[ X ]
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the quarterly period ended June 30, 2012
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OR
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[ ]
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the transition period from ____ to _____
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Commission File Number: 001-32433
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Delaware
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20-1297589
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer Identification No.)
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90 North Broadway
Irvington, New York 10533
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(Address of Principal Executive Offices, including zip code)
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(914) 524-6810
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(Registrant's telephone number, including area code)
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Large accelerated filer
o
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|
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Accelerated filer
x
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Non-accelerated filer
o
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(Do not check if a smaller reporting company)
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Smaller reporting company
o
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PART I.
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FINANCIAL INFORMATION
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Item 1.
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Consolidated Financial Statements
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Consolidated Statements of Income and Comprehensive Income for the three months ended June 30, 2012 and 2011 (unaudited)
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Consolidated Balance Sheets as of June 30, 2012 and March 31, 2012 (unaudited)
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Consolidated Statements of Cash Flows for the three months ended June 30, 2012 and 2011 (unaudited)
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Notes to Consolidated Financial Statements
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Item 2.
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Management's Discussion and Analysis of Financial Condition and Results of Operations
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Item 3.
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Quantitative and Qualitative Disclosures About Market Risk
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Item 4.
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Controls and Procedures
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PART II.
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OTHER INFORMATION
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Item 1.
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Legal Proceedings
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Item 1A.
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Risk Factors
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Item 5.
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Other Information
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Item 6.
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Exhibits
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Signatures
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PART I
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FINANCIAL INFORMATION
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ITEM 1.
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CONSOLIDATED FINANCIAL STATEMENTS
|
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Three Months Ended June 30,
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||||||
(In thousands, except per share data)
|
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2012
|
|
2011
|
||||
Revenues
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||||
Net sales
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$
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145,920
|
|
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$
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94,307
|
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Other revenues
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1,077
|
|
|
988
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||
Total revenues
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146,997
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95,295
|
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||||
Cost of Sales
|
|
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|
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Cost of sales (exclusive of depreciation shown below)
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63,393
|
|
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45,427
|
|
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Gross profit
|
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83,604
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49,868
|
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||
|
|
|
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||||
Operating Expenses
|
|
|
|
|
|
|
||
Advertising and promotion
|
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20,325
|
|
|
10,233
|
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||
General and administrative
|
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16,151
|
|
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9,850
|
|
||
Depreciation and amortization
|
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3,295
|
|
|
2,550
|
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||
Total operating expenses
|
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39,771
|
|
|
22,633
|
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||
Operating income
|
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43,833
|
|
|
27,235
|
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||
|
|
|
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||||
Other (income) expense
|
|
|
|
|
|
|
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Interest income
|
|
(2
|
)
|
|
(2
|
)
|
||
Interest expense
|
|
19,850
|
|
|
8,580
|
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||
Gain on settlement
|
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—
|
|
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(5,063
|
)
|
||
Total other expense
|
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19,848
|
|
|
3,515
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||
Income before income taxes
|
|
23,985
|
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23,720
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Provision for income taxes
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9,330
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8,952
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|
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Net income
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|
$
|
14,655
|
|
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$
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14,768
|
|
|
|
|
|
|
||||
Earnings per share:
|
|
|
|
|
|
|
||
Basic
|
|
$
|
0.29
|
|
|
$
|
0.29
|
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Diluted
|
|
$
|
0.29
|
|
|
$
|
0.29
|
|
|
|
|
|
|
||||
Weighted average shares outstanding:
|
|
|
|
|
|
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||
Basic
|
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50,342
|
|
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50,183
|
|
||
Diluted
|
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51,106
|
|
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50,646
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||
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|
|
|
|
||||
Comprehensive income, net of tax:
|
|
|
|
|
||||
Currency translation adjustments
|
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(42
|
)
|
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(10
|
)
|
||
Total other comprehensive loss
|
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(42
|
)
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(10
|
)
|
||
Comprehensive income
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$
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14,613
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|
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$
|
14,758
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(In thousands)
Assets
|
June 30,
2012 |
|
March 31,
2012 |
||||
Current assets
|
|
|
|
||||
Cash and cash equivalents
|
$
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4,404
|
|
|
$
|
19,015
|
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Accounts receivable, net
|
69,418
|
|
|
60,228
|
|
||
Inventories
|
53,848
|
|
|
51,113
|
|
||
Deferred income tax assets
|
5,309
|
|
|
5,283
|
|
||
Prepaid expenses and other current assets
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11,390
|
|
|
11,396
|
|
||
Total current assets
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144,369
|
|
|
147,035
|
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||
|
|
|
|
||||
Property and equipment, net
|
2,279
|
|
|
1,304
|
|
||
Goodwill
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173,928
|
|
|
173,702
|
|
||
Intangible assets, net
|
1,397,414
|
|
|
1,400,522
|
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||
Other long-term assets
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34,665
|
|
|
35,713
|
|
||
Total Assets
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$
|
1,752,655
|
|
|
$
|
1,758,276
|
|
|
|
|
|
||||
Liabilities and Stockholders' Equity
|
|
|
|
|
|
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Current liabilities
|
|
|
|
|
|
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Accounts payable
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$
|
26,854
|
|
|
$
|
26,726
|
|
Accrued interest payable
|
13,853
|
|
|
13,889
|
|
||
Other accrued liabilities
|
22,483
|
|
|
23,308
|
|
||
Total current liabilities
|
63,190
|
|
|
63,923
|
|
||
|
|
|
|
||||
Long-term debt
|
|
|
|
||||
Principal amount
|
1,107,000
|
|
|
1,135,000
|
|
||
Less unamortized discount
|
(10,688
|
)
|
|
(11,092
|
)
|
||
Long-term debt, net of unamortized discount
|
1,096,312
|
|
|
1,123,908
|
|
||
|
|
|
|
||||
Deferred income tax liabilities
|
174,819
|
|
|
167,717
|
|
||
Total Liabilities
|
1,334,321
|
|
|
1,355,548
|
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||
|
|
|
|
||||
Commitments and Contingencies — Note 16
|
|
|
|
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||
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|
||||
Stockholders' Equity
|
|
|
|
|
|
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Preferred stock - $0.01 par value
|
|
|
|
|
|
||
Authorized - 5,000 shares
|
|
|
|
|
|
||
Issued and outstanding - None
|
—
|
|
|
—
|
|
||
Preferred share rights
|
283
|
|
|
283
|
|
||
Common stock - $0.01 par value
|
|
|
|
|
|
||
Authorized - 250,000 shares
|
|
|
|
|
|
||
Issued - 50,473 shares at June 30, 2012 and 50,466 shares at March 31, 2012
|
505
|
|
|
505
|
|
||
Additional paid-in capital
|
392,891
|
|
|
391,898
|
|
||
Treasury stock, at cost - 181 shares at June 30, 2012 and March 31, 2012
|
(687
|
)
|
|
(687
|
)
|
||
Accumulated other comprehensive loss, net of tax
|
(55
|
)
|
|
(13
|
)
|
||
Retained earnings
|
25,397
|
|
|
10,742
|
|
||
Total Stockholders' Equity
|
418,334
|
|
|
402,728
|
|
||
Total Liabilities and Stockholders' Equity
|
$
|
1,752,655
|
|
|
$
|
1,758,276
|
|
|
Three Months Ended June 30,
|
||||||
(In thousands)
|
2012
|
|
2011
|
||||
Operating Activities
|
|
|
|
||||
Net income
|
$
|
14,655
|
|
|
$
|
14,768
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|||
Depreciation and amortization
|
3,295
|
|
|
2,550
|
|
||
Deferred income taxes
|
7,076
|
|
|
3,186
|
|
||
Amortization of deferred financing costs
|
1,048
|
|
|
283
|
|
||
Stock-based compensation costs
|
913
|
|
|
861
|
|
||
Amortization of debt discount
|
404
|
|
|
229
|
|
||
Loss on disposal of equipment
|
21
|
|
|
—
|
|
||
Changes in operating assets and liabilities
|
|
|
|
|
|||
Accounts receivable
|
(9,214
|
)
|
|
585
|
|
||
Inventories
|
(2,748
|
)
|
|
(3,966
|
)
|
||
Prepaid expenses and other current assets
|
6
|
|
|
1,356
|
|
||
Accounts payable
|
135
|
|
|
2,562
|
|
||
Accrued liabilities
|
(849
|
)
|
|
(6,971
|
)
|
||
Net cash provided by operating activities
|
14,742
|
|
|
15,443
|
|
||
|
|
|
|
||||
Investing Activities
|
|
|
|
|
|
||
Purchases of property and equipment
|
(1,198
|
)
|
|
(76
|
)
|
||
Proceeds from sale of property and equipment
|
15
|
|
|
—
|
|
||
Acquisition of brands from GSK purchase price adjustments
|
(226
|
)
|
|
—
|
|
||
Net cash used in investing activities
|
(1,409
|
)
|
|
(76
|
)
|
||
|
|
|
|
||||
Financing Activities
|
|
|
|
|
|
||
Repayments of long-term debt
|
(45,000
|
)
|
|
(23,000
|
)
|
||
Repayments under revolving credit agreement
|
(8,000
|
)
|
|
—
|
|
||
Borrowings under revolving credit agreement
|
25,000
|
|
|
—
|
|
||
Proceeds from exercise of stock options
|
80
|
|
|
563
|
|
||
Shares surrendered as payment of tax withholding
|
—
|
|
|
(271
|
)
|
||
Net cash used in financing activities
|
(27,920
|
)
|
|
(22,708
|
)
|
||
|
|
|
|
||||
Effects of exchange rate changes on cash and cash equivalents
|
(24
|
)
|
|
(2
|
)
|
||
Decrease in cash and cash equivalents
|
(14,611
|
)
|
|
(7,343
|
)
|
||
Cash and cash equivalents - beginning of period
|
19,015
|
|
|
13,334
|
|
||
Cash and cash equivalents - end of period
|
$
|
4,404
|
|
|
$
|
5,991
|
|
|
|
|
|
||||
Interest paid
|
$
|
18,391
|
|
|
$
|
13,201
|
|
Income taxes paid
|
$
|
407
|
|
|
$
|
209
|
|
1.
|
Business and Basis of Presentation
|
|
Years
|
Machinery
|
5
|
Computer equipment
|
3
|
Furniture and fixtures
|
7
|
2.
|
Acquisitions
|
(In thousands)
|
|
GSK Brands I (January 31, 2012)
|
|
GSK Brands II (March 30, 2012)
|
|
Total
|
||||||
Inventory
|
|
$
|
14,820
|
|
|
$
|
250
|
|
|
$
|
15,070
|
|
Prepaid expenses
|
|
3,575
|
|
|
—
|
|
|
3,575
|
|
|||
Trade names
|
|
542,892
|
|
|
81,257
|
|
|
624,149
|
|
|||
Goodwill
|
|
17,401
|
|
|
2,831
|
|
|
20,232
|
|
|||
Total purchase price
|
|
$
|
578,688
|
|
|
$
|
84,338
|
|
|
$
|
663,026
|
|
(In thousands, except per share data)
|
|
Three Months Ended June 30, 2011
|
||
|
|
|
||
Revenues
|
|
$
|
146,834
|
|
Net income
|
|
$
|
19,796
|
|
|
|
|
||
Earnings per share:
|
|
|
||
Basic
|
|
$
|
0.39
|
|
|
|
|
||
Diluted
|
|
$
|
0.39
|
|
3.
|
Accounts Receivable
|
(In thousands)
|
June 30,
2012 |
|
March 31,
2012 |
||||
Components of Accounts Receivable
|
|
|
|
||||
Trade accounts receivable
|
$
|
49,536
|
|
|
$
|
55,721
|
|
Other receivables
|
23,645
|
|
|
9,368
|
|
||
|
73,181
|
|
|
65,089
|
|
||
Less allowances for discounts, returns and uncollectible accounts
|
(3,763
|
)
|
|
(4,861
|
)
|
||
Accounts receivable, net
|
$
|
69,418
|
|
|
$
|
60,228
|
|
4.
|
Inventories
|
(In thousands)
|
June 30,
2012 |
|
March 31,
2012 |
||||
Components of Inventories
|
|
|
|
||||
Packaging and raw materials
|
$
|
2,597
|
|
|
$
|
1,189
|
|
Finished goods
|
51,251
|
|
|
49,924
|
|
||
Inventories
|
$
|
53,848
|
|
|
$
|
51,113
|
|
5.
|
Property and Equipment
|
(In thousands)
|
June 30,
2012 |
|
March 31,
2012 |
||||
Components of Property and Equipment
|
|
|
|
||||
Machinery
|
$
|
1,414
|
|
|
$
|
1,454
|
|
Computer equipment
|
2,881
|
|
|
2,693
|
|
||
Furniture and fixtures
|
835
|
|
|
241
|
|
||
Leasehold improvements
|
852
|
|
|
436
|
|
||
|
5,982
|
|
|
4,824
|
|
||
Accumulated depreciation
|
(3,703
|
)
|
|
(3,520
|
)
|
||
Property and equipment, net
|
$
|
2,279
|
|
|
$
|
1,304
|
|
6.
|
Goodwill
|
(In thousands)
|
OTC
Healthcare
|
|
Household
Cleaning
|
|
Consolidated
|
||||||
|
|
|
|
|
|
||||||
Balance — March 31, 2012
|
|
|
|
|
|
||||||
Goodwill
|
$
|
296,483
|
|
|
$
|
72,549
|
|
|
$
|
369,032
|
|
Accumulated impairment losses
|
(130,170
|
)
|
|
(65,160
|
)
|
|
(195,330
|
)
|
|||
|
166,313
|
|
|
7,389
|
|
|
173,702
|
|
|||
|
|
|
|
|
|
|
|
|
|||
Additions
|
226
|
|
|
—
|
|
|
226
|
|
|||
|
|
|
|
|
|
|
|
|
|||
Balance — June 30, 2012
|
|
|
|
|
|
|
|
|
|||
Goodwill
|
296,709
|
|
|
72,549
|
|
|
369,258
|
|
|||
Accumulated impairment losses
|
(130,170
|
)
|
|
(65,160
|
)
|
|
(195,330
|
)
|
|||
|
$
|
166,539
|
|
|
$
|
7,389
|
|
|
$
|
173,928
|
|
7.
|
Intangible Assets
|
(In thousands)
|
Indefinite
Lived
Trademarks
|
|
Finite Lived
Trademarks
|
|
Non Compete
Agreement
|
|
Totals
|
||||||||
Carrying Amounts
|
|
|
|
|
|
|
|
||||||||
Balance — March 31, 2012
|
$
|
1,245,414
|
|
|
$
|
217,512
|
|
|
$
|
158
|
|
|
$
|
1,463,084
|
|
Additions
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Balance — June 30, 2012
|
$
|
1,245,414
|
|
|
$
|
217,512
|
|
|
$
|
158
|
|
|
$
|
1,463,084
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Accumulated Amortization
|
|
|
|
|
|
|
|
|
|
|
|
||||
Balance — March 31, 2012
|
$
|
—
|
|
|
$
|
62,404
|
|
|
$
|
158
|
|
|
$
|
62,562
|
|
Additions
|
—
|
|
|
3,108
|
|
|
—
|
|
|
3,108
|
|
||||
Balance — June 30, 2012
|
$
|
—
|
|
|
$
|
65,512
|
|
|
$
|
158
|
|
|
$
|
65,670
|
|
|
|
|
|
|
|
|
|
||||||||
Intangible assets, net - June 30, 2012
|
$
|
1,245,414
|
|
|
$
|
152,000
|
|
|
$
|
—
|
|
|
$
|
1,397,414
|
|
8.
|
Other Accrued Liabilities
|
(In thousands)
|
June 30,
2012 |
|
March 31,
2012 |
||||
|
|
|
|
||||
Accrued marketing costs
|
$
|
15,118
|
|
|
$
|
10,554
|
|
Accrued payroll
|
2,684
|
|
|
7,181
|
|
||
Accrued commissions
|
336
|
|
|
415
|
|
||
Accrued income taxes
|
—
|
|
|
577
|
|
||
Accrued professional fees
|
3,714
|
|
|
3,821
|
|
||
Accrued severance
|
385
|
|
|
461
|
|
||
Accrued other
|
246
|
|
|
299
|
|
||
|
$
|
22,483
|
|
|
$
|
23,308
|
|
9.
|
Long-Term Debt
|
(In thousands, except percentages)
|
|
June 30,
2012 |
|
March 31,
2012 |
||||
2012 Senior Notes bear interest at 8.125%, with interest only payable on February 1 and August 1 of each year. The 2012 Senior Notes mature on February 1, 2020.
|
|
$
|
250,000
|
|
|
$
|
250,000
|
|
2012 Term Loan bears interest at the Company's option at either a base rate plus applicable margin with a floor of 2.25% or LIBOR with a floor of 1.25%. Quarterly payments each equal to 0.25% of the original principal amount of the term loans are due, with the balance due on January 31, 2019.
|
|
590,000
|
|
|
635,000
|
|
||
2012 ABL Revolver bears interest at the Company's option at either a base rate plus applicable margin or LIBOR plus applicable margin. Any unpaid balance is due on January 31, 2017.
|
|
17,000
|
|
|
—
|
|
||
2010 Senior Notes bear interest at 8.25%, with interest only payable on April 1 and October 1 of each year. The 2010 Senior Notes mature on April 1, 2018.
|
|
250,000
|
|
|
250,000
|
|
||
|
|
1,107,000
|
|
|
1,135,000
|
|
||
Current portion of long-term debt
|
|
—
|
|
|
—
|
|
||
|
|
1,107,000
|
|
|
1,135,000
|
|
||
Less: unamortized discount
|
|
(10,688
|
)
|
|
(11,092
|
)
|
||
Long-term debt, net of unamortized discount
|
|
$
|
1,096,312
|
|
|
$
|
1,123,908
|
|
10.
|
Fair Value Measurements
|
11.
|
Stockholders' Equity
|
12.
|
Accumulated Other Comprehensive Income (Loss)
|
|
June 30,
|
|
March 31,
|
||||
(In thousands)
|
2012
|
|
2012
|
||||
Components of Accumulated Other Comprehensive Loss
|
|
|
|
||||
Cumulative translation adjustment
|
$
|
(55
|
)
|
|
$
|
(13
|
)
|
Total accumulated other comprehensive loss
|
$
|
(55
|
)
|
|
$
|
(13
|
)
|
|
Three Months Ended June 30,
|
||||||
(In thousands)
|
2012
|
|
2011
|
||||
Components of Comprehensive Income
|
|
|
|
||||
Net income
|
$
|
14,655
|
|
|
$
|
14,768
|
|
Translation adjustments
|
(42
|
)
|
|
(10
|
)
|
||
Comprehensive Income
|
$
|
14,613
|
|
|
$
|
14,758
|
|
13.
|
Earnings Per Share
|
|
|
Three Months Ended June 30,
|
||||||
(In thousands, except per share data)
|
|
2012
|
|
2011
|
||||
Numerator
|
|
|
|
|
||||
Net income
|
|
$
|
14,655
|
|
|
$
|
14,768
|
|
|
|
|
|
|
|
|
||
Denominator
|
|
|
|
|
|
|
||
Denominator for basic earnings per share — weighted average shares
|
|
50,342
|
|
|
50,183
|
|
||
Dilutive effect of unvested restricted common stock (including restricted stock units) and options issued to employees and directors
|
|
764
|
|
|
463
|
|
||
Denominator for diluted earnings per share
|
|
51,106
|
|
|
50,646
|
|
||
|
|
|
|
|
|
|
||
Earnings per Common Share:
|
|
|
|
|
|
|
||
Basic net earnings per share
|
|
$
|
0.29
|
|
|
$
|
0.29
|
|
|
|
|
|
|
|
|
||
Diluted net earnings per share
|
|
$
|
0.29
|
|
|
$
|
0.29
|
|
14.
|
Share-Based Compensation
|
Restricted Shares
|
|
Shares
(in thousands)
|
|
Weighted-
Average
Grant-Date
Fair Value
|
|||
Three months ended June 30, 2011:
|
|
|
|
|
|||
Nonvested at March 31, 2011
|
|
275.4
|
|
|
$
|
8.46
|
|
Granted
|
|
106.1
|
|
|
11.22
|
|
|
Vested and issued
|
|
(76.4
|
)
|
|
10.91
|
|
|
Forfeited
|
|
(7.6
|
)
|
|
10.17
|
|
|
Outstanding at June 30, 2011
|
|
297.5
|
|
|
8.77
|
|
|
Vested at June 30, 2011
|
|
29.2
|
|
|
6.84
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Three months ended June 30, 2012:
|
|
|
|
|
|||
Nonvested at March 31, 2012
|
|
363.4
|
|
|
9.92
|
|
|
Granted
|
|
123.8
|
|
|
13.5
|
|
|
Vested and issued
|
|
—
|
|
|
—
|
|
|
Forfeited
|
|
(3.0
|
)
|
|
10.11
|
|
|
Outstanding at June 30, 2012
|
|
484.2
|
|
|
10.84
|
|
|
Vested at June 30, 2012
|
|
54.0
|
|
|
7.40
|
|
|
Three Months Ended June 30,
|
||||||
|
2012
|
|
2011
|
||||
Expected volatility
|
43.8
|
%
|
|
53.0
|
%
|
||
Expected dividends
|
$
|
—
|
|
|
$
|
—
|
|
Expected term in years
|
6.5
|
|
|
6.5
|
|
||
Risk-free rate
|
1.2
|
%
|
|
2.4
|
%
|
Options
|
|
Shares
(in thousands)
|
|
Weighted-
Average
Exercise
Price
|
|
Weighted-
Average
Remaining
Contractual
Term
|
|
Aggregate
Intrinsic
Value
(in thousands)
|
|||||
Three months ended June 30, 2011:
|
|
|
|
|
|
|
|
|
|||||
Outstanding at March 31, 2011
|
|
1,621.5
|
|
|
$
|
8.19
|
|
|
|
|
|
||
Granted
|
|
308.1
|
|
|
11.27
|
|
|
|
|
|
|||
Exercised
|
|
(53.3
|
)
|
|
10.57
|
|
|
|
|
|
|||
Forfeited or expired
|
|
(8.8
|
)
|
|
10.15
|
|
|
|
|
|
|||
Outstanding at June 30, 2011
|
|
1,867.5
|
|
|
8.62
|
|
|
8.2
|
|
$
|
7,880.0
|
|
|
Exercisable at June 30, 2011
|
|
490.1
|
|
|
9.34
|
|
|
7.1
|
|
1,716.0
|
|
||
|
|
|
|
|
|
|
|
|
|||||
Three months ended June 30, 2012:
|
|
|
|
|
|
|
|
|
|
|
|
||
Outstanding at March 31, 2012
|
|
1,745.4
|
|
|
8.44
|
|
|
|
|
|
|||
Granted
|
|
423.0
|
|
|
13.24
|
|
|
|
|
|
|||
Exercised
|
|
(6.8
|
)
|
|
11.84
|
|
|
|
|
|
|||
Forfeited or expired
|
|
(5.7
|
)
|
|
10.12
|
|
|
|
|
|
|||
Outstanding at June 30, 2012
|
|
2,155.9
|
|
|
9.37
|
|
|
7.9
|
|
13,884.8
|
|
||
Exercisable at June 30, 2012
|
|
802.7
|
|
|
8.74
|
|
|
7.2
|
|
5,679.0
|
|
15.
|
Income Taxes
|
16.
|
Commitments and Contingencies
|
(In thousands)
|
Facilities
|
|
Equipment
|
|
Total
|
|||||||
Year Ending March 31,
|
|
|
|
|
|
|||||||
2013 (Remaining nine months ending March 31, 2013)
|
$
|
904
|
|
|
$
|
37
|
|
|
$
|
941
|
|
|
2014
|
1,613
|
|
|
23
|
|
|
1,636
|
|
||||
2015
|
1,018
|
|
|
—
|
|
|
1,018
|
|
||||
2016
|
991
|
|
|
—
|
|
|
991
|
|
||||
2017
|
1,023
|
|
|
—
|
|
|
1,023
|
|
||||
Thereafter
|
1,044
|
|
|
—
|
|
|
1,044
|
|
||||
|
$
|
6,593
|
|
|
$
|
60
|
|
|
$
|
6,653
|
|
(In thousands)
|
|
|||
Year Ending March 31,
|
Amount
|
|||
2013 (Remaining nine months ending March 31, 2013)
|
$
|
6,385
|
|
|
2014
|
1,136
|
|
||
2015
|
1,105
|
|
||
2016
|
1,074
|
|
||
2017
|
1,044
|
|
||
Thereafter
|
2,555
|
|
||
|
$
|
13,299
|
|
17.
|
Concentrations of Risk
|
18.
|
Business Segments
|
|
Three Months Ended June 30, 2012
|
||||||||||
(In thousands)
|
OTC
Healthcare
|
|
Household
Cleaning
|
|
Consolidated
|
||||||
Net sales
|
$
|
126,004
|
|
|
$
|
19,916
|
|
|
$
|
145,920
|
|
Other revenues
|
181
|
|
|
896
|
|
|
1,077
|
|
|||
Total revenues
|
126,185
|
|
|
20,812
|
|
|
146,997
|
|
|||
Cost of sales
|
47,399
|
|
|
15,994
|
|
|
63,393
|
|
|||
Gross profit
|
78,786
|
|
|
4,818
|
|
|
83,604
|
|
|||
Advertising and promotion
|
17,853
|
|
|
2,472
|
|
|
20,325
|
|
|||
Contribution margin
|
$
|
60,933
|
|
|
$
|
2,346
|
|
|
63,279
|
|
|
Other operating expenses
|
|
|
|
|
|
|
19,446
|
|
|||
Operating income
|
|
|
|
|
|
|
43,833
|
|
|||
Other expense
|
|
|
|
|
|
|
19,848
|
|
|||
Income before income taxes
|
|
|
|
|
23,985
|
|
|||||
Provision for income taxes
|
|
|
|
|
|
|
9,330
|
|
|||
Net income
|
|
|
|
|
|
|
$
|
14,655
|
|
|
Three Months Ended June 30, 2011
|
||||||||||
(In thousands)
|
OTC
Healthcare
|
|
Household
Cleaning
|
|
Consolidated
|
||||||
Net sales
|
$
|
71,003
|
|
|
$
|
23,304
|
|
|
$
|
94,307
|
|
Other revenues
|
199
|
|
|
789
|
|
|
988
|
|
|||
Total revenues
|
71,202
|
|
|
24,093
|
|
|
95,295
|
|
|||
Cost of sales
|
28,784
|
|
|
16,643
|
|
|
45,427
|
|
|||
Gross profit
|
42,418
|
|
|
7,450
|
|
|
49,868
|
|
|||
Advertising and promotion
|
8,421
|
|
|
1,812
|
|
|
10,233
|
|
|||
Contribution margin
|
$
|
33,997
|
|
|
$
|
5,638
|
|
|
39,635
|
|
|
Other operating expenses
|
|
|
|
|
|
|
12,400
|
|
|||
Operating income
|
|
|
|
|
|
|
27,235
|
|
|||
Other expense
|
|
|
|
|
|
|
3,515
|
|
|||
Income before income taxes
|
|
|
|
|
23,720
|
|
|||||
Provision for income taxes
|
|
|
|
|
|
|
8,952
|
|
|||
Net income
|
|
|
|
|
|
|
$
|
14,768
|
|
|
|
Three Months Ended June 30,
|
|||
(In thousands)
|
|
2012
|
2011
|
||
Analgesics
|
|
27,675
|
|
621
|
|
Cough & Cold
|
|
23,804
|
|
20,663
|
|
Gastrointestinal
|
|
24,204
|
|
5,364
|
|
Eye & Ear Care
|
|
21,707
|
|
17,669
|
|
Dermatologicals
|
|
14,482
|
|
14,916
|
|
Oral Care
|
|
10,530
|
|
10,887
|
|
Other OTC
|
|
3,783
|
|
1,082
|
|
Total OTC Healthcare Segment
|
|
126,185
|
|
71,202
|
|
Household Cleaning Segment
|
|
20,812
|
|
24,093
|
|
Consolidated Net Revenues
|
|
146,997
|
|
95,295
|
|
(In thousands)
|
OTC
Healthcare
|
|
Household
Cleaning
|
|
Consolidated
|
||||||
Goodwill
|
$
|
166,539
|
|
|
$
|
7,389
|
|
|
$
|
173,928
|
|
|
|
|
|
|
|
|
|||||
Intangible assets
|
|
|
|
|
|
|
|||||
Indefinite-lived
|
1,125,594
|
|
|
119,820
|
|
|
1,245,414
|
|
|||
Finite-lived
|
122,780
|
|
|
29,220
|
|
|
152,000
|
|
|||
|
1,248,374
|
|
|
149,040
|
|
|
1,397,414
|
|
|||
|
|
|
|
|
|
|
|
|
|||
|
$
|
1,414,913
|
|
|
$
|
156,429
|
|
|
$
|
1,571,342
|
|
19.
|
Gain on Settlement
|
(In thousands)
|
|
Prestige
Brands
Holdings,
Inc.
|
|
Prestige
Brands,
Inc.,
the issuer
|
|
Combined
Subsidiary
Guarantors
|
|
Combined
Non-
Guarantor
Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||||
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net sales
|
|
$
|
—
|
|
|
$
|
23,221
|
|
|
$
|
121,658
|
|
|
$
|
1,041
|
|
|
$
|
—
|
|
|
$
|
145,920
|
|
Other revenues
|
|
—
|
|
|
68
|
|
|
1,061
|
|
|
475
|
|
|
(527
|
)
|
|
1,077
|
|
||||||
Total revenues
|
|
—
|
|
|
23,289
|
|
|
122,719
|
|
|
1,516
|
|
|
(527
|
)
|
|
146,997
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Cost of Sales
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Cost of sales (exclusive of depreciation shown below)
|
|
—
|
|
|
8,441
|
|
|
55,035
|
|
|
444
|
|
|
(527
|
)
|
|
63,393
|
|
||||||
Gross profit
|
|
—
|
|
|
14,848
|
|
|
67,684
|
|
|
1,072
|
|
|
—
|
|
|
83,604
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Advertising and promotion
|
|
1
|
|
|
3,106
|
|
|
16,920
|
|
|
298
|
|
|
—
|
|
|
20,325
|
|
||||||
General and administrative
|
|
1,829
|
|
|
1,730
|
|
|
12,149
|
|
|
443
|
|
|
—
|
|
|
16,151
|
|
||||||
Depreciation and amortization
|
|
132
|
|
|
141
|
|
|
3,005
|
|
|
17
|
|
|
—
|
|
|
3,295
|
|
||||||
Total operating expenses
|
|
1,962
|
|
|
4,977
|
|
|
32,074
|
|
|
758
|
|
|
—
|
|
|
39,771
|
|
||||||
Operating income (loss)
|
|
(1,962
|
)
|
|
9,871
|
|
|
35,610
|
|
|
314
|
|
|
—
|
|
|
43,833
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Other (income) expense
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Interest income
|
|
(12,128
|
)
|
|
(10,960
|
)
|
|
48
|
|
|
(48
|
)
|
|
23,086
|
|
|
(2
|
)
|
||||||
Interest expense
|
|
8,666
|
|
|
28,516
|
|
|
5,754
|
|
|
—
|
|
|
(23,086
|
)
|
|
19,850
|
|
||||||
Equity in income of subsidiaries
|
|
(9,402
|
)
|
|
(19,878
|
)
|
|
—
|
|
|
—
|
|
|
29,280
|
|
|
—
|
|
||||||
Total other (income) expense
|
|
(12,864
|
)
|
|
(2,322
|
)
|
|
5,802
|
|
|
(48
|
)
|
|
29,280
|
|
|
19,848
|
|
||||||
Income (loss) before income taxes
|
|
10,902
|
|
|
12,193
|
|
|
29,808
|
|
|
362
|
|
|
(29,280
|
)
|
|
23,985
|
|
||||||
Provision (benefit) for income taxes
|
|
(3,753
|
)
|
|
1,361
|
|
|
11,554
|
|
|
168
|
|
|
—
|
|
|
9,330
|
|
||||||
Net income (loss)
|
|
$
|
14,655
|
|
|
$
|
10,832
|
|
|
$
|
18,254
|
|
|
$
|
194
|
|
|
$
|
(29,280
|
)
|
|
$
|
14,655
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Comprehensive income, net of tax:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Currency translation adjustments
|
|
(42
|
)
|
|
—
|
|
|
—
|
|
|
(42
|
)
|
|
42
|
|
|
(42
|
)
|
||||||
Total other comprehensive (loss) income
|
|
(42
|
)
|
|
—
|
|
|
—
|
|
|
(42
|
)
|
|
42
|
|
|
(42
|
)
|
||||||
Comprehensive income (loss)
|
|
$
|
14,613
|
|
|
$
|
10,832
|
|
|
$
|
18,254
|
|
|
$
|
152
|
|
|
$
|
(29,238
|
)
|
|
$
|
14,613
|
|
(In thousands)
|
|
Prestige
Brands
Holdings,
Inc.
|
|
Prestige
Brands,
Inc.,
the issuer
|
|
Combined
Subsidiary
Guarantors
|
|
Combined
Non-
Guarantor
Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||||
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net sales
|
|
$
|
—
|
|
|
$
|
21,621
|
|
|
$
|
71,883
|
|
|
$
|
803
|
|
|
$
|
—
|
|
|
$
|
94,307
|
|
Other revenues
|
|
—
|
|
|
60
|
|
|
424
|
|
|
504
|
|
|
—
|
|
|
988
|
|
||||||
Total revenues
|
|
—
|
|
|
21,681
|
|
|
72,307
|
|
|
1,307
|
|
|
—
|
|
|
95,295
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Cost of Sales
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Cost of sales (exclusive of depreciation shown below)
|
|
—
|
|
|
7,994
|
|
|
37,112
|
|
|
321
|
|
|
—
|
|
|
45,427
|
|
||||||
Gross profit
|
|
—
|
|
|
13,687
|
|
|
35,195
|
|
|
986
|
|
|
—
|
|
|
49,868
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Advertising and promotion
|
|
—
|
|
|
2,562
|
|
|
7,476
|
|
|
195
|
|
|
—
|
|
|
10,233
|
|
||||||
General and administrative
|
|
(182
|
)
|
|
2,782
|
|
|
7,253
|
|
|
(3
|
)
|
|
—
|
|
|
9,850
|
|
||||||
Depreciation and amortization
|
|
137
|
|
|
141
|
|
|
2,253
|
|
|
19
|
|
|
—
|
|
|
2,550
|
|
||||||
Total operating expenses
|
|
(45
|
)
|
|
5,485
|
|
|
16,982
|
|
|
211
|
|
|
—
|
|
|
22,633
|
|
||||||
Operating income (loss)
|
|
45
|
|
|
8,202
|
|
|
18,213
|
|
|
775
|
|
|
—
|
|
|
27,235
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Other (income) expense
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Interest income
|
|
(12,888
|
)
|
|
(10,274
|
)
|
|
54
|
|
|
(54
|
)
|
|
23,160
|
|
|
(2
|
)
|
||||||
Interest expense
|
|
8,726
|
|
|
17,305
|
|
|
5,709
|
|
|
—
|
|
|
(23,160
|
)
|
|
8,580
|
|
||||||
Gain on settlement
|
|
(5,063
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(5,063
|
)
|
||||||
Equity in income of subsidiaries
|
|
(8,929
|
)
|
|
(7,937
|
)
|
|
—
|
|
|
—
|
|
|
16,866
|
|
|
—
|
|
||||||
Total other (income) expense
|
|
(18,154
|
)
|
|
(906
|
)
|
|
5,763
|
|
|
(54
|
)
|
|
16,866
|
|
|
3,515
|
|
||||||
Income (loss) before income taxes
|
|
18,199
|
|
|
9,108
|
|
|
12,450
|
|
|
829
|
|
|
(16,866
|
)
|
|
23,720
|
|
||||||
Provision (benefit) for income taxes
|
|
3,431
|
|
|
397
|
|
|
4,934
|
|
|
190
|
|
|
—
|
|
|
8,952
|
|
||||||
Net income (loss)
|
|
14,768
|
|
|
8,711
|
|
|
7,516
|
|
|
639
|
|
|
(16,866
|
)
|
|
14,768
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Comprehensive income, net of tax:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Currency translation adjustments
|
|
(10
|
)
|
|
—
|
|
|
—
|
|
|
(10
|
)
|
|
10
|
|
|
(10
|
)
|
||||||
Total other comprehensive (loss) income
|
|
(10
|
)
|
|
—
|
|
|
—
|
|
|
(10
|
)
|
|
10
|
|
|
(10
|
)
|
||||||
Comprehensive income (loss)
|
|
$
|
14,758
|
|
|
$
|
8,711
|
|
|
$
|
7,516
|
|
|
$
|
629
|
|
|
$
|
(16,856
|
)
|
|
$
|
14,758
|
|
(In thousands)
|
|
Prestige
Brands
Holdings,
Inc.
|
|
Prestige
Brands,
Inc.,
the issuer
|
|
Combined
Subsidiary
Guarantors
|
|
Combined
Non-
Guarantor
Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Current assets
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Cash and cash equivalents
|
|
$
|
3,568
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
836
|
|
|
$
|
—
|
|
|
$
|
4,404
|
|
Accounts receivable, net
|
|
30
|
|
|
11,238
|
|
|
57,248
|
|
|
902
|
|
|
—
|
|
|
69,418
|
|
||||||
Inventories
|
|
—
|
|
|
7,505
|
|
|
45,967
|
|
|
376
|
|
|
—
|
|
|
53,848
|
|
||||||
Deferred income tax assets
|
|
336
|
|
|
732
|
|
|
4,241
|
|
|
—
|
|
|
—
|
|
|
5,309
|
|
||||||
Prepaid expenses and other current assets
|
|
7,567
|
|
|
94
|
|
|
3,721
|
|
|
8
|
|
|
—
|
|
|
11,390
|
|
||||||
Total current assets
|
|
11,501
|
|
|
19,569
|
|
|
111,177
|
|
|
2,122
|
|
|
—
|
|
|
144,369
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Property and equipment, net
|
|
2,000
|
|
|
15
|
|
|
264
|
|
|
—
|
|
|
—
|
|
|
2,279
|
|
||||||
Goodwill
|
|
—
|
|
|
66,007
|
|
|
107,921
|
|
|
—
|
|
|
—
|
|
|
173,928
|
|
||||||
Intangible assets, net
|
|
—
|
|
|
193,798
|
|
|
1,203,193
|
|
|
423
|
|
|
—
|
|
|
1,397,414
|
|
||||||
Other long-term assets
|
|
—
|
|
|
34,665
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
34,665
|
|
||||||
Intercompany receivable
|
|
699,033
|
|
|
1,427,813
|
|
|
329,140
|
|
|
7,371
|
|
|
(2,463,357
|
)
|
|
—
|
|
||||||
Investment in subsidiary
|
|
1,361,960
|
|
|
1,192,329
|
|
|
—
|
|
|
—
|
|
|
(2,554,289
|
)
|
|
—
|
|
||||||
Total Assets
|
|
$
|
2,074,494
|
|
|
$
|
2,934,196
|
|
|
$
|
1,751,695
|
|
|
$
|
9,916
|
|
|
$
|
(5,017,646
|
)
|
|
$
|
1,752,655
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Liabilities and Stockholders' Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Current liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Accounts payable
|
|
$
|
1,578
|
|
|
$
|
5,662
|
|
|
$
|
19,156
|
|
|
$
|
458
|
|
|
$
|
—
|
|
|
$
|
26,854
|
|
Accrued interest payable
|
|
—
|
|
|
13,853
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
13,853
|
|
||||||
Other accrued liabilities
|
|
7,029
|
|
|
2,006
|
|
|
12,365
|
|
|
1,083
|
|
|
—
|
|
|
22,483
|
|
||||||
Total current liabilities
|
|
8,607
|
|
|
21,521
|
|
|
31,521
|
|
|
1,541
|
|
|
—
|
|
|
63,190
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Long-term debt
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Principal amount
|
|
—
|
|
|
1,107,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,107,000
|
|
||||||
Less unamortized discount
|
|
—
|
|
|
(10,688
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(10,688
|
)
|
||||||
Long-term debt, net of unamortized discount
|
|
—
|
|
|
1,096,312
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,096,312
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Deferred income tax liabilities
|
|
—
|
|
|
51,735
|
|
|
123,007
|
|
|
77
|
|
|
—
|
|
|
174,819
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Intercompany payable
|
|
1,647,553
|
|
|
473,660
|
|
|
342,092
|
|
|
52
|
|
|
(2,463,357
|
)
|
|
—
|
|
||||||
Total Liabilities
|
|
1,656,160
|
|
|
1,643,228
|
|
|
496,620
|
|
|
1,670
|
|
|
(2,463,357
|
)
|
|
1,334,321
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Stockholders' Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Preferred share rights
|
|
283
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
283
|
|
||||||
Common stock
|
|
505
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
505
|
|
||||||
Additional paid-in capital
|
|
392,891
|
|
|
1,280,832
|
|
|
1,239,610
|
|
|
1,111
|
|
|
(2,521,553
|
)
|
|
392,891
|
|
||||||
Treasury stock, at cost - 181 shares
|
|
(687
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(687
|
)
|
||||||
Accumulated other comprehensive loss, net of tax
|
|
(55
|
)
|
|
—
|
|
|
—
|
|
|
(55
|
)
|
|
55
|
|
|
(55
|
)
|
||||||
Retained earnings (accumulated deficit)
|
|
25,397
|
|
|
10,136
|
|
|
15,465
|
|
|
7,190
|
|
|
(32,791
|
)
|
|
25,397
|
|
||||||
Total Stockholders' Equity
|
|
418,334
|
|
|
1,290,968
|
|
|
1,255,075
|
|
|
8,246
|
|
|
(2,554,289
|
)
|
|
418,334
|
|
||||||
Total Liabilities and Stockholders' Equity
|
|
$
|
2,074,494
|
|
|
$
|
2,934,196
|
|
|
$
|
1,751,695
|
|
|
$
|
9,916
|
|
|
$
|
(5,017,646
|
)
|
|
$
|
1,752,655
|
|
(In thousands)
|
|
Prestige
Brands
Holdings,
Inc.
|
|
Prestige
Brands,
Inc.,
the issuer
|
|
Combined
Subsidiary
Guarantors
|
|
Combined
Non-
Guarantor
Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Current assets
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Cash and cash equivalents
|
|
$
|
18,221
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
794
|
|
|
$
|
—
|
|
|
$
|
19,015
|
|
Accounts receivable, net
|
|
25
|
|
|
13,502
|
|
|
45,954
|
|
|
747
|
|
|
—
|
|
|
60,228
|
|
||||||
Inventories
|
|
—
|
|
|
8,098
|
|
|
42,334
|
|
|
681
|
|
|
—
|
|
|
51,113
|
|
||||||
Deferred income tax assets
|
|
356
|
|
|
849
|
|
|
4,078
|
|
|
—
|
|
|
—
|
|
|
5,283
|
|
||||||
Prepaid expenses and other current assets
|
|
8,102
|
|
|
56
|
|
|
1,942
|
|
|
1,296
|
|
|
—
|
|
|
11,396
|
|
||||||
Total current assets
|
|
26,704
|
|
|
22,505
|
|
|
94,308
|
|
|
3,518
|
|
|
—
|
|
|
147,035
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Property and equipment, net
|
|
935
|
|
|
22
|
|
|
345
|
|
|
2
|
|
|
—
|
|
|
1,304
|
|
||||||
Goodwill
|
|
—
|
|
|
66,007
|
|
|
107,695
|
|
|
—
|
|
|
—
|
|
|
173,702
|
|
||||||
Intangible assets, net
|
|
—
|
|
|
193,932
|
|
|
1,206,213
|
|
|
377
|
|
|
—
|
|
|
1,400,522
|
|
||||||
Other long-term assets
|
|
—
|
|
|
35,713
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
35,713
|
|
||||||
Intercompany receivable
|
|
698,529
|
|
|
1,449,005
|
|
|
310,499
|
|
|
5,935
|
|
|
(2,463,968
|
)
|
|
—
|
|
||||||
Investment in subsidiary
|
|
1,340,858
|
|
|
1,208,775
|
|
|
—
|
|
|
—
|
|
|
(2,549,633
|
)
|
|
—
|
|
||||||
Total Assets
|
|
$
|
2,067,026
|
|
|
$
|
2,975,959
|
|
|
$
|
1,719,060
|
|
|
$
|
9,832
|
|
|
$
|
(5,013,601
|
)
|
|
$
|
1,758,276
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Liabilities and Stockholders' Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Current liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Accounts payable
|
|
$
|
4,531
|
|
|
$
|
4,816
|
|
|
$
|
17,008
|
|
|
$
|
371
|
|
|
$
|
—
|
|
|
$
|
26,726
|
|
Accrued interest payable
|
|
—
|
|
|
13,889
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
13,889
|
|
||||||
Other accrued liabilities
|
|
11,761
|
|
|
1,685
|
|
|
8,890
|
|
|
972
|
|
|
—
|
|
|
23,308
|
|
||||||
Total current liabilities
|
|
16,292
|
|
|
20,390
|
|
|
25,898
|
|
|
1,343
|
|
|
—
|
|
|
63,923
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Long-term debt
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Principal amount
|
|
—
|
|
|
1,135,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,135,000
|
|
||||||
Less unamortized discount
|
|
—
|
|
|
(11,092
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(11,092
|
)
|
||||||
Long-term debt, net of unamortized discount
|
|
—
|
|
|
1,123,908
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,123,908
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Deferred income tax liabilities
|
|
(1
|
)
|
|
50,945
|
|
|
116,690
|
|
|
83
|
|
|
—
|
|
|
167,717
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Intercompany payable
|
|
1,648,007
|
|
|
475,998
|
|
|
339,651
|
|
|
312
|
|
|
(2,463,968
|
)
|
|
—
|
|
||||||
Total Liabilities
|
|
1,664,298
|
|
|
1,671,241
|
|
|
482,239
|
|
|
1,738
|
|
|
(2,463,968
|
)
|
|
1,355,548
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Stockholders' Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Preferred share rights
|
|
283
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
283
|
|
||||||
Common stock
|
|
505
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
505
|
|
||||||
Additional paid-in capital
|
|
391,898
|
|
|
1,280,832
|
|
|
1,239,610
|
|
|
1,111
|
|
|
(2,521,553
|
)
|
|
391,898
|
|
||||||
Treasury stock, at cost - 181 shares
|
|
(687
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(687
|
)
|
||||||
Accumulated other comprehensive loss, net of tax
|
|
(13
|
)
|
|
—
|
|
|
—
|
|
|
(13
|
)
|
|
13
|
|
|
(13
|
)
|
||||||
Retained earnings (accumulated deficit)
|
|
10,742
|
|
|
23,886
|
|
|
(2,789
|
)
|
|
6,996
|
|
|
(28,093
|
)
|
|
10,742
|
|
||||||
Total Stockholders' Equity
|
|
402,728
|
|
|
1,304,718
|
|
|
1,236,821
|
|
|
8,094
|
|
|
(2,549,633
|
)
|
|
402,728
|
|
||||||
Total Liabilities and Stockholders' Equity
|
|
$
|
2,067,026
|
|
|
$
|
2,975,959
|
|
|
$
|
1,719,060
|
|
|
$
|
9,832
|
|
|
$
|
(5,013,601
|
)
|
|
$
|
1,758,276
|
|
(In thousands)
|
|
Prestige
Brands
Holdings,
Inc.
|
|
Prestige
Brands,
Inc.,
the issuer
|
|
Combined
Subsidiary
Guarantors
|
|
Combined
Non-
Guarantor
Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||||||||
Operating Activities
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Net income (loss)
|
|
$
|
14,655
|
|
|
$
|
10,832
|
|
|
$
|
18,254
|
|
|
$
|
194
|
|
|
$
|
(29,280
|
)
|
|
$
|
14,655
|
|
||||
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Depreciation and amortization
|
|
132
|
|
|
141
|
|
|
3,005
|
|
|
17
|
|
|
—
|
|
|
3,295
|
|
||||||||||
Deferred income taxes
|
|
21
|
|
|
907
|
|
|
6,154
|
|
|
(6
|
)
|
|
—
|
|
|
7,076
|
|
||||||||||
Amortization of deferred financing costs
|
|
—
|
|
|
1,048
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,048
|
|
||||||||||
Stock-based compensation costs
|
|
913
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
913
|
|
||||||||||
Amortization of debt discount
|
|
—
|
|
|
404
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
404
|
|
||||||||||
Loss on disposal of equipment
|
|
—
|
|
|
—
|
|
|
21
|
|
|
—
|
|
|
—
|
|
|
21
|
|
||||||||||
Equity in income of subsidiaries
|
|
(9,402
|
)
|
|
(19,878
|
)
|
|
—
|
|
|
—
|
|
|
29,280
|
|
|
—
|
|
||||||||||
Changes in operating assets and liabilities, net of effects from acquisitions:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Accounts receivable
|
|
(5
|
)
|
|
2,264
|
|
|
(11,294
|
)
|
|
(179
|
)
|
|
—
|
|
|
(9,214
|
)
|
||||||||||
Inventories
|
|
—
|
|
|
593
|
|
|
(3,633
|
)
|
|
292
|
|
|
—
|
|
|
(2,748
|
)
|
||||||||||
Prepaid expenses and other current assets
|
|
535
|
|
|
(38
|
)
|
|
(1,779
|
)
|
|
1,288
|
|
|
—
|
|
|
6
|
|
||||||||||
Accounts payable
|
|
(2,953
|
)
|
|
846
|
|
|
2,148
|
|
|
94
|
|
|
—
|
|
|
135
|
|
||||||||||
Accrued liabilities
|
|
(7,924
|
)
|
|
493
|
|
|
6,459
|
|
|
123
|
|
|
—
|
|
|
(849
|
)
|
||||||||||
Net cash provided by (used in) operating activities
|
|
(4,028
|
)
|
|
(2,388
|
)
|
|
19,335
|
|
|
1,823
|
|
|
—
|
|
|
14,742
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Investing Activities
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Purchases of property and equipment
|
|
(1,198
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,198
|
)
|
||||||||||
Proceeds from sale of property and equipment
|
|
—
|
|
|
—
|
|
|
15
|
|
|
—
|
|
|
—
|
|
|
15
|
|
||||||||||
Acquisition of GSK purchase price adjustments
|
|
—
|
|
|
—
|
|
|
(226
|
)
|
|
—
|
|
|
—
|
|
|
(226
|
)
|
||||||||||
Intercompany activity, net
|
|
(226
|
)
|
|
—
|
|
|
226
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||||
Net cash provided by (used in) investing activities
|
|
(1,424
|
)
|
|
—
|
|
—
|
|
15
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(1,409
|
)
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Financing Activities
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Repayments of long-term debt
|
|
—
|
|
|
(45,000
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(45,000
|
)
|
||||||||||
Repayments under revolving credit agreement
|
|
—
|
|
|
(8,000
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(8,000
|
)
|
||||||||||
Borrowings under revolving credit agreement
|
|
—
|
|
|
25,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
25,000
|
|
||||||||||
Proceeds from exercise of stock options
|
|
80
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
80
|
|
||||||||||
Shares surrendered as payment of tax withholding
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||||
Intercompany activity, net
|
|
(9,281
|
)
|
|
30,388
|
|
|
(19,350
|
)
|
|
(1,757
|
)
|
|
—
|
|
|
—
|
|
||||||||||
Net cash (used in) provided by financing activities
|
|
(9,201
|
)
|
|
2,388
|
|
|
(19,350
|
)
|
|
(1,757
|
)
|
|
—
|
|
|
(27,920
|
)
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Effect of exchange rate changes on cash and cash equivalents
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(24
|
)
|
|
—
|
|
|
(24
|
)
|
||||||||||
(Decrease) increase in cash
|
|
(14,653
|
)
|
|
—
|
|
|
—
|
|
|
42
|
|
|
—
|
|
|
(14,611
|
)
|
||||||||||
Cash - beginning of period
|
|
18,221
|
|
|
—
|
|
|
—
|
|
|
794
|
|
|
—
|
|
|
19,015
|
|
||||||||||
Cash - end of period
|
|
$
|
3,568
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
836
|
|
|
$
|
—
|
|
|
$
|
4,404
|
|
(In thousands)
|
|
Prestige Brands Holdings, Inc.
|
|
Prestige Brands, Inc., the issuer
|
|
Combined Subsidiary Guarantors
|
|
Combined Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||||
Operating Activities
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net income (loss)
|
|
$
|
14,768
|
|
|
$
|
8,711
|
|
|
$
|
7,516
|
|
|
$
|
639
|
|
|
$
|
(16,866
|
)
|
|
$
|
14,768
|
|
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Depreciation and amortization
|
|
137
|
|
|
141
|
|
|
2,253
|
|
|
19
|
|
|
—
|
|
|
2,550
|
|
||||||
Deferred income taxes
|
|
219
|
|
|
1,346
|
|
|
1,620
|
|
|
1
|
|
|
—
|
|
|
3,186
|
|
||||||
Amortization of deferred financing costs
|
|
—
|
|
|
283
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
283
|
|
||||||
Stock-based compensation costs
|
|
861
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
861
|
|
||||||
Amortization of debt discount
|
|
—
|
|
|
229
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
229
|
|
||||||
Equity in income of subsidiaries
|
|
(8,929
|
)
|
|
(7,937
|
)
|
|
—
|
|
|
—
|
|
|
16,866
|
|
|
—
|
|
||||||
Changes in operating assets and liabilities, net of effects of purchases of businesses:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Accounts receivable
|
|
2
|
|
|
2,004
|
|
|
(1,416
|
)
|
|
(5
|
)
|
|
—
|
|
|
585
|
|
||||||
Inventories
|
|
—
|
|
|
(2,413
|
)
|
|
(1,728
|
)
|
|
175
|
|
|
—
|
|
|
(3,966
|
)
|
||||||
Prepaid expenses and other current assets
|
|
2,430
|
|
|
(402
|
)
|
|
(665
|
)
|
|
(7
|
)
|
|
—
|
|
|
1,356
|
|
||||||
Accounts payable
|
|
(309
|
)
|
|
93
|
|
|
2,874
|
|
|
(96
|
)
|
|
—
|
|
|
2,562
|
|
||||||
Accrued liabilities
|
|
(5,761
|
)
|
|
(5,364
|
)
|
|
4,016
|
|
|
138
|
|
|
—
|
|
|
(6,971
|
)
|
||||||
Net cash provided by operating activities
|
|
3,418
|
|
|
(3,309
|
)
|
|
14,470
|
|
|
864
|
|
|
—
|
|
|
15,443
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Investing Activities
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Purchases of property and equipment
|
|
(76
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(76
|
)
|
||||||
Net cash used in investing activities
|
|
(76
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(76
|
)
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Financing Activities
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Repayment of long-term debt
|
|
—
|
|
|
(23,000
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(23,000
|
)
|
||||||
Proceeds from exercise of stock options
|
|
563
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
563
|
|
||||||
Shares surrendered as payment of tax withholding
|
|
(271
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(271
|
)
|
||||||
Intercompany activity, net
|
|
(10,884
|
)
|
|
26,309
|
|
|
(14,470
|
)
|
|
(955
|
)
|
|
—
|
|
|
—
|
|
||||||
Net cash provided by (used in) financing activities
|
|
(10,592
|
)
|
|
3,309
|
|
|
(14,470
|
)
|
|
(955
|
)
|
|
—
|
|
|
(22,708
|
)
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Effect of exchange rate changes on cash and cash equivalents
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
|
—
|
|
|
(2
|
)
|
||||||
Increase in cash
|
|
(7,250
|
)
|
|
—
|
|
|
—
|
|
|
(93
|
)
|
|
—
|
|
|
(7,343
|
)
|
||||||
Cash - beginning of period
|
|
12,698
|
|
|
—
|
|
|
—
|
|
|
636
|
|
|
—
|
|
|
13,334
|
|
||||||
Cash - end of period
|
|
$
|
5,448
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
543
|
|
|
$
|
—
|
|
|
$
|
5,991
|
|
(In thousands)
|
|
Prestige Brands Holdings, Inc.
|
|
Prestige Brands, Inc., the issuer
|
|
Combined Subsidiary Guarantors
|
|
Combined Non-Guarantor Subsidiaries
|
|
Eliminations
|
|||||||||||||||||||||||||
|
|
Reported
|
Revised
|
|
Reported
|
Revised
|
|
Reported
|
Revised
|
|
Reported
|
Revised
|
|
Reported
|
Revised
|
||||||||||||||||||||
Revenue
|
|
$
|
—
|
|
$
|
—
|
|
|
$
|
70,399
|
|
$
|
21,681
|
|
|
$
|
24,093
|
|
$
|
72,307
|
|
|
$
|
1,347
|
|
$
|
1,307
|
|
|
$
|
(544
|
)
|
$
|
—
|
|
Income before income taxes
|
|
21,732
|
|
18,199
|
|
|
4,984
|
|
9,108
|
|
|
(348
|
)
|
12,450
|
|
|
829
|
|
829
|
|
|
(3,477
|
)
|
(16,866
|
)
|
||||||||||
Provision (benefit) for income taxes
|
|
6,964
|
|
3,431
|
|
|
1,992
|
|
397
|
|
|
(194
|
)
|
4,934
|
|
|
190
|
|
190
|
|
|
—
|
|
—
|
|
||||||||||
Net income
|
|
14,768
|
|
14,768
|
|
|
2,992
|
|
8,711
|
|
|
(154
|
)
|
7,516
|
|
|
639
|
|
639
|
|
|
(3,477
|
)
|
(16,866
|
)
|
(In thousands)
|
|
Prestige Brands Holdings, Inc.
|
|
Prestige Brands, Inc., the issuer
|
|
Combined Subsidiary Guarantors
|
|
Combined Non-Guarantor Subsidiaries
|
|
Eliminations
|
|||||||||||||||||||||||||
|
|
Reported
|
Revised
|
|
Reported
|
Revised
|
|
Reported
|
Revised
|
|
Reported
|
Revised
|
|
Reported
|
Revised
|
||||||||||||||||||||
Total current assets
|
|
$
|
26,704
|
|
$
|
26,704
|
|
|
$
|
98,887
|
|
$
|
22,505
|
|
|
$
|
19,222
|
|
$
|
94,308
|
|
|
$
|
2,222
|
|
$
|
3,518
|
|
|
$
|
—
|
|
$
|
—
|
|
Total assets
|
|
2,200,652
|
|
2,067,026
|
|
|
3,236,598
|
|
2,975,959
|
|
|
267,407
|
|
1,719,060
|
|
|
10,402
|
|
9,832
|
|
|
(3,956,783
|
)
|
(5,013,601
|
)
|
||||||||||
Total current liabilities
|
|
16,779
|
|
16,292
|
|
|
49,246
|
|
20,390
|
|
|
(3,446
|
)
|
25,898
|
|
|
1,344
|
|
1,343
|
|
|
—
|
|
—
|
|
||||||||||
Total liabilities
|
|
1,797,927
|
|
1,664,298
|
|
|
2,982,492
|
|
1,671,241
|
|
|
196,430
|
|
482,239
|
|
|
2,116
|
|
1,738
|
|
|
(3,623,417
|
)
|
(2,463,968
|
)
|
||||||||||
Total stockholder's equity
|
|
402,725
|
|
402,728
|
|
|
254,106
|
|
1,304,718
|
|
|
70,977
|
|
1,236,821
|
|
|
8,286
|
|
8,094
|
|
|
(333,366
|
)
|
(2,549,633
|
)
|
(In thousands)
|
|
Prestige Brands Holdings, Inc.
|
|
Prestige Brands, Inc., the issuer
|
|
Combined Subsidiary Guarantors
|
|
Combined Non-Guarantor Subsidiaries
|
|
Eliminations
|
|||||||||||||||||||||||||
|
|
Reported
|
Revised
|
|
Reported
|
Revised
|
|
Reported
|
Revised
|
|
Reported
|
Revised
|
|
Reported
|
Revised
|
||||||||||||||||||||
Net cash provided by (used in) operating activities
|
|
$
|
8,006
|
|
$
|
3,418
|
|
|
$
|
8,487
|
|
$
|
(3,309
|
)
|
|
$
|
1,564
|
|
$
|
14,470
|
|
|
$
|
863
|
|
$
|
864
|
|
|
$
|
(3,477
|
)
|
$
|
—
|
|
Net cash provided by (used in) investing activities
|
|
(54
|
)
|
(76
|
)
|
|
(22
|
)
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
||||||||||
Net cash provided by (used in) financing activities
|
|
(15,202
|
)
|
(10,592
|
)
|
|
(8,465
|
)
|
3,309
|
|
|
(1,564
|
)
|
(14,470
|
)
|
|
(954
|
)
|
(955
|
)
|
|
3,477
|
|
—
|
|
ITEM 2.
|
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
See also “Cautionary Statement Regarding Forward-Looking Statements” on page
47
of this Quarterly Report on Form 10-Q.
|
(In thousands)
|
|
GSK Brands I (January 31, 2012)
|
|
GSK Brands II (March 30, 2012)
|
|
Total
|
||||||
Inventory
|
|
$
|
14,820
|
|
|
$
|
250
|
|
|
$
|
15,070
|
|
Prepaid expenses
|
|
3,575
|
|
|
—
|
|
|
3,575
|
|
|||
Trade names
|
|
542,892
|
|
|
81,257
|
|
|
624,149
|
|
|||
Goodwill
|
|
17,401
|
|
|
2,831
|
|
|
20,232
|
|
|||
Total purchase price
|
|
$
|
578,688
|
|
|
$
|
84,338
|
|
|
$
|
663,026
|
|
|
Three Months Ended June 30,
|
|||||||||||||||||
Revenues
|
2012
|
|
%
|
|
2011
|
|
%
|
|
Increase (Decrease)
|
|
%
|
|||||||
Analgesics
|
$
|
27,675
|
|
|
18.8
|
|
$
|
621
|
|
|
0.7
|
|
$
|
27,054
|
|
|
4,356.5
|
|
Cough & Cold
|
$
|
23,804
|
|
|
16.2
|
|
$
|
20,663
|
|
|
21.7
|
|
3,141
|
|
|
15.2
|
|
|
Gastrointestinal
|
$
|
24,204
|
|
|
16.5
|
|
$
|
5,364
|
|
|
5.6
|
|
18,840
|
|
|
351.2
|
|
|
Eye & Ear Care
|
$
|
21,707
|
|
|
14.8
|
|
$
|
17,669
|
|
|
18.5
|
|
4,038
|
|
|
22.9
|
|
|
Dermatologicals
|
$
|
14,482
|
|
|
9.9
|
|
$
|
14,916
|
|
|
15.7
|
|
(434
|
)
|
|
(2.9
|
)
|
|
Oral Care
|
$
|
10,530
|
|
|
7.2
|
|
$
|
10,887
|
|
|
11.4
|
|
(357
|
)
|
|
(3.3
|
)
|
|
Other OTC
|
$
|
3,783
|
|
|
2.6
|
|
$
|
1,082
|
|
|
1.1
|
|
2,701
|
|
|
249.6
|
|
|
Total OTC Healthcare Revenues
|
126,185
|
|
|
85.8
|
|
71,202
|
|
|
74.7
|
|
54,983
|
|
|
77.2
|
|
|||
Household Cleaning
|
20,812
|
|
|
14.2
|
|
24,093
|
|
|
25.3
|
|
(3,281
|
)
|
|
(13.6
|
)
|
|||
Consolidated Revenues
|
$
|
146,997
|
|
|
100.0
|
|
$
|
95,295
|
|
|
100.0
|
|
$
|
51,702
|
|
|
54.3
|
|
|
Three Months Ended June 30,
|
|||||||||||||||||
Cost of Sales
|
2012
|
|
%
|
|
2011
|
|
%
|
|
Increase (Decrease)
|
|
%
|
|||||||
OTC Healthcare
|
$
|
47,399
|
|
|
37.6
|
|
$
|
28,784
|
|
|
40.4
|
|
18,615
|
|
|
64.7
|
|
|
Household Cleaning
|
15,994
|
|
|
76.8
|
|
16,643
|
|
|
69.1
|
|
(649
|
)
|
|
(3.9
|
)
|
|||
|
$
|
63,393
|
|
|
43.1
|
|
$
|
45,427
|
|
|
47.7
|
|
$
|
17,966
|
|
|
39.5
|
|
|
Three Months Ended June 30,
|
|||||||||||||||||
Gross Profit
|
2012
|
|
%
|
|
2011
|
|
%
|
|
Increase (Decrease)
|
|
%
|
|||||||
OTC Healthcare
|
$
|
78,786
|
|
|
62.4
|
|
$
|
42,418
|
|
|
59.6
|
|
$
|
36,368
|
|
|
85.7
|
|
Household Cleaning
|
4,818
|
|
|
23.2
|
|
7,450
|
|
|
30.9
|
|
(2,632
|
)
|
|
(35.3
|
)
|
|||
|
$
|
83,604
|
|
|
56.9
|
|
$
|
49,868
|
|
|
52.3
|
|
$
|
33,736
|
|
|
67.7
|
|
|
Three Months Ended June 30,
|
|||||||||||||||||
Contribution Margin
|
2012
|
|
%
|
|
2011
|
|
%
|
|
Increase (Decrease)
|
|
%
|
|||||||
OTC Healthcare
|
$
|
60,933
|
|
|
48.3
|
|
$
|
33,997
|
|
|
47.7
|
|
$
|
26,936
|
|
|
79.2
|
|
Household Cleaning
|
2,346
|
|
|
11.3
|
|
5,638
|
|
|
23.4
|
|
(3,292
|
)
|
|
(58.4
|
)
|
|||
|
$
|
63,279
|
|
|
43.0
|
|
$
|
39,635
|
|
|
41.6
|
|
$
|
23,644
|
|
|
59.7
|
|
|
Three Months Ended June 30,
|
||||||
(In thousands)
|
2012
|
|
2011
|
||||
Cash provided by (used in):
|
|
|
|
||||
Operating Activities
|
$
|
14,742
|
|
|
$
|
15,443
|
|
Investing Activities
|
(1,409
|
)
|
|
(76
|
)
|
||
Financing Activities
|
(27,920
|
)
|
|
(22,708
|
)
|
•
|
$250.0 million
of 8.25% 2010 Senior Notes due 2018;
|
•
|
$250.0 million
of 8.125% 2012 Senior Notes due 2020;
|
•
|
$590.0 million
of borrowings under the 2012 Term Loan; and
|
•
|
$17.0 million
of borrowings under the 2012 ABL Revolver.
|
•
|
Have a leverage ratio of less than
7.75 to 1.0
for the quarter ended
June 30, 2012
(defined as, with certain adjustments, the ratio of our consolidated total net debt as of the last day of the fiscal quarter to our trailing twelve month consolidated net income before interest, taxes, depreciation, amortization, non-cash charges, and certain other items (“EBITDA”)). Our leverage ratio requirement decreases over time to
3.50 to 1.0
for the quarter ending June 30, 2016, and remains level thereafter;
|
•
|
Have an interest coverage ratio of greater than
1.5 to 1.0
for the quarter ended
June 30, 2012
(defined as, with certain adjustments, the ratio of our consolidated EBITDA to our trailing twelve month consolidated cash interest expense). Our interest coverage requirement increases over time to
2.50 to 1.0
for the quarter ending June 30, 2016, and remains level thereafter; and
|
•
|
Have a fixed charge ratio of greater than
1.0 to 1.0
for the quarter ended
June 30, 2012
(defined as, with certain adjustments, the ratio of our consolidated EBITDA minus capital expenditures to our trailing twelve month consolidated interest paid, taxes paid and other specified payments). Our fixed charge requirement remains level throughout the term of the agreement.
|
(In thousands)
|
OTC
Healthcare
|
|
Household
Cleaning
|
|
Consolidated
|
||||||
|
|
|
|
|
|
||||||
Goodwill
|
$
|
166,539
|
|
|
$
|
7,389
|
|
|
$
|
173,928
|
|
|
|
|
|
|
|
|
|||||
Intangible assets, net
|
|
|
|
|
|
|
|||||
Indefinite-lived:
|
|
|
|
|
|
|
|||||
Analgesics
|
342,164
|
|
|
—
|
|
|
342,164
|
|
|||
Cough & Cold
|
185,453
|
|
|
—
|
|
|
185,453
|
|
|||
Gastrointestinal
|
214,060
|
|
|
—
|
|
|
214,060
|
|
|||
Eye & Ear Care
|
172,552
|
|
|
—
|
|
|
172,552
|
|
|||
Dermatologicals
|
149,927
|
|
|
—
|
|
|
149,927
|
|
|||
Oral Care
|
61,438
|
|
|
—
|
|
|
61,438
|
|
|||
Other OTC
|
—
|
|
|
—
|
|
|
—
|
|
|||
Household Cleaning
|
—
|
|
|
119,820
|
|
|
119,820
|
|
|||
Total indefinite-lived intangible assets, net
|
1,125,594
|
|
|
119,820
|
|
|
1,245,414
|
|
|||
|
|
|
|
|
|
||||||
Finite-lived:
|
|
|
|
|
|
|
|||||
Analgesics
|
4,527
|
|
|
—
|
|
|
4,527
|
|
|||
Cough & Cold
|
23,942
|
|
|
—
|
|
|
23,942
|
|
|||
Gastrointestinal
|
27,341
|
|
|
—
|
|
|
27,341
|
|
|||
Eye & Ear Care
|
8,975
|
|
|
—
|
|
|
8,975
|
|
|||
Dermatologicals
|
7,218
|
|
|
—
|
|
|
7,218
|
|
|||
Oral Care
|
19,541
|
|
|
—
|
|
|
19,541
|
|
|||
Other OTC
|
31,236
|
|
|
—
|
|
|
31,236
|
|
|||
Household Cleaning
|
—
|
|
|
29,220
|
|
|
29,220
|
|
|||
Total finite-lived intangible assets, net
|
122,780
|
|
|
29,220
|
|
|
152,000
|
|
|||
|
|
|
|
|
|
||||||
Total intangible assets, net
|
1,248,374
|
|
|
149,040
|
|
|
1,397,414
|
|
|||
|
|
|
|
|
|
|
|
|
|||
|
$
|
1,414,913
|
|
|
$
|
156,429
|
|
|
$
|
1,571,342
|
|
•
|
Brand History
|
•
|
Market Position
|
•
|
Recent and Projected Sales Growth
|
•
|
History of and Potential for Product Extensions
|
•
|
Reviews period-to-period sales and profitability by brand;
|
•
|
Analyzes industry trends and projects brand growth rates;
|
•
|
Prepares annual sales forecasts;
|
•
|
Evaluates advertising effectiveness;
|
•
|
Analyzes gross margins;
|
•
|
Reviews contractual benefits or limitations;
|
•
|
Monitors competitors' advertising spend and product innovation;
|
•
|
Prepares projections to measure brand viability over the estimated useful life of the intangible asset; and
|
•
|
Considers the regulatory environment, as well as industry litigation.
|
•
|
Type of instrument (i.e., restricted shares vs. an option, warrant or performance shares);
|
•
|
Strike price of the instrument;
|
•
|
Market price of our common stock on the date of grant;
|
•
|
Discount rates;
|
•
|
Duration of the instrument; and
|
•
|
Volatility of our common stock in the public market.
|
•
|
Rules and regulations promulgated by regulatory agencies;
|
•
|
Sufficiency of the evidence in support of our position;
|
•
|
Anticipated costs to support our position; and
|
•
|
Likelihood of a positive outcome.
|
•
|
The high level of competition from branded and private label competitors in our industry;
|
•
|
Our dependence on a limited number of customers for a large portion of our sales;
|
•
|
General economic conditions affecting our products and their respective markets;
|
•
|
Changing consumer trends or pricing pressures which may cause us to lower our prices;
|
•
|
Our dependence on third-party manufacturers to produce the products we sell;
|
•
|
Price increases for raw materials, labor, energy and transportation costs;
|
•
|
Disruptions in our distribution center;
|
•
|
Acquisitions, dispositions or other strategic transactions (including the recent acquisition of OTC healthcare brands from GSK) diverting managerial resources, or incurrence of additional liabilities or integration problems associated with such transactions;
|
•
|
Regulatory matters governing our industry;
|
•
|
Product liability claims, recalls and related negative publicity;
|
•
|
Our ability to protect our intellectual property rights;
|
•
|
Our dependence on third parties for intellectual property relating to some of the products we sell;
|
•
|
Our assets being comprised virtually entirely of goodwill and intangibles;
|
•
|
Our dependence on key personnel;
|
•
|
The costs associated with any adverse judgments rendered in any pending litigation or arbitration;
|
•
|
Our level of indebtedness, and possible inability to service our debt;
|
•
|
Our ability to obtain additional financing; and
|
•
|
The restrictions imposed by our financing agreements on our operations.
|
ITEM 3.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
ITEM 4.
|
CONTROLS AND PROCEDURES
|
PART II.
|
OTHER INFORMATION
|
ITEM 1.
|
LEGAL PROCEEDINGS
|
•
|
Consumer spending may continue to be curtailed resulting in downward pressure on our sales;
|
•
|
Our customers may continue to ration the number of products that reach store shelves, resulting in a reduction of the number of products that are carried at retail, particularly those that are not number one or two in their
|
•
|
Our customers may continue to reduce overall inventory levels to strengthen their working capital positions, which could result in additional sales reductions for us during those periods that our customers implement such strategies;
|
•
|
Our customers may continue to increase the number and breadth of products that are sold via their “private label” to the detriment of our branded products;
|
•
|
Our customers may continue to reduce store count, closing additional marginally performing stores resulting in sales reductions, potential working capital reductions, and an inability to repay amounts owed to us; and
|
•
|
Our suppliers may suffer from sales reductions, which could diminish their working capital, impede their ability to provide product to us in a timely manner or in sufficient quantities, and result in an increase in prices.
|
ITEM 6.
|
EXHIBITS
|
|
|
PRESTIGE BRANDS HOLDINGS, INC.
|
|
|
|
|
|
|
|
|
|
|
|
|
Date:
|
August 9, 2012
|
By:
|
/s/ RONALD M. LOMBARDI
|
|
|
|
|
Ronald M. Lombardi
|
|
|
|
|
Chief Financial Officer
|
|
|
|
|
(Principal Financial Officer and
|
|
|
|
|
Duly Authorized Officer)
|
|
* XBRL information is furnished and not filed for purposes of Section 11 and 12 of the Securities Act of 1933 and Section 18 of the Securities Exchange Act of 1934, and is not subject to liability under those sections, is not part of any registration statement, prospectus or other document to which it relates and is not incorporated or deemed to be incorporated by reference into any registration statement, prospectus or other document.
|
Initial Equity Grant:
|
|
On the day of the first annual meeting of stockholders following a non-employee director’s election or appointment to the board, he or she will receive a one-time grant of shares of common stock with a value equal to $20,000. The number of shares granted will be determined by dividing $20,000 by the closing price of Company common stock on such date. The shares of common stock are fully-vested on the date of grant.
|
|
|
|
Annual Equity Grant:
|
|
On the day of the annual meeting of stockholders, each non-employee director will receive an award of restricted stock units with a value equal to $60,000. The number of restricted stock units granted will be determined by dividing $60,000 by the closing price of Company common stock on the day of the annual meeting of stockholders. The restricted stock units will vest one year following the date of grant, subject to the director’s continued membership on the board as of such date, and will be settled in shares of Company common stock on the earliest to occur of (i) the non-employee director’s death, (ii) the non-employee director’s disability, or (iii) the 6-month anniversary of the date on which the non-employee director’s board membership ceases for reasons other than death or disability.
|
Annual Cash Retainer:
|
$60,000, payable in equal quarterly installments
|
Meeting Fee Per Board Meeting Attended In-Person:
|
$2,000
|
Meeting Fee Per Committee Meeting Attended In-Person:
|
$1,000
|
Meeting Fee Per Board or Committee Meeting Attended Telephonically:
|
$750
|
Additional Annual Retainers – Committee Chairpersons:
|
|
Nominating and Corporate Governance Committee
|
$6,500
|
Audit Committee
|
$10,000
|
Compensation Committee
|
$6,500
|
Additional Annual Retainer — Lead Director:
|
$45,000
|
|
TABLE OF CONTENTS
|
|
|
|
|
|
|
SPACE
|
|
1
|
|
TERM
|
|
1
|
|
RENT
|
|
2
|
|
USE
|
|
3
|
|
LANDLORD ALTERATION
|
|
4
|
|
SERVICES
|
|
9
|
|
LANDLORD'S REPAIRS
|
|
9
|
|
WATER SUPPLY
|
|
10
|
|
PARKING FIELD
|
|
10
|
|
DIRECTORY
|
|
11
|
|
TAXES AND OTHER CHARGES
|
|
11
|
|
OPERATING COST INCREASES
|
|
13
|
|
TENANT'S REPAIRS
|
|
16
|
|
FIXTURES & INSTALLATIONS
|
|
17
|
|
ALTERATIONS
|
|
17
|
|
REQUIREMENTTS OF LAW
|
|
19
|
|
END OF TERM
|
|
21
|
|
QUIET ENJOYMENT
|
|
22
|
|
SIGNS
|
|
22
|
|
RULES AND REGULATIONS
|
|
23
|
|
RIGHT TO SUBLET OR ASSIGN
|
|
23
|
|
LANDLORD'S ACCESS TO PREMISES
|
|
29
|
|
SUBORDINATION
|
|
30
|
|
PROPERTY LOSS, DAMAGE REIMBURSEMENT
|
|
32
|
|
INDEMNITY
|
|
32
|
|
DESTRUCTION-FIRE OR OTHER CASUALTY
|
|
33
|
|
INSURANCE
|
|
34
|
|
EMINENT DOMAIN
|
|
36
|
|
NONLIABILITY OF LANDLORD
|
|
37
|
|
DEFAULT
|
|
38
|
|
TERMINATION OF DEFAULT
|
|
39
|
|
DAMAGES
|
|
39
|
|
SUMS DUE LANDLORD
|
|
40
|
|
NO WAIVER
|
|
41
|
|
WAIVER OF TRIAL BY JURY
|
|
42
|
|
NOTICES
|
|
42
|
|
INABILITY TO PERFORM
|
|
43
|
|
INTERRUPTION OF SERVICE
|
|
43
|
|
CONDITIONS OF LANDLORD'S LIABILITY
|
|
44
|
|
TENANT'S TAKING POSSESSION
|
|
45
|
|
ENTIRE AGREEMENT
|
|
45
|
|
DEFINITIONS
|
|
45
|
|
PARTNERSHIP TENANT
|
|
46
|
|
SUCCESSORS, ASSIGNS, ETC
|
|
46
|
|
BROKER
|
|
46
|
|
CAPTIONS
|
|
47
|
|
NOTICE OF ACCIDENTS
|
|
47
|
|
AUTHORITY TO ENTER LEASE
|
|
47
|
|
RENEWAL OPTIONS
|
|
47
|
|
RIGHT OF OFFER
|
|
49
|
|
STORAGE SPACE
|
|
50
|
|
ROOF RIGHTS
|
|
51
|
|
RESTRICTIVE COVENANT
|
|
51
|
|
DEEMED CONSENT WARNING NOTICE
|
|
51
|
|
GUARANTY
|
|
52
|
|
SCHEDULE "A"
|
|
54
|
|
SCHEDULE "B"
|
|
57
|
|
SCHEDULE "C"
|
|
60
|
|
SCHEDULE "D"
|
|
|
|
SCHEDULE "E"
|
|
|
|
EXHIBIT 1
|
|
|
|
EXHIBIT 2
|
|
|
|
EXHIBIT 3
|
|
|
|
EXHIBIT 4
|
|
|
A.
|
Empty all wastepaper baskets, damp wipe ashtrays and receptacles.
|
B.
|
Sweep and/or dustmop all hard surfaced flooring with mops so treated as to preserve the sheen and appearance of such flooring.
|
C.
|
Carpet sweep all areas requiring same. Said areas to be vacuumed clean twice weekly; conduct spot cleaning where necessary.
|
D.
|
Deposit all wastepaper from baskets in plastic bags (to be supplied by Contractor), placing same in locations as shall be designated convenient for the remove thereof. Landlord shall not be responsible for the removal of large boxes, wooden pallets or abnormal amounts of waste paper.
|
E.
|
Hand dust all desks, chairs, worktables, office furniture and equipment within normal arms reach.
|
F.
|
Damp dust and wipe clean all glass tops and all desks and tables, removing all finger marks and smudges from same.
|
G.
|
Wipe clean of finger marks and maintain all brass and other bright work.
|
H.
|
Wash and clean tops of all water coolers and fountains and floors and wall areas surrounding same.
|
I.
|
Hand dust all doors and ventilation louvers located within normal arms reach.
|
J.
|
Dust clean interior of all wastepaper baskets and disposal cans.
|
L.
|
Lift and dust under all telephones and other such lightweight desk appurtenances, dusting and replacing same in their proper locations. Telephones will be sanitized once a month.
|
N.
|
Instruct all employees to notify their supervisor, who in turn shall notify the proper designated representative of the building, of any irregularity found in any office during the nightly tour of office cleaning.
|
O.
|
After cleaning, all electric lamps are to be extinguished, office windows closed, office doors closed and premises to be left in a neat and orderly condition.
|
A.
|
Scour wash all public lavatory flooring, using the proper coefficient of disinfectant for same.
|
B.
|
Thoroughly wash, scour clean and disinfect all basins, bowls and urinals located in all public lavatories.
|
C.
|
Damp dust and wipe clean all mirrors, powder shelves and enameled surfaces located in all public lavatories.
|
D.
|
Wipe clean of finger marks and maintain in a constant state of uniform brightness, all brass and other bright work located in all public lavatories.
|
E.
|
Damp wipe clean all soap dispensers, receptacles, partitions, stalls and tile work within normal arms reach in all public lavatories. Said areas to be washed down at least once during the course of each weekly period.
|
F.
|
Empty and clean all paper towel and sanitary disposal receptacles in all public lavatories, depositing waste from same in designated locations.
|
G.
|
Refill all toilet tissue, hand soap and towel dispensers located in all public lavatories.
|
H.
|
Wash all terrazzo lobby flooring. Same to be machine scrubbed a minimum of once during the course of each monthly period.
|
I.
|
Hand dust all lobby marble, stone work and fixtures within normal arms reach.
|
J.
|
Dustmop and/or vacuum all public corridors as situated throughout the entire building.
|
K.
|
Thoroughly wash, wax and machine polish and/or refinish all public corridors as situated throughout the entire building twice during the course of each weekly period. (Full floor tenants responsible for floor maintenance of their entire floor; Landlord is not responsible for the maintenance of any elevator corridors or aisles).
|
L.
|
Thoroughly wash, wax and machine polish and/or refinish all flooring as situated within the two elevator cabs.
|
M.
|
Hand dust and clean all vertical surfaces located within the two elevator cabs.
|
N.
|
Dust clean exterior of overhead lighting fixtures. Wash clean both inside and outside of all the lighting fixtures, fluorescent and incandescent, situated in the core space of the building; once during the course of each yearly period.
|
O.
|
Dust clean all overhead pipes, ventilating louvers, air conditioning louvers and dust high moldings and other high areas and surfaces situated on all floors of the building and not reached during the regularly scheduled tours of nightly cleaning twice during the course of each yearly period.
|
P.
|
Damp mop all stairways and landings, dusting down all handrails, stairway doors and frames, fire hoses, standpipe nozzles and racks located in two sets of stairways once during the course of each weekly period.
|
Q.
|
Clean and polish saddles and entrance hardware in public areas once a month.
|
81--90 db
|
76 +/- 2db, 35--50 RH*
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of Prestige Brands Holdings, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
Date:
|
August 9, 2012
|
/s/ Matthew M. Mannelly
|
|
|
|
Matthew M. Mannelly
|
|
|
|
Chief Executive Officer
|
|
|
|
(Principal Executive Officer)
|
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of Prestige Brands Holdings, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
Date:
|
August 9, 2012
|
/s/ Ronald M. Lombardi
|
|
|
|
Ronald M. Lombardi
|
|
|
|
Chief Financial Officer
|
|
|
|
(Principal Financial Officer)
|
|
/s/ Matthew M. Mannelly
|
Name: Matthew M. Mannelly
|
Title: Chief Executive Officer
|
(Principal Executive Officer)
|
Date: August 9, 2012
|
|
|
|
|
|
|
/s/ Ronald M. Lombardi
|
|
Name: Ronald M. Lombardi
|
|
Title: Chief Financial Officer
|
|
(Principal Financial Officer)
|
|
Date: August 9, 2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|