022   2021   2022   2021 
    (In thousands)       
    GAAP Net Income$51,023  $45,325  $106,295  $103,080 
    Interest expense, net 16,979   16,313   32,271   31,390 
    Provision for income taxes 15,570   14,305   31,195   32,920 
    Depreciation and amortization 8,248   7,963   16,632   15,557 
    Non-GAAP EBITDA$91,820  $83,906  $186,393  $182,947 
    Non-GAAP EBITDA Margin 31.7%  30.4%  32.9%  33.5%
            
    Adjustments:       
    Inventory step-up charges associated with acquisition in Cost of Sales (1) —   1,567   —   1,567 
    Costs associated with acquisition in General and Administrative Expense (2) —   5,127   —   5,127 
    Loss on extinguishment of debt —   2,122   —   2,122 
    Total adjustments —   8,816   —   8,816 
    Non-GAAP Adjusted EBITDA$91,820  $92,722  $186,393  $191,763 
    Non-GAAP Adjusted EBITDA Margin 31.7%  33.6%  32.9%  35.2%

    (1) Inventory step-up charges relate to our North American OTC Healthcare segment.
    (2) Costs related to the consummation of the acquisition process such as insurance costs, legal and other acquisition related professional fees.


    Reconciliation of GAAP Net Income and Diluted EPS to Non-GAAP Adjusted Net Income and related Non-GAAP Adjusted Diluted
    Earnings Per Share:

     Three Months Ended September 30,  Six Months Ended September 30,
      2022 2022
    Diluted
    EPS    		  2021 2021
    Diluted
    EPS    		  2022 2022
    Diluted
    EPS    		  2021 2021
    Diluted
    EPS
    (In thousands, except per share data)           
    GAAP Net Income and Diluted EPS$51,023 $1.02  $45,325 $0.89  $106,295 $2.11  $103,080 $2.03 
    Adjustments:           
    Inventory step-up charges and other costs associated with
    acquisition in Cost of Sales (1)    		 —  —   1,567  0.03   —  —   1,567  0.03 
    Costs associated with acquisition in General and Administrative Expense (2) —  —   5,127  0.10   —  —   5,127  0.10 
    Loss on extinguishment of debt —  —   2,122  0.04   —  —   2,122  0.04 
    Tax impact of adjustments (3) —  —   (2,115) (0.04)  —  —   (2,134) (0.04)
    Total adjustments —  —   6,701  0.13   —  —   6,682  0.13 
    Non-GAAP Adjusted Net Income and Adjusted Diluted EPS$51,023 $1.02  $52,026 $1.02  $106,295 $2.11  $109,762 $2.16 

    (1) Inventory step-up charges relate to our North American OTC Healthcare segment.
    (2) Costs related to the consummation of the acquisition process such as insurance costs, legal and other acquisition related professional fees.
    (3) The income tax adjustments are determined using applicable rates in the taxing jurisdictions in which the above adjustments relate and includes both current and deferred income tax expense (benefit) based on the specific nature of the specific Non-GAAP performance measure.


    Reconciliation of GAAP Net Income to Non-GAAP Free Cash Flow and Non-GAAP Adjusted Free Cash Flow:

     Three Months Ended
    September 30,     		 Six Months Ended
    September 30,
      2022   2021   2022   2021 
    (In thousands)       
    GAAP Net Income$51,023  $45,325  $106,295  $103,080 
    Adjustments:       
    Adjustments to reconcile net income to net cash provided by operating activities as shown in the Statement of Cash Flows 17,255   17,404   33,489   35,228 
    Changes in operating assets and liabilities as shown in the Statement of Cash Flows (10,738)  (1,535)  (23,997)  (7,809)
    Total adjustments 6,517   15,869   9,492   27,419 
    GAAP Net cash provided by operating activities 57,540   61,194   115,787   130,499 
    Purchases of property and equipment (2,376)  (2,752)  (3,423)  (4,252)
    Non-GAAP Free Cash Flow$55,164  $58,442  $112,364  $126,247 
    Payments associated with acquisition (1) —   3,465   —   3,465 
    Non-GAAP Adjusted Free Cash Flow$55,164  $61,907  $112,364  $129,712 

    (1) Payments related to the consummation of the acquisition process such as insurance costs, legal and other acquisition related professional fees.


    Outlook for Fiscal Year 2023:

    Reconciliation of Projected GAAP Net cash provided by operating activities to Projected Non-GAAP Free Cash Flow:

    (In millions)  
    Projected FY'23 GAAP Net cash provided by operating activities $270 
    Additions to property and equipment for cash  (10)
    Projected FY'23 Non-GAAP Free Cash Flow $260 


    Investor Relations Contact
    Phil Terpolilli, CFA, 914-524-6819
    irinquiries@prestigebrands.com


    Primary Logo

シェアする