Exhibit 99.1    

Prestige Consumer Healthcare Inc. Reports Fiscal 2020 Second Quarter and Year-to-Date Results

Revenue $238.1 Million in Q2 Fiscal 2020; Organic Revenue Flat
GAAP Diluted EPS of $0.65 in Q2 Fiscal 2020; Adjusted EPS of $0.68, Up 5% Versus Prior Year Q2
Cash Flow From Operations of $50.2 Million; Non-GAAP Free Cash Flow of $47.2 Million in Q2
Reduced Debt by $46 Million and Completed $50 Million Share Repurchase Program in First Half Fiscal 2020
Reaffirming Previously Issued Organic FY’20 Outlook

TARRYTOWN, N.Y.--(GLOBE NEWSWIRE)-October 31, 2019-- Prestige Consumer Healthcare Inc. (NYSE:PBH) today reported financial results for its second quarter and year-to-date fiscal 2020 ended September 30, 2019.

“Our second quarter and year-to-date results were in-line with our expectations, led by positive consumption trends across our portfolio. Our solid financial profile and cash generation allowed us to opportunistically repurchase shares and further reduce debt during Q2. Based on these solid trends and strong cash flow we are well positioned to achieve our full-year fiscal 2020 guidance,” said Ron Lombardi, Chief Executive Officer of Prestige Consumer Healthcare.

Second Fiscal Quarter Ended September 30, 2019

Reported revenues in the second quarter of fiscal 2020 were $238.1 million compared to $239.4 million in the second quarter of fiscal 2019. Revenues were flat on an organic basis, which excludes the effect of foreign currency. The revenue performance for the quarter was driven by a strong international segment and consumption gains in the Company’s core brand portfolio domestically, offset by continued retailer inventory reductions.

Reported gross profit margin in the second quarter fiscal 2020 was 57.4%, flat with the prior year comparable period. Excluding transition costs associated with a new logistics provider and location, adjusted gross profit margin was 58.0% in second quarter fiscal 2020, an increase versus prior year driven primarily by product mix.






Reported net income for the second quarter of fiscal 2020 totaled $33.3 million versus the prior year comparable period net income of $30.8 million. Diluted earnings per share were $0.65 for the second quarter fiscal 2020, compared to $0.59 per share in the prior year comparable period. Non-GAAP adjusted net income for the second quarter fiscal 2020 was $34.3 million, flat to the prior year comparable period’s adjusted net income of $34.2 million. Non-GAAP adjusted earnings per share were $0.68 per share for the second quarter fiscal 2020, an increase compared to $0.65 per share in the prior year.

Adjustments to net income in the second quarter of fiscal 2020 included costs associated with a new logistics provider and location, and the related income tax effects of the adjustments. Adjustments to net income in the second quarter of fiscal 2019 included legal and various other costs associated with the Household Cleaning divestiture, and the related income tax effects.

First Half of Fiscal 2020 Ended September 30, 2019

Reported revenues for the first six months of fiscal 2020 decreased 4.7% to $470.2 million compared to $493.3 million in the first six months of fiscal 2019. Revenues were flat on an organic basis, which excludes the effect of foreign currency and the divestiture of the non-core Household Cleaning segment in the prior year. The revenue performance for the first six months of fiscal 2020 was driven by strong international segment growth and consumption gains in the Company’s core brand portfolio domestically, offset by retailer inventory reductions.

Reported gross profit margin in the first six months of fiscal 2020 was 57.6%, compared to 56.4% for the first six months of fiscal 2019. On an adjusted basis excluding the effects of a new logistics provider and location in the current year, gross profit margin was 57.9% for the first six months of fiscal 2020.

Reported net income for the first six months of fiscal 2020 totaled $67.2 million versus the prior year comparable period net income of $65.3 million. Diluted earnings per share were $1.31 for the first six months of fiscal 2020 compared to $1.24 per share in the prior year comparable period. Non-GAAP adjusted net income for the first six months of fiscal 2020 was $68.2 million, versus the prior year comparable period’s adjusted net income of $70.0 million. Non-GAAP adjusted earnings per share were $1.33 per share for the first six months of fiscal 2020 and in the first six months of fiscal 2019. The prior year comparable period results included profit contribution related to the divested Household Cleaning segment.

Adjustments to net income in the first six months of fiscal 2020 included costs associated with a new logistics provider and location, and the related income tax effects of the adjustments. Adjustments to net income in the first six months of fiscal





2019 included legal and various other costs and a gain associated with the Household Cleaning divestiture and the related income tax, as well as accelerated amortization of debt origination costs.


Free Cash Flow and Balance Sheet
The Company's net cash provided by operating activities for the second quarter 2020 increased to $50.2 million from $39.3 million during the same period a year earlier. Non-GAAP free cash flow for the second quarter fiscal 2020 was
$47.2 million, an increase from $44.1 million in the prior year comparable period.

In fiscal 2020 year-to-date, the Company used its cash flow to reduce debt by $46 million. The Company also fully executed its previously-authorized $50 million share repurchase program, repurchasing 1.6 million shares in total.

The Company's net debt position as of September 30, 2019 was approximately $1.7 billion, approximately flat versus the prior quarter, as second quarter 2020 cash generation went partially towards share repurchase. At September 30, 2019 the Company's covenant-defined leverage ratio was 5.0x.

Segment Review

North American OTC Healthcare: Segment revenues totaled $213.9 million for the second quarter of fiscal 2020, compared to the prior year comparable quarter's revenues of $216.0 million. The second quarter fiscal 2020 revenue performance was attributable to increased consumption for the Company’s core OTC brands which was more than offset by retailer inventory reductions.

For the first six months of the current fiscal year, reported revenues for the North American OTC Healthcare segment were $424.7 million compared to $430.7 million in the prior year comparable period. The first six months of fiscal year 2020 was favorably impacted by increased consumption among the majority of core OTC brands, but more than offset by inventory reductions at certain key retailers and continued declines of the Company’s manage-for-cash portfolio.

International OTC Healthcare: Segment fiscal second quarter 2020 revenues totaled $24.2 million, compared to $23.4 million reported in the prior year comparable period. Revenues versus the prior year second quarter benefitted from





consumption growth and the timing of distributor orders and shipments, partially offset by unfavorable foreign currency of approximately $1 million.

For the first six months of the current fiscal year, reported revenues for the International OTC Healthcare segment were $45.6 million versus the prior year’s comparable period’s revenues of $42.8 million, attributable to consumption and shipment growth in the Asia-Pacific region, including the Company’s brand portfolio in Australia and Asia-Pacific. Growth was partially offset by unfavorable foreign currency exchange rates of approximately $2 million.

Household Cleaning: As previously announced, the Company sold its Household Cleaning segment on July 2, 2018 and used net proceeds from the divestiture to pay down debt. For the first quarter of fiscal 2019, the Household Cleaning segment generated $19.8 million in revenues, with no reported revenue in subsequent quarters.

Commentary and Outlook for Fiscal 2020

Ron Lombardi, CEO, stated, “Midway through fiscal 2020, we are pleased with our performance which has tracked to our expectations and gives us confidence in our financial outlook for the year. Our consumption trends remain healthy, and importantly include market share gains for the majority of the Company’s core brands, which are driven by our invest-for-growth strategy. In addition, as we previously discussed in our Q1 earnings release, we have commenced the transition to a new third-party logistics provider and location and, although early in this process, it is tracking to our expectations for both costs and timing.”

Mr. Lombardi continued, “For full-year fiscal 2020 we continue to expect organic revenue to be approximately flat versus the year ago, with reported revenues down slightly from our prior outlook due to unfavorable foreign currency. Our stable business profit outlook for fiscal 2020 enables a disciplined capital allocation approach, in which we still anticipate our primary use of cash being debt reduction. We continue to benefit from a diverse portfolio of leading brands and remain confident in our long-term growth prospects,” Mr. Lombardi concluded.

 
Fiscal 2020 Full-Year Outlook
 
Revenue(1)
$947 to $957 million
 
Organic Growth Percentage*
Approximately Flat
 
Adjusted E.P.S.*
$2.76 to $2.83
Adjusted Free Cash Flow*
$200 million or more
hh





(1)
Revenue outlook includes estimated unfavorable foreign currency for the fiscal year

* See the “About Non-GAAP Financial Measures” section of this report for further presentation information.

Fiscal Q2 2020 Conference Call, Accompanying Slide Presentation and Replay
The Company will host a conference call to review its second quarter results today, October 31, 2019 at 8:30 a.m. ET. The toll-free dial-in numbers are 844-233-9440 within North America and 574-990-1016 outside of North America. The conference ID number is 7237807. 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. The slide presentation can be accessed from the Investor Relations page of the website by clicking on Webcasts and Presentations.

Telephonic replays will be available for one week following the completion of the call and can be accessed at 855-859-2056 within North America and at 404-537-3406 from outside North America. The conference ID is 7237807.

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 "assumptions," "target," "guidance," "prospects," "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 expected consumption trends and market share for the Company’s products, costs and timing of the transition to a new logistics provider, Company's expectations regarding future operating results including revenues, organic growth, earnings per share and free cash flow, the Company’s disciplined capital allocation, the Company’s ability to reduce debt and the Company’s ability to position itself for long-term





growth. 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 the Company’s advertising and promotional and new product development initiatives, customer inventory management initiatives, general economic and business conditions, fluctuating foreign exchange rates, consumer trends, competitive pressures, the impact of the transition to a new third party logistics provider, and the ability of the Company’s third party manufacturers and logistics providers and suppliers to meet demand for its products and to reduce costs. 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, 2019 and other periodic reports filed with the Securities and Exchange Commission.

About Prestige Consumer Healthcare Inc.
Prestige Consumer Healthcare markets, sells, manufactures and distributes consumer healthcare products to retail outlets 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® 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)
 
2019
 
2018
 
2019
 
2018
Revenues
 
 
 
 
 
 
 
 
Net sales
 
$
238,051

 
$
239,354

 
$
470,184

 
$
493,308

Other revenues
 
18

 
3

 
39

 
29

Total revenues
 
238,069

 
239,357

 
470,223


493,337

 
 
 
 
 
 
 
 
 
Cost of Sales
 
 

 
 

 
 
 
 
Cost of sales excluding depreciation
 
100,318

 
100,647

 
197,418

 
212,716

Cost of sales depreciation
 
1,000


1,238

 
1,987


2,526

Cost of sales
 
101,318


101,885

 
199,405


215,242

Gross profit
 
136,751

 
137,472

 
270,818

 
278,095

 
 
 
 
 
 
 
 
 
Operating Expenses
 
 

 
 

 
 
 
 
Advertising and promotion
 
38,667

 
37,042

 
73,468

 
74,153

General and administrative
 
22,514

 
24,034

 
44,220

 
47,975

Depreciation and amortization
 
6,222

 
6,756

 
12,296

 
13,840

Gain on divestiture
 

 
(1,284
)
 

 
(1,284
)
Total operating expenses
 
67,403

 
66,548

 
129,984

 
134,684

Operating income
 
69,348

 
70,924

 
140,834

 
143,411

 
 
 
 
 
 
 
 
 
Other (income) expense
 
 

 
 

 
 
 
 
Interest income
 
(32
)
 
(33
)
 
(75
)
 
(133
)
Interest expense
 
24,509

 
27,103

 
49,572

 
53,143

Other expense, net
 
859

 
335

 
1,275

 
422

Total other expense
 
25,336

 
27,405

 
50,772

 
53,432

Income before income taxes
 
44,012

 
43,519

 
90,062

 
89,979

Provision for income taxes
 
10,760

 
12,678

 
22,885

 
24,672

Net income
 
$
33,252

 
$
30,841

 
$
67,177

 
$
65,307

 
 
 
 
 
 
 
 
 
Earnings per share:
 
 

 
 

 
 
 
 
Basic
 
$
0.66

 
$
0.59

 
$
1.32

 
$
1.25

Diluted
 
$
0.65

 
$
0.59

 
$
1.31

 
$
1.24

 
 
 
 
 
 
 
 
 
Weighted average shares outstanding:
 
 

 
 

 
 
 
 
Basic
 
50,455

 
51,841

 
51,073

 
52,238

Diluted
 
50,811

 
52,153

 
51,426

 
52,545

 
 
 
 
 
 
 
 
 
Comprehensive income, net of tax:
 
 
 
 
 
 
 
 
Currency translation adjustments
 
(3,584
)

(2,145
)
 
(3,808
)
 
(5,119
)
Total other comprehensive loss
 
(3,584
)

(2,145
)
 
(3,808
)

(5,119
)
Comprehensive income
 
$
29,668


$
28,696

 
$
63,369


$
60,188







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

(In thousands)
September 30, 2019
 
March 31, 2019
 
 
 
 
Assets
 
 
 
Current assets
 
 
 
Cash and cash equivalents
$
27,905

 
$
27,530

Accounts receivable, net of allowance of $18,095 and $12,965, respectively
142,602

 
148,787

Inventories
126,362

 
119,880

Prepaid expenses and other current assets
8,017

 
4,741

Total current assets
304,886

 
300,938

 
 
 
 
Property, plant and equipment, net
52,500

 
51,176

Operating lease right-of-use asset
33,145

 

Goodwill
577,544

 
578,583

Intangible assets, net
2,493,469

 
2,507,210

Other long-term assets
3,216

 
3,129

Total Assets
$
3,464,760

 
$
3,441,036

 
 
 
 
Liabilities and Stockholders' Equity
 

 
 

Current liabilities
 

 
 

Accounts payable
$
64,941

 
$
56,560

Accrued interest payable
9,458

 
9,756

Operating lease liabilities, current portion
7,016

 

Other accrued liabilities
65,479

 
60,663

Total current liabilities
146,894

 
126,979

 
 
 
 
Long-term debt, net
1,754,171

 
1,798,598

Deferred income tax liabilities
404,632

 
399,575

Long-term operating lease liability, net of current portion
27,457

 

Other long-term liabilities
18,816

 
20,053

Total Liabilities
2,351,970

 
2,345,205

 
 
 
 
 
 
 
 
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 - 53,755 shares at September 30, 2019 and 53,670 shares at March 31, 2019
537

 
536

Additional paid-in capital
483,595

 
479,150

Treasury stock, at cost - 3,523 shares at September 30, 2019 and 1,871 shares at March 31, 2019
(110,784
)
 
(59,928
)
Accumulated other comprehensive loss, net of tax
(29,555
)
 
(25,747
)
Retained earnings
768,997

 
701,820

Total Stockholders' Equity
1,112,790

 
1,095,831

Total Liabilities and Stockholders' Equity
$
3,464,760

 
$
3,441,036








Prestige Consumer Healthcare Inc.
Condensed Consolidated Statements of Cash Flows
(Unaudited)
 
Six Months Ended September 30,
(In thousands)
2019
 
2018
Operating Activities
 
 
 
Net income
$
67,177

 
$
65,307

Adjustments to reconcile net income to net cash provided by operating activities:
 
 
 
Depreciation and amortization
14,283

 
16,366

Gain on divestiture

 
(1,284
)
Loss on disposal of property and equipment
19

 
37

Deferred income taxes
5,827

 
339

Amortization of debt origination costs
1,711

 
3,021

Stock-based compensation costs
3,902

 
4,328

Non-cash operating lease cost
3,154

 

Other

 
247

Changes in operating assets and liabilities:
 
 
 
Accounts receivable
5,982

 
(7,718
)
Inventories
(6,400
)
 
(4,145
)
Prepaid expenses and other current assets
(3,128
)
 
1,302

Accounts payable
8,465

 
4,187

Accrued liabilities
6,616

 
14,339

Operating lease liabilities
(3,398
)
 

Other
(1,210
)
 
(1,219
)
Net cash provided by operating activities
103,000

 
95,107

 
 
 
 
Investing Activities
 

 
 

Purchases of property, plant and equipment
(5,822
)

(5,074
)
Proceeds from divestiture

 
65,912

Net cash (used in) provided by investing activities
(5,822
)
 
60,838

 
 
 
 
Financing Activities
 

 
 

Term loan repayments

 
(100,000
)
Borrowings under revolving credit agreement
30,000

 
30,000

Repayments under revolving credit agreement
(76,000
)
 
(30,000
)
Proceeds from exercise of stock options
544

 
1,028

Fair value of shares surrendered as payment of tax withholding
(880
)
 
(2,281
)
Repurchase of common stock
(49,976
)
 
(49,978
)
Net cash used in financing activities
(96,312
)
 
(151,231
)
 
 
 
 
Effects of exchange rate changes on cash and cash equivalents
(491
)
 
(352
)
Increase in cash and cash equivalents
375

 
4,362

Cash and cash equivalents - beginning of period
27,530

 
32,548

Cash and cash equivalents - end of period
$
27,905

 
$
36,910

 
 
 
 
Interest paid
$
48,033

 
$
49,147

Income taxes paid
$
14,655

 
$
7,778






Prestige Consumer Healthcare Inc.
Condensed Consolidated Statements of Income
Business Segments
(Unaudited)
 
 
 
 
 
 
 
 
 
Three Months Ended September 30, 2019
(In thousands)
North American OTC Healthcare
 
International OTC Healthcare
 
Household
Cleaning
 
Consolidated
Total segment revenues*
$
213,878


$
24,191


$


$
238,069

Cost of sales
92,931


8,387




101,318

Gross profit
120,947


15,804




136,751

Advertising and promotion
34,595


4,072




38,667

Contribution margin
$
86,352


$
11,732


$


98,084

Other operating expenses
 




 


28,736

Operating income
 




 


69,348

Other expense
 




 


25,336

Income before income taxes








44,012

Provision for income taxes
 




 


10,760

Net income








$
33,252

*Intersegment revenues of $0.8 million were eliminated from the North American OTC Healthcare segment.

 
Six Months Ended September 30, 2019
(In thousands)
North American OTC Healthcare
 
International OTC Healthcare
 
Household
Cleaning
 
Consolidated
Total segment revenues*
$
424,662


$
45,561


$


$
470,223

Cost of sales
181,742


17,663




199,405

Gross profit
242,920


27,898




270,818

Advertising and promotion
65,609


7,859




73,468

Contribution margin
$
177,311


$
20,039


$


197,350

Other operating expenses
 





 


56,516

Operating income
 





 


140,834

Other expense
 





 


50,772

Income before income taxes









90,062

Provision for income taxes
 





 


22,885

Net income









$
67,177

*Intersegment revenues of $1.6 million were eliminated from the North American OTC Healthcare segment.





 
 
 
 
 
 
 
 
 
Three Months Ended September 30, 2018
(In thousands)
North American OTC Healthcare
 
International OTC Healthcare
 
Household
Cleaning
 
Consolidated
Total segment revenues*
$
215,950


$
23,407


$


$
239,357

Cost of sales
92,007


9,878




101,885

Gross profit
123,943


13,529




137,472

Advertising and promotion
33,325


3,717




37,042

Contribution margin
$
90,618


$
9,812


$


100,430

Other operating expenses
 





 


29,506

Operating income
 





 


70,924

Other expense
 





 


27,405

Income before income taxes









43,519

Provision for income taxes
 





 


12,678

Net income









$
30,841

* Intersegment revenues of $1.6 million were eliminated from the North American OTC Healthcare segment.

 
Six Months Ended September 30, 2018
(In thousands)
North American OTC Healthcare
 
International OTC Healthcare
 
Household
Cleaning
 
Consolidated
Total segment revenues*
$
430,725


$
42,801


$
19,811


$
493,337

Cost of sales
181,160


17,494


16,588


215,242

Gross profit
249,565


25,307


3,223


278,095

Advertising and promotion
66,583


7,140


430


74,153

Contribution margin
$
182,982


$
18,167


$
2,793


203,942

Other operating expenses
 





 


60,531

Operating income
 





 


143,411

Other expense
 





 


53,432

Income before income taxes









89,979

Provision for income taxes
 





 


24,672

Net income









$
65,307

* Intersegment revenues of $4.3 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 Growth 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 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 divestiture, allocated cost that remain after divestiture and impact of foreign currency exchange rates in the periods presented.
Non-GAAP Organic Revenue Growth 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 certain transition and other costs associated with new warehouse and divestiture.
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 certain transition and divestiture-related costs.
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 (Loss) less net interest expense (income), income taxes provision (benefit), 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 certain transition and other costs associated with new warehouse and divestiture.
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 certain transition and other costs associated with new warehouse and divestiture.
Non-GAAP Adjusted EPS: Calculated as Non-GAAP Adjusted Net Income, divided by the weighted average number of common and potential common shares outstanding during the period.
Non-GAAP Free Cash Flow: GAAP Net cash provided by operating activities less cash paid for capital expenditures.
Non-GAAP Adjusted Free Cash Flow: Non-GAAP Free Cash Flow plus cash payments made for transition and other costs associated with new warehouse and divestiture.
Net Debt: Calculated as total principal amount of debt outstanding ($1,767,000 at September 30, 2019) less cash and cash equivalents ($27,905 at September 30, 2019). Amounts in thousands.

The following tables set forth the reconciliations of each of our NGFMs 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 Growth percentage:
 
Three Months Ended September 30,
 
Six Months Ended September 30,
 
2019
 
2018
 
2019
 
2018
(In thousands)
 
 
 
 
 
 
 
GAAP Total Revenues
$
238,069

 
$
239,357


$
470,223


$
493,337

Revenue Growth
(0.5
)%
 
 
 
(4.7
)%
 
 
Adjustments:
 
 
 
 
 
 
 
Revenues associated with divestiture

 

 

 
(19,811
)
Allocated costs that remain after divestiture

 

 

 
(659
)
Impact of foreign currency exchange rates

 
(1,155
)
 

 
(2,557
)
Total adjustments

 
(1,155
)
 

 
(23,027
)
Non-GAAP Organic Revenues
$
238,069

 
$
238,202

 
$
470,223

 
$
470,310

Non-GAAP Organic Revenue Growth
(0.1
)%
 

 
 %
 



Reconciliation of GAAP Gross Profit to Non-GAAP Adjusted Gross Margin and related Non-GAAP Adjusted Gross Margin percentage:
 
Three Months Ended September 30,
 
Six Months Ended September 30,
 
2019
 
2018
 
2019
 
2018
(In thousands)
 
 
 
 
 
 
 
GAAP Total Revenues
$
238,069

 
$
239,357


$
470,223


$
493,337

 
 
 
 
 
 
 
 
GAAP Gross Profit
$
136,751

 
$
137,472

 
$
270,818

 
$
278,095

GAAP Gross Profit as a Percentage of GAAP Total Revenue
57.4
%
 
57.4
%
 
57.6
%
 
56.4
%
Adjustments:
 
 
 
 
 
 
 
Transition and other costs associated with new warehouse and divestiture (1)
1,407




1,407


170

Total adjustments
1,407

 

 
1,407

 
170

Non-GAAP Adjusted Gross Margin
$
138,158

 
$
137,472

 
$
272,225

 
$
278,265

Non-GAAP Adjusted Gross Margin as a Percentage of GAAP Total Revenues
58.0
%
 
57.4
%
 
57.9
%
 
56.4
%
(1) Items related to new warehouse represent costs to transition to the new warehouse and duplicate costs incurred during the transition. Items related to divestiture represent costs related to divesting of assets sold.






















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,
 
2019
 
2018
 
2019
 
2018
(In thousands)
 
 
 
 
 
 
 
GAAP General and Administrative Expense
$
22,514

 
$
24,034

 
$
44,220

 
$
47,975

GAAP General and Administrative Expense as a Percentage of GAAP Total Revenue
9.5
%
 
10.0
%
 
9.4
%
 
9.7
%
 
 
 
 
 
 
 
 
Adjustments:
 
 
 
 
 
 
 
Transition and other costs associated with divestiture (1)


2,850




4,272

Total adjustments

 
2,850

 

 
4,272

Non-GAAP Adjusted General and Administrative Expense
$
22,514

 
$
21,184

 
$
44,220

 
$
43,703

Non-GAAP Adjusted General and Administrative Expense Percentage as a Percentage of GAAP Total Revenues
9.5
%
 
8.9
%
 
9.4
%
 
8.9
%
(1) Items related to divestiture represent costs related to divesting of assets sold, including (but not limited to) costs to exit or convert contractual obligations, severance and consulting costs; and certain costs related to the consummation of the divestiture process such as legal and other 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,
 
2019
 
2018
 
2019
 
2018
(In thousands)
 
 
 
 
 
 
 
GAAP Net Income
$
33,252

 
$
30,841

 
$
67,177

 
$
65,307

Interest expense, net
24,477

 
27,070

 
49,497

 
53,010

Provision for income taxes
10,760

 
12,678

 
22,885

 
24,672

Depreciation and amortization
7,222

 
7,994

 
14,283

 
16,366

Non-GAAP EBITDA
75,711

 
78,583

 
153,842

 
159,355

Non-GAAP EBITDA Margin
31.8
%
 
32.8
%
 
32.7
%
 
32.3
%
Adjustments:
 
 
 
 
 
 
 
Transition and other costs associated with new warehouse and divestiture in Cost of Goods Sold (1)
1,407

 

 
1,407

 
170

Transition and other costs associated with divestiture in General and Administrative Expense (2)

 
2,850

 

 
4,272

Gain on divestiture

 
(1,284
)
 

 
(1,284
)
Total adjustments
1,407

 
1,566

 
1,407

 
3,158

Non-GAAP Adjusted EBITDA
$
77,118

 
$
80,149

 
$
155,249

 
$
162,513

Non-GAAP Adjusted EBITDA Margin
32.4
%
 
33.5
%
 
33.0
%
 
32.9
%
(1) Items related to new warehouse represent costs to transition to the new warehouse and duplicate costs incurred during the transition. Items related to divestiture represent costs related to divesting of assets sold.
(2) Items related to divestiture represent costs related to divesting of assets sold, including (but not limited to) costs to exit or convert contractual obligations, severance and consulting costs; and certain costs related to the consummation of the divestiture process such as legal and other related professional fees.







Reconciliation of GAAP Net Income to Non-GAAP Adjusted Net Income and related Non-GAAP Adjusted Earnings Per Share:
 
Three Months Ended September 30,
 
Six Months Ended September 30,
 
2019
2019 Adjusted EPS
 
2018
2018 Adjusted EPS
 
2019
2019 Adjusted EPS
 
2018
2018 Adjusted EPS
(In thousands, except per share data)
 
 
 
 
 
 
 
 
 
 
 
GAAP Net Income
$
33,252

$
0.65

 
$
30,841

$
0.59

 
$
67,177

$
1.31

 
$
65,307

$
1.24

Adjustments:
 
 
 
 
 
 
 
 
 
 
 
Transition and other costs associated with new warehouse and divestiture in Cost of Goods Sold (1)
1,407

0.03

 


 
1,407

0.03

 
170


Transition and other costs associated with divestiture in General and Administrative Expense (2)


 
2,850

0.05

 


 
4,272

0.08

Gain on divestiture


 
(1,284
)
(0.02
)
 


 
(1,284
)
(0.02
)
Accelerated amortization of debt origination costs


 
706

0.01

 


 
706

0.01

Tax impact of adjustments (3)
(344
)
(0.01
)
 
824

0.02

 
(344
)
(0.01
)
 
420

0.01

Normalized tax rate adjustment (4)


 
222


 


 
415

0.01

Total adjustments
1,063

0.02

 
3,318

0.06

 
1,063

0.02

 
4,699

0.09

Non-GAAP Adjusted Net Income
and Adjusted EPS
$
34,315

$
0.68

 
$
34,159

$
0.65

 
$
68,240

$
1.33

 
$
70,006

$
1.33

Note: Amounts may not add due to rounding.
(1) Items related to new warehouse represent costs to transition to the new warehouse and duplicate costs incurred during the transition. Items related to divestiture represent costs related to divesting of assets sold.
(2) Items related to divestiture represent costs related to divesting of assets sold, including (but not limited to) costs to exit or convert contractual obligations, severance and consulting costs; and certain costs related to the consummation of the divestiture process such as legal and other 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.
(4) Income tax adjustment to adjust for discrete income tax items.

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,
 
2019
 
2018
 
2019
 
2018
(In thousands)
 
 
 
 
 
 
 
GAAP Net Income
$
33,252

 
$
30,841

 
$
67,177

 
$
65,307

Adjustments:
 
 
 
 
 
 
 
Adjustments to reconcile net income to net cash provided by operating activities as shown in the Statement of Cash Flows
14,039

 
5,349

 
28,896

 
23,054

Changes in operating assets and liabilities as shown in the Statement of Cash Flows
2,932

 
3,065

 
6,927

 
6,746

Total adjustments
16,971

 
8,414

 
35,823

 
29,800

GAAP Net cash provided by operating activities
50,223

 
39,255

 
103,000

 
95,107

Purchases of property and equipment
(3,866
)
 
(2,605
)
 
(5,822
)

(5,074
)
Non-GAAP Free Cash Flow
46,357

 
36,650

 
97,178

 
90,033

Transition and other payments associated with new warehouse and divestiture (1)
810

 
7,429

 
810

 
7,618

Non-GAAP Adjusted Free Cash Flow
$
47,167

 
$
44,079

 
$
97,988

 
$
97,651

(1) Payments related to new warehouse represent costs to transition to the new warehouse and duplicate costs incurred during the transition. Payments related to divestiture represent costs related to divesting of assets sold, including (but not limited to) costs to exit or convert contractual obligations, severance and consulting costs; and certain costs related to the consummation of the divestiture process such as legal and other related professional fees.
 







Outlook for Fiscal Year 2020:

Reconciliation of Projected GAAP EPS to Projected Non-GAAP Adjusted EPS:
 
2020 Projected EPS
 
Low
 
High
Projected FY'20 GAAP EPS
$
2.61

 
$
2.68

Adjustments:
 
 
 
Integration of new logistics provider (1)
0.15

 
0.15

Total Adjustments
0.15

 
0.15

Projected Non-GAAP Adjusted EPS
$
2.76

 
$
2.83

(1) Represents costs to integrate our new logistics provider into our operations.

Reconciliation of Projected GAAP Net cash provided by operating activities to Projected Non-GAAP Adjusted Free Cash Flow:
 
2020 Projected Free Cash Flow
(In millions)
 
Projected FY'20 GAAP Net cash provided by operating activities
$
205

Additions to property and equipment for cash
(15
)
Projected Non-GAAP Free Cash Flow
190

Payments associated with integration of new logistics provider
10

Projected Non-GAAP Adjusted Free Cash Flow
$
200









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