[ X ]
|
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, 2014
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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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660 White Plains Road
Tarrytown, New York 10591
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(Address of principal executive offices) (Zip Code)
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(914) 524-6800
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(Registrant's telephone number, including area code)
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(Former name, former address and former fiscal year, if changed since last report)
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Large accelerated filer
x
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|
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Accelerated filer
o
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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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|
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Item 1.
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Financial Statements
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Consolidated Statements of Income and Comprehensive Income for the three months ended June 30, 2014 and 2013 (unaudited)
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|
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Consolidated Balance Sheets as of June 30, 2014 (unaudited) and March 31, 2014
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|
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Consolidated Statements of Cash Flows for the three months ended June 30, 2014 and 2013 (unaudited)
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Notes to Consolidated Financial Statements (unaudited)
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|
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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 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
|
ITEM 1.
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FINANCIAL STATEMENTS
|
|
Three Months Ended June 30,
|
||||||
(In thousands, except per share data)
|
2014
|
|
2013
|
||||
Revenues
|
|
|
|
||||
Net sales
|
$
|
144,541
|
|
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$
|
141,642
|
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Other revenues
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1,161
|
|
|
870
|
|
||
Total revenues
|
145,702
|
|
|
142,512
|
|
||
|
|
|
|
||||
Cost of Sales
|
|
|
|
|
|
||
Cost of sales (exclusive of depreciation shown below)
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63,836
|
|
|
59,488
|
|
||
Gross profit
|
81,866
|
|
|
83,024
|
|
||
|
|
|
|
||||
Operating Expenses
|
|
|
|
|
|
||
Advertising and promotion
|
19,096
|
|
|
18,681
|
|
||
General and administrative
|
17,006
|
|
|
11,634
|
|
||
Depreciation and amortization
|
2,961
|
|
|
3,268
|
|
||
Total operating expenses
|
39,063
|
|
|
33,583
|
|
||
Operating income
|
42,803
|
|
|
49,441
|
|
||
|
|
|
|
||||
Other (income) expense
|
|
|
|
|
|
||
Interest income
|
(32
|
)
|
|
(3
|
)
|
||
Interest expense
|
14,685
|
|
|
15,908
|
|
||
Total other expense
|
14,653
|
|
|
15,905
|
|
||
Income before income taxes
|
28,150
|
|
|
33,536
|
|
||
Provision for income taxes
|
11,418
|
|
|
12,844
|
|
||
Net income
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$
|
16,732
|
|
|
$
|
20,692
|
|
|
|
|
|
||||
Earnings per share:
|
|
|
|
|
|
||
Basic
|
$
|
0.32
|
|
|
$
|
0.40
|
|
Diluted
|
$
|
0.32
|
|
|
$
|
0.40
|
|
|
|
|
|
||||
Weighted average shares outstanding:
|
|
|
|
|
|
||
Basic
|
51,956
|
|
|
51,222
|
|
||
Diluted
|
52,533
|
|
|
52,040
|
|
||
|
|
|
|
||||
Comprehensive income, net of tax:
|
|
|
|
||||
Currency translation adjustments
|
$
|
2,726
|
|
|
$
|
1
|
|
Total other comprehensive income
|
2,726
|
|
|
1
|
|
||
Comprehensive income
|
$
|
19,458
|
|
|
$
|
20,693
|
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(In thousands)
Assets
|
June 30,
2014 |
|
March 31,
2014 |
||||
Current assets
|
|
|
|
||||
Cash and cash equivalents
|
$
|
15,675
|
|
|
$
|
28,331
|
|
Accounts receivable, net
|
58,238
|
|
|
65,050
|
|
||
Inventories
|
66,171
|
|
|
65,586
|
|
||
Deferred income tax assets
|
6,118
|
|
|
6,544
|
|
||
Prepaid expenses and other current assets
|
13,895
|
|
|
11,674
|
|
||
Total current assets
|
160,097
|
|
|
177,185
|
|
||
|
|
|
|
||||
Property and equipment, net
|
10,673
|
|
|
9,597
|
|
||
Goodwill
|
192,632
|
|
|
190,911
|
|
||
Intangible assets, net
|
1,468,172
|
|
|
1,394,817
|
|
||
Other long-term assets
|
22,376
|
|
|
23,153
|
|
||
Total Assets
|
$
|
1,853,950
|
|
|
$
|
1,795,663
|
|
|
|
|
|
||||
Liabilities and Stockholders' Equity
|
|
|
|
|
|
||
Current liabilities
|
|
|
|
|
|
||
Accounts payable
|
$
|
45,279
|
|
|
$
|
48,286
|
|
Accrued interest payable
|
9,449
|
|
|
9,626
|
|
||
Other accrued liabilities
|
23,591
|
|
|
26,446
|
|
||
Total current liabilities
|
78,319
|
|
|
84,358
|
|
||
|
|
|
|
||||
Long-term debt
|
|
|
|
||||
Principal amount
|
972,500
|
|
|
937,500
|
|
||
Less unamortized discount
|
(2,942
|
)
|
|
(3,086
|
)
|
||
Long-term debt, net of unamortized discount
|
969,558
|
|
|
934,414
|
|
||
|
|
|
|
||||
Deferred income tax liabilities
|
219,908
|
|
|
213,204
|
|
||
Other long-term liabilities
|
358
|
|
|
327
|
|
||
Total Liabilities
|
1,268,143
|
|
|
1,232,303
|
|
||
|
|
|
|
||||
Commitments and Contingencies — Note 16
|
|
|
|
|
|
||
|
|
|
|
||||
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 - 52,209 shares at June 30, 2014 and 52,021 shares at March 31, 2014
|
522
|
|
|
520
|
|
||
Additional paid-in capital
|
418,488
|
|
|
414,387
|
|
||
Treasury stock, at cost - 240 shares at June 30, 2014 and 206 shares at March 31, 2014
|
(2,545
|
)
|
|
(1,431
|
)
|
||
Accumulated other comprehensive income, net of tax
|
3,465
|
|
|
739
|
|
||
Retained earnings
|
165,877
|
|
|
149,145
|
|
||
Total Stockholders' Equity
|
585,807
|
|
|
563,360
|
|
||
Total Liabilities and Stockholders' Equity
|
$
|
1,853,950
|
|
|
$
|
1,795,663
|
|
|
Three Months Ended June 30,
|
||||||
(In thousands)
|
2014
|
|
2013
|
||||
Operating Activities
|
|
|
|
||||
Net income
|
$
|
16,732
|
|
|
$
|
20,692
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|||
Depreciation and amortization
|
2,961
|
|
|
3,268
|
|
||
Deferred income taxes
|
7,140
|
|
|
6,797
|
|
||
Amortization of deferred financing costs
|
851
|
|
|
892
|
|
||
Stock-based compensation costs
|
1,858
|
|
|
1,193
|
|
||
Amortization of debt discount
|
144
|
|
|
345
|
|
||
(Gain) on sale or disposal of property and equipment
|
—
|
|
|
(2
|
)
|
||
Changes in operating assets and liabilities, net of effects from acquisitions
|
|
|
|
|
|||
Accounts receivable
|
6,956
|
|
|
11,070
|
|
||
Inventories
|
1,540
|
|
|
(6,716
|
)
|
||
Prepaid expenses and other current assets
|
(2,203
|
)
|
|
187
|
|
||
Accounts payable
|
(3,096
|
)
|
|
(9,147
|
)
|
||
Accrued liabilities
|
(3,212
|
)
|
|
(5,781
|
)
|
||
Net cash provided by operating activities
|
29,671
|
|
|
22,798
|
|
||
|
|
|
|
||||
Investing Activities
|
|
|
|
|
|
||
Purchases of property and equipment
|
(496
|
)
|
|
(1,364
|
)
|
||
Proceeds from the sale of property and equipment
|
—
|
|
|
2
|
|
||
Acquisition of the Hydralyte brand
|
(77,991
|
)
|
|
—
|
|
||
Net cash used in investing activities
|
(78,487
|
)
|
|
(1,362
|
)
|
||
|
|
|
|
||||
Financing Activities
|
|
|
|
|
|
||
Repayments under revolving credit agreement
|
(30,000
|
)
|
|
(18,000
|
)
|
||
Borrowings under revolving credit agreement
|
65,000
|
|
|
—
|
|
||
Payment of deferred financing costs
|
(74
|
)
|
|
(280
|
)
|
||
Proceeds from exercise of stock options
|
1,294
|
|
|
309
|
|
||
Proceeds from restricted stock exercises
|
57
|
|
|
—
|
|
||
Excess tax benefits from share-based awards
|
950
|
|
|
452
|
|
||
Fair value of shares surrendered as payment of tax withholding
|
(1,171
|
)
|
|
(278
|
)
|
||
Net cash provided by (used in) financing activities
|
36,056
|
|
|
(17,797
|
)
|
||
|
|
|
|
||||
Effects of exchange rate changes on cash and cash equivalents
|
104
|
|
|
(3
|
)
|
||
(Decrease) increase in cash and cash equivalents
|
(12,656
|
)
|
|
3,636
|
|
||
Cash and cash equivalents - beginning of period
|
28,331
|
|
|
15,670
|
|
||
Cash and cash equivalents - end of period
|
$
|
15,675
|
|
|
$
|
19,306
|
|
|
|
|
|
||||
Interest paid
|
$
|
13,867
|
|
|
$
|
14,826
|
|
Income taxes paid
|
$
|
707
|
|
|
$
|
657
|
|
1.
|
Business and Basis of Presentation
|
|
Years
|
Machinery
|
5
|
Computer equipment and software
|
3
|
Furniture and fixtures
|
7
|
Leasehold improvements
|
*
|
2.
|
Acquisitions
|
(In thousands)
|
April 30, 2014
|
||
|
|
||
Inventories
|
$
|
1,970
|
|
Property, plant and equipment, net
|
1,267
|
|
|
Goodwill
|
1,224
|
|
|
Intangible assets, net
|
73,580
|
|
|
Total assets acquired
|
78,041
|
|
|
|
|
||
Accrued expenses
|
38
|
|
|
Other long term liabilities
|
12
|
|
|
Total liabilities assumed
|
50
|
|
|
Net assets acquired
|
$
|
77,991
|
|
(In thousands)
|
July 1, 2013
|
||
|
|
||
Cash acquired
|
$
|
1,546
|
|
Accounts receivable
|
1,658
|
|
|
Inventories
|
2,465
|
|
|
Deferred income taxes
|
283
|
|
|
Prepaids and other current assets
|
647
|
|
|
Property, plant and equipment
|
163
|
|
|
Goodwill
|
23,122
|
|
|
Intangible assets
|
31,502
|
|
|
Total assets acquired
|
61,386
|
|
|
|
|
||
Accounts payable
|
1,537
|
|
|
Accrued expenses
|
2,788
|
|
|
Other long term liabilities
|
300
|
|
|
Total liabilities assumed
|
4,625
|
|
|
Net assets acquired
|
$
|
56,761
|
|
3.
|
Accounts Receivable
|
(In thousands)
|
June 30,
2014 |
|
March 31,
2014 |
||||
Components of Accounts Receivable
|
|
|
|
||||
Trade accounts receivable
|
$
|
65,044
|
|
|
$
|
73,632
|
|
Other receivables
|
1,470
|
|
|
1,360
|
|
||
|
66,514
|
|
|
74,992
|
|
||
Less allowances for discounts, returns and uncollectible accounts
|
(8,276
|
)
|
|
(9,942
|
)
|
||
Accounts receivable, net
|
$
|
58,238
|
|
|
$
|
65,050
|
|
4.
|
Inventories
|
(In thousands)
|
June 30,
2014 |
|
March 31,
2014 |
||||
Components of Inventories
|
|
|
|
||||
Packaging and raw materials
|
$
|
1,973
|
|
|
$
|
3,099
|
|
Work in process
|
93
|
|
|
—
|
|
||
Finished goods
|
64,105
|
|
|
62,487
|
|
||
Inventories
|
$
|
66,171
|
|
|
$
|
65,586
|
|
5.
|
Property and Equipment
|
(In thousands)
|
June 30,
2014 |
|
March 31,
2014 |
||||
Components of Property and Equipment
|
|
|
|
||||
Machinery
|
$
|
3,241
|
|
|
$
|
1,927
|
|
Computer equipment and software
|
9,310
|
|
|
8,923
|
|
||
Furniture and fixtures
|
1,957
|
|
|
1,858
|
|
||
Leasehold improvements
|
4,734
|
|
|
4,734
|
|
||
|
19,242
|
|
|
17,442
|
|
||
Accumulated depreciation
|
(8,569
|
)
|
|
(7,845
|
)
|
||
Property and equipment, net
|
$
|
10,673
|
|
|
$
|
9,597
|
|
6.
|
Goodwill
|
(In thousands)
|
North American OTC
Healthcare
|
|
International OTC
Healthcare
|
|
Household
Cleaning
|
|
Consolidated
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Balance — March 31, 2014
|
$
|
160,157
|
|
|
23,365
|
|
|
$
|
7,389
|
|
|
$
|
190,911
|
|
|
Additions
|
—
|
|
|
1,224
|
|
|
—
|
|
|
1,224
|
|
||||
Effects of foreign currency exchange rates
|
—
|
|
|
497
|
|
|
—
|
|
|
497
|
|
||||
Balance — June 30, 2014
|
$
|
160,157
|
|
|
$
|
25,086
|
|
|
$
|
7,389
|
|
|
$
|
192,632
|
|
7.
|
Intangible Assets
|
(In thousands)
|
Indefinite
Lived
Trademarks
|
|
Finite Lived
Trademarks
|
|
Totals
|
||||||
Gross Carrying Amounts
|
|
|
|
|
|
||||||
Balance — March 31, 2014
|
$
|
1,273,878
|
|
|
$
|
204,740
|
|
|
$
|
1,478,618
|
|
Additions
|
73,580
|
|
|
—
|
|
|
73,580
|
|
|||
Reductions
|
—
|
|
|
—
|
|
|
—
|
|
|||
Effects of foreign currency exchange rates
|
1,981
|
|
|
29
|
|
|
2,010
|
|
|||
Balance — June 30, 2014
|
1,349,439
|
|
|
204,769
|
|
|
1,554,208
|
|
|||
|
|
|
|
|
|
|
|
|
|||
Accumulated Amortization
|
|
|
|
|
|
|
|
|
|||
Balance — March 31, 2014
|
—
|
|
|
83,801
|
|
|
83,801
|
|
|||
Additions
|
—
|
|
|
2,237
|
|
|
2,237
|
|
|||
Reductions
|
—
|
|
|
—
|
|
|
—
|
|
|||
Effects of foreign currency exchange rates
|
—
|
|
|
(2
|
)
|
|
(2
|
)
|
|||
Balance — June 30, 2014
|
—
|
|
|
86,036
|
|
|
86,036
|
|
|||
|
|
|
|
|
|
||||||
Intangible assets, net - June 30, 2014
|
$
|
1,349,439
|
|
|
$
|
118,733
|
|
|
$
|
1,468,172
|
|
|
|
|
|
|
|
||||||
Intangible Assets, net by Reportable Segment:
|
|
|
|
|
|
||||||
North American OTC Healthcare
|
$
|
1,123,898
|
|
|
$
|
91,407
|
|
|
$
|
1,215,305
|
|
International OTC Healthcare
|
105,721
|
|
|
1,596
|
|
|
107,317
|
|
|||
Household Cleaning
|
119,820
|
|
|
25,730
|
|
|
145,550
|
|
|||
Intangible assets, net - June 30, 2014
|
$
|
1,349,439
|
|
|
$
|
118,733
|
|
|
$
|
1,468,172
|
|
(In thousands)
|
|
|
||
Year Ending March 31,
|
|
Amount
|
||
2015 (Remaining nine months ending March 31, 2015)
|
$
|
6,715
|
|
|
2016
|
8,953
|
|
||
2017
|
8,953
|
|
||
2018
|
8,953
|
|
||
2019
|
8,953
|
|
||
Thereafter
|
76,206
|
|
||
|
$
|
118,733
|
|
8.
|
Other Accrued Liabilities
|
(In thousands)
|
June 30,
2014 |
|
March 31,
2014 |
||||
|
|
|
|
||||
Accrued marketing costs
|
$
|
11,271
|
|
|
$
|
11,812
|
|
Accrued compensation costs
|
2,552
|
|
|
6,232
|
|
||
Accrued broker commissions
|
799
|
|
|
1,019
|
|
||
Income taxes payable
|
1,653
|
|
|
1,854
|
|
||
Accrued professional fees
|
1,257
|
|
|
2,002
|
|
||
Deferred rent
|
1,168
|
|
|
1,258
|
|
||
Accrued production costs
|
1,635
|
|
|
1,506
|
|
||
Other accrued liabilities
|
3,256
|
|
|
763
|
|
||
|
$
|
23,591
|
|
|
$
|
26,446
|
|
9.
|
Long-Term Debt
|
(In thousands, except percentages)
|
|
June 30,
2014 |
|
March 31,
2014 |
||||
2013 Senior Notes bearing interest at 5.375%, with interest payable on June 15 and December 15 of each year, commencing June 15, 2014. The 2013 Senior Notes mature on December 15, 2021.
|
|
$
|
400,000
|
|
|
$
|
400,000
|
|
2012 Senior Notes bearing interest at 8.125%, with interest 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 bearing interest at the Company's option at either a base rate with a floor of 2.00% plus applicable margin or LIBOR with a floor of 1.00% plus applicable margin, due on January 31, 2019.
|
|
287,500
|
|
|
287,500
|
|
||
2012 ABL Revolver bearing 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.
|
|
35,000
|
|
|
—
|
|
||
|
|
972,500
|
|
|
937,500
|
|
||
Current portion of long-term debt
|
|
—
|
|
|
—
|
|
||
|
|
972,500
|
|
|
937,500
|
|
||
Less: unamortized discount
|
|
(2,942
|
)
|
|
(3,086
|
)
|
||
Long-term debt, net of unamortized discount
|
|
$
|
969,558
|
|
|
$
|
934,414
|
|
10.
|
Fair Value Measurements
|
11.
|
Stockholders' Equity
|
12.
|
Accumulated Other Comprehensive Income
|
|
June 30,
|
|
March 31,
|
||||
(In thousands)
|
2014
|
|
2014
|
||||
Components of Accumulated Other Comprehensive Income
|
|
|
|
||||
Cumulative translation adjustment
|
$
|
3,465
|
|
|
$
|
739
|
|
Total accumulated other comprehensive income, net of tax
|
$
|
3,465
|
|
|
$
|
739
|
|
13.
|
Earnings Per Share
|
|
|
Three Months Ended June 30,
|
||||||
(In thousands, except per share data)
|
|
2014
|
|
2013
|
||||
Numerator
|
|
|
|
|
||||
Net income
|
|
$
|
16,732
|
|
|
$
|
20,692
|
|
|
|
|
|
|
|
|
||
Denominator
|
|
|
|
|
|
|
||
Denominator for basic earnings per share — weighted average shares outstanding
|
|
51,956
|
|
|
51,222
|
|
||
Dilutive effect of unvested restricted common stock (including restricted stock units) and options issued to employees and directors
|
|
577
|
|
|
818
|
|
||
Denominator for diluted earnings per share
|
|
52,533
|
|
|
52,040
|
|
||
|
|
|
|
|
|
|
||
Earnings per Common Share:
|
|
|
|
|
|
|
||
Basic net earnings per share
|
|
$
|
0.32
|
|
|
$
|
0.40
|
|
|
|
|
|
|
|
|
||
Diluted net earnings per share
|
|
$
|
0.32
|
|
|
$
|
0.40
|
|
14.
|
Share-Based Compensation
|
Restricted Shares
|
|
Shares
(in thousands)
|
|
Weighted-
Average
Grant-Date
Fair Value
|
|||
Three months ended June 30, 2013
|
|
|
|
|
|||
Outstanding at March 31, 2013
|
|
421.3
|
|
|
$
|
11.01
|
|
Granted
|
|
113.6
|
|
|
29.94
|
|
|
Vested and issued
|
|
(27.7
|
)
|
|
9.03
|
|
|
Forfeited
|
|
(3.6
|
)
|
|
13.24
|
|
|
Outstanding at June 30, 2013
|
|
503.6
|
|
|
15.38
|
|
|
Vested at June 30, 2013
|
|
83.1
|
|
|
9.63
|
|
|
|
|
|
|
|
|
|
|
Three months ended June 30, 2014:
|
|
|
|
|
|||
Outstanding at March 31, 2014
|
|
437.5
|
|
|
$
|
16.76
|
|
Granted
|
|
96.6
|
|
|
33.50
|
|
|
Vested and issued
|
|
(93.7
|
)
|
|
15.12
|
|
|
Forfeited
|
|
(14.4
|
)
|
|
20.78
|
|
|
Outstanding at June 30, 2014
|
|
426.0
|
|
|
20.78
|
|
|
Vested at June 30, 2014
|
|
69.6
|
|
|
9.34
|
|
|
Three Months Ended June 30,
|
||||||
|
2014
|
|
2013
|
||||
Expected volatility
|
47.3
|
%
|
|
48.0
|
%
|
||
Expected dividends
|
$
|
—
|
|
|
$
|
—
|
|
Expected term in years
|
6.0
|
|
|
6.0
|
|
||
Risk-free rate
|
2.2
|
%
|
|
1.3
|
%
|
Options
|
|
Shares
(in thousands)
|
|
Weighted-
Average
Exercise
Price
|
|
Weighted-
Average
Remaining
Contractual
Term
|
|
Aggregate
Intrinsic
Value
(in thousands)
|
|||||
Three months ended June 30, 2013:
|
|
|
|
|
|
|
|
|
|||||
Outstanding at March 31, 2013
|
|
1,386.4
|
|
|
$
|
10.43
|
|
|
|
|
|
||
Granted
|
|
227.7
|
|
|
29.94
|
|
|
|
|
|
|||
Exercised
|
|
(25.0
|
)
|
|
12.40
|
|
|
|
|
|
|||
Forfeited or expired
|
|
(8.0
|
)
|
|
13.24
|
|
|
|
|
|
|||
Outstanding at June 30, 2013
|
|
1,581.1
|
|
|
13.19
|
|
|
6.2
|
|
$
|
9,840
|
|
|
Exercisable at June 30, 2013
|
|
515.9
|
|
|
11.27
|
|
|
7.2
|
|
3,715
|
|
||
|
|
|
|
|
|
|
|
|
|||||
Three months ended June 30, 2014:
|
|
|
|
|
|
|
|
|
|
|
|
||
Outstanding at March 31, 2014
|
|
994.9
|
|
|
$
|
15.24
|
|
|
|
|
|
||
Granted
|
|
307.5
|
|
|
33.50
|
|
|
|
|
|
|||
Exercised
|
|
(93.8
|
)
|
|
13.80
|
|
|
|
|
|
|||
Forfeited or expired
|
|
(31.6
|
)
|
|
25.49
|
|
|
|
|
|
|||
Outstanding at June 30, 2014
|
|
1,177.0
|
|
|
19.85
|
|
|
7.8
|
|
$
|
16,527
|
|
|
Exercisable at June 30, 2014
|
|
375.1
|
|
|
15.23
|
|
|
7.3
|
|
6,998
|
|
15.
|
Income Taxes
|
(In thousands)
|
|
|||
Year Ending March 31,
|
Amount
|
|||
2015 (Remaining nine months ending March 31, 2015)
|
$
|
826
|
|
|
2016
|
1,074
|
|
||
2017
|
1,044
|
|
||
2018
|
1,013
|
|
||
2019
|
982
|
|
||
Thereafter
|
560
|
|
||
|
$
|
5,499
|
|
17.
|
Concentrations of Risk
|
|
Three Months Ended June 30, 2014
|
||||||||||||||
(In thousands)
|
North American OTC
Healthcare |
|
International OTC
Healthcare |
|
Household
Cleaning
|
|
Consolidated
|
||||||||
Gross segment revenues
|
$
|
110,973
|
|
|
$
|
13,692
|
|
|
$
|
20,593
|
|
|
$
|
145,258
|
|
Elimination of intersegment revenues
|
(717
|
)
|
|
—
|
|
|
—
|
|
|
(717
|
)
|
||||
Third-party segment revenues
|
110,256
|
|
|
13,692
|
|
|
20,593
|
|
|
144,541
|
|
||||
Other revenues
|
177
|
|
|
35
|
|
|
949
|
|
|
1,161
|
|
||||
Total segment revenues
|
110,433
|
|
|
13,727
|
|
|
21,542
|
|
|
145,702
|
|
||||
Cost of sales
|
42,340
|
|
|
5,078
|
|
|
16,418
|
|
|
63,836
|
|
||||
Gross profit
|
68,093
|
|
|
8,649
|
|
|
5,124
|
|
|
81,866
|
|
||||
Advertising and promotion
|
16,353
|
|
|
2,339
|
|
|
404
|
|
|
19,096
|
|
||||
Contribution margin
|
$
|
51,740
|
|
|
$
|
6,310
|
|
|
$
|
4,720
|
|
|
62,770
|
|
|
Other operating expenses
|
|
|
|
|
|
|
|
|
19,967
|
|
|||||
Operating income
|
|
|
|
|
|
|
|
|
42,803
|
|
|||||
Other expense
|
|
|
|
|
|
|
|
|
14,653
|
|
|||||
Income before income taxes
|
|
|
|
|
|
|
28,150
|
|
|||||||
Provision for income taxes
|
|
|
|
|
|
|
|
|
11,418
|
|
|||||
Net income
|
|
|
|
|
|
|
$
|
16,732
|
|
|
Three Months Ended June 30, 2013
|
||||||||||||||
(In thousands)
|
North American OTC
Healthcare |
|
International OTC
Healthcare |
|
Household
Cleaning
|
|
Consolidated
|
||||||||
Gross segment revenues
|
$
|
118,936
|
|
|
$
|
3,414
|
|
|
$
|
19,292
|
|
|
$
|
141,642
|
|
Elimination of intersegment revenues
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Third-party segment revenues
|
118,936
|
|
|
3,414
|
|
|
19,292
|
|
|
141,642
|
|
||||
Other revenues
|
150
|
|
|
7
|
|
|
713
|
|
|
870
|
|
||||
Total segment revenues
|
119,086
|
|
|
3,421
|
|
|
20,005
|
|
|
142,512
|
|
||||
Cost of sales
|
43,546
|
|
|
1,465
|
|
|
14,477
|
|
|
59,488
|
|
||||
Gross profit
|
75,540
|
|
|
1,956
|
|
|
5,528
|
|
|
83,024
|
|
||||
Advertising and promotion
|
17,551
|
|
|
263
|
|
|
867
|
|
|
18,681
|
|
||||
Contribution margin
|
$
|
57,989
|
|
|
$
|
1,693
|
|
|
$
|
4,661
|
|
|
64,343
|
|
|
Other operating expenses
|
|
|
|
|
|
|
|
|
14,902
|
|
|||||
Operating income
|
|
|
|
|
|
|
|
|
49,441
|
|
|||||
Other expense
|
|
|
|
|
|
|
|
|
15,905
|
|
|||||
Income before income taxes
|
|
|
|
|
|
|
33,536
|
|
|||||||
Provision for income taxes
|
|
|
|
|
|
|
|
|
12,844
|
|
|||||
Net income
|
|
|
|
|
|
|
$
|
20,692
|
|
|
Three Months Ended June 30, 2014
|
|||||||||||
(In thousands)
|
North American OTC
Healthcare |
International OTC
Healthcare |
Household
Cleaning |
Consolidated
|
||||||||
Analgesics
|
$
|
25,031
|
|
$
|
665
|
|
$
|
—
|
|
$
|
25,696
|
|
Cough & Cold
|
20,041
|
|
4,759
|
|
—
|
|
24,800
|
|
||||
Gastrointestinal
|
20,638
|
|
2,897
|
|
—
|
|
23,535
|
|
||||
Eye & Ear Care
|
20,726
|
|
4,642
|
|
—
|
|
25,368
|
|
||||
Dermatologicals
|
11,418
|
|
142
|
|
—
|
|
11,560
|
|
||||
Oral Care
|
10,198
|
|
62
|
|
—
|
|
10,260
|
|
||||
Other OTC
|
2,381
|
|
560
|
|
—
|
|
2,941
|
|
||||
Household Cleaning
|
—
|
|
—
|
|
21,542
|
|
21,542
|
|
||||
Total segment revenues
|
$
|
110,433
|
|
$
|
13,727
|
|
$
|
21,542
|
|
$
|
145,702
|
|
|
Three Months Ended June 30, 2013
|
|||||||||||
(In thousands)
|
North American OTC
Healthcare |
International OTC
Healthcare |
Household
Cleaning |
Consolidated
|
||||||||
Analgesics
|
$
|
28,137
|
|
$
|
29
|
|
$
|
—
|
|
$
|
28,166
|
|
Cough & Cold
|
20,499
|
|
983
|
|
—
|
|
21,482
|
|
||||
Gastrointestinal
|
21,758
|
|
10
|
|
—
|
|
21,768
|
|
||||
Eye & Ear Care
|
20,332
|
|
2,260
|
|
—
|
|
22,592
|
|
||||
Dermatologicals
|
13,786
|
|
91
|
|
—
|
|
13,877
|
|
||||
Oral Care
|
11,085
|
|
48
|
|
—
|
|
11,133
|
|
||||
Other OTC
|
3,489
|
|
—
|
|
—
|
|
3,489
|
|
||||
Household Cleaning
|
—
|
|
—
|
|
20,005
|
|
20,005
|
|
||||
Total segment revenues
|
$
|
119,086
|
|
$
|
3,421
|
|
$
|
20,005
|
|
$
|
142,512
|
|
(In thousands)
|
North American OTC
Healthcare |
|
International OTC
Healthcare |
|
Household
Cleaning
|
|
Consolidated
|
||||||||
Goodwill
|
$
|
160,157
|
|
|
$
|
25,086
|
|
|
$
|
7,389
|
|
|
$
|
192,632
|
|
|
|
|
|
|
|
|
|
||||||||
Intangible assets
|
|
|
|
|
|
|
|
|
|||||||
Indefinite-lived
|
1,123,898
|
|
|
105,721
|
|
|
119,820
|
|
|
1,349,439
|
|
||||
Finite-lived
|
91,407
|
|
|
1,596
|
|
|
25,730
|
|
|
118,733
|
|
||||
Intangible assets, net
|
1,215,305
|
|
|
107,317
|
|
|
145,550
|
|
|
1,468,172
|
|
||||
Total
|
$
|
1,375,462
|
|
|
$
|
132,403
|
|
|
$
|
152,939
|
|
|
$
|
1,660,804
|
|
(In thousands)
|
|
Prestige
Brands
Holdings,
Inc.
|
|
Prestige
Brands,
Inc.,
the issuer
|
|
Combined
Subsidiary
Guarantors
|
|
Combined
Non-
Guarantor
Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||||
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net sales
|
|
$
|
—
|
|
|
$
|
25,410
|
|
|
$
|
108,898
|
|
|
$
|
10,951
|
|
|
$
|
(718
|
)
|
|
$
|
144,541
|
|
Other revenues
|
|
—
|
|
|
130
|
|
|
1,099
|
|
|
402
|
|
|
(470
|
)
|
|
1,161
|
|
||||||
Total revenues
|
|
—
|
|
|
25,540
|
|
|
109,997
|
|
|
11,353
|
|
|
(1,188
|
)
|
|
145,702
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Cost of Sales
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Cost of sales (exclusive of depreciation shown below)
|
|
—
|
|
|
9,448
|
|
|
50,515
|
|
|
4,023
|
|
|
(150
|
)
|
|
63,836
|
|
||||||
Gross profit
|
|
—
|
|
|
16,092
|
|
|
59,482
|
|
|
7,330
|
|
|
(1,038
|
)
|
|
81,866
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Operating Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Advertising and promotion
|
|
—
|
|
|
2,689
|
|
|
14,066
|
|
|
2,341
|
|
|
—
|
|
|
19,096
|
|
||||||
General and administrative
|
|
1,145
|
|
|
2,473
|
|
|
8,990
|
|
|
4,398
|
|
|
—
|
|
|
17,006
|
|
||||||
Depreciation and amortization
|
|
642
|
|
|
145
|
|
|
2,089
|
|
|
85
|
|
|
—
|
|
|
2,961
|
|
||||||
Total operating expenses
|
|
1,787
|
|
|
5,307
|
|
|
25,145
|
|
|
6,824
|
|
|
—
|
|
|
39,063
|
|
||||||
Operating income (loss)
|
|
(1,787
|
)
|
|
10,785
|
|
|
34,337
|
|
|
506
|
|
|
(1,038
|
)
|
|
42,803
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Other (income) expense
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Interest income
|
|
(12,133
|
)
|
|
(14,225
|
)
|
|
(762
|
)
|
|
(29
|
)
|
|
27,117
|
|
|
(32
|
)
|
||||||
Interest expense
|
|
8,548
|
|
|
14,685
|
|
|
17,805
|
|
|
764
|
|
|
(27,117
|
)
|
|
14,685
|
|
||||||
Equity in (income) loss of subsidiaries
|
|
(15,679
|
)
|
|
(10,898
|
)
|
|
959
|
|
|
—
|
|
|
25,618
|
|
|
—
|
|
||||||
Total other (income) expense
|
|
(19,264
|
)
|
|
(10,438
|
)
|
|
18,002
|
|
|
735
|
|
|
25,618
|
|
|
14,653
|
|
||||||
Income before income taxes
|
|
17,477
|
|
|
21,223
|
|
|
16,335
|
|
|
(229
|
)
|
|
(26,656
|
)
|
|
28,150
|
|
||||||
Provision (benefit) for income taxes
|
|
745
|
|
|
3,717
|
|
|
6,226
|
|
|
730
|
|
|
—
|
|
|
11,418
|
|
||||||
Net income (loss)
|
|
$
|
16,732
|
|
|
$
|
17,506
|
|
|
$
|
10,109
|
|
|
$
|
(959
|
)
|
|
$
|
(26,656
|
)
|
|
$
|
16,732
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Comprehensive income, net of tax:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Currency translation adjustments
|
|
2,726
|
|
|
2,726
|
|
|
2,726
|
|
|
2,726
|
|
|
(8,178
|
)
|
|
2,726
|
|
||||||
Total other comprehensive income (loss)
|
|
2,726
|
|
|
2,726
|
|
|
2,726
|
|
|
2,726
|
|
|
(8,178
|
)
|
|
2,726
|
|
||||||
Comprehensive income (loss)
|
|
$
|
19,458
|
|
|
$
|
20,232
|
|
|
$
|
12,835
|
|
|
$
|
1,767
|
|
|
$
|
(34,834
|
)
|
|
$
|
19,458
|
|
(In thousands)
|
|
Prestige
Brands
Holdings,
Inc.
|
|
Prestige
Brands,
Inc.,
the issuer
|
|
Combined
Subsidiary
Guarantors
|
|
Combined
Non-
Guarantor
Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||||
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net sales
|
|
$
|
—
|
|
|
$
|
24,150
|
|
|
$
|
116,269
|
|
|
$
|
1,223
|
|
|
$
|
—
|
|
|
$
|
141,642
|
|
Other revenues
|
|
—
|
|
|
68
|
|
|
863
|
|
|
434
|
|
|
(495
|
)
|
|
870
|
|
||||||
Total revenues
|
|
—
|
|
|
24,218
|
|
|
117,132
|
|
|
1,657
|
|
|
(495
|
)
|
|
142,512
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Cost of Sales
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Cost of sales (exclusive of depreciation shown below)
|
|
—
|
|
|
9,458
|
|
|
49,989
|
|
|
536
|
|
|
(495
|
)
|
|
59,488
|
|
||||||
Gross profit
|
|
—
|
|
|
14,760
|
|
|
67,143
|
|
|
1,121
|
|
|
—
|
|
|
83,024
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Operating Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Advertising and promotion
|
|
—
|
|
|
3,331
|
|
|
15,143
|
|
|
207
|
|
|
—
|
|
|
18,681
|
|
||||||
General and administrative
|
|
1,499
|
|
|
1,643
|
|
|
8,457
|
|
|
35
|
|
|
—
|
|
|
11,634
|
|
||||||
Depreciation and amortization
|
|
517
|
|
|
142
|
|
|
2,595
|
|
|
14
|
|
|
—
|
|
|
3,268
|
|
||||||
Total operating expenses
|
|
2,016
|
|
|
5,116
|
|
|
26,195
|
|
|
256
|
|
|
—
|
|
|
33,583
|
|
||||||
Operating income (loss)
|
|
(2,016
|
)
|
|
9,644
|
|
|
40,948
|
|
|
865
|
|
|
—
|
|
|
49,441
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Other (income) expense
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Interest income
|
|
(12,213
|
)
|
|
(14,323
|
)
|
|
—
|
|
|
(2
|
)
|
|
26,535
|
|
|
(3
|
)
|
||||||
Interest expense
|
|
8,607
|
|
|
15,908
|
|
|
17,928
|
|
|
—
|
|
|
(26,535
|
)
|
|
15,908
|
|
||||||
Equity in (income) loss of subsidiaries
|
|
(19,855
|
)
|
|
(14,553
|
)
|
|
(679
|
)
|
|
—
|
|
|
35,087
|
|
|
—
|
|
||||||
Total other (income) expense
|
|
(23,461
|
)
|
|
(12,968
|
)
|
|
17,249
|
|
|
(2
|
)
|
|
35,087
|
|
|
15,905
|
|
||||||
Income (loss) before income taxes
|
|
21,445
|
|
|
22,612
|
|
|
23,699
|
|
|
867
|
|
|
(35,087
|
)
|
|
33,536
|
|
||||||
Provision for income taxes
|
|
753
|
|
|
3,087
|
|
|
8,816
|
|
|
188
|
|
|
—
|
|
|
12,844
|
|
||||||
Net income (loss)
|
|
$
|
20,692
|
|
|
$
|
19,525
|
|
|
$
|
14,883
|
|
|
$
|
679
|
|
|
$
|
(35,087
|
)
|
|
$
|
20,692
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Comprehensive income, net of tax:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Currency translation adjustments
|
|
1
|
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
1
|
|
|
1
|
|
||||||
Total other comprehensive income (loss)
|
|
1
|
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
1
|
|
|
1
|
|
||||||
Comprehensive income (loss)
|
|
$
|
20,693
|
|
|
$
|
19,525
|
|
|
$
|
14,883
|
|
|
$
|
678
|
|
|
$
|
(35,086
|
)
|
|
$
|
20,693
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
(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
|
|
$
|
10,919
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
4,756
|
|
|
$
|
—
|
|
|
$
|
15,675
|
|
Accounts receivable, net
|
|
6
|
|
|
14,375
|
|
|
36,944
|
|
|
6,913
|
|
|
—
|
|
|
58,238
|
|
||||||
Inventories
|
|
—
|
|
|
11,069
|
|
|
49,131
|
|
|
8,018
|
|
|
(2,047
|
)
|
|
66,171
|
|
||||||
Deferred income tax assets
|
|
261
|
|
|
850
|
|
|
4,475
|
|
|
532
|
|
|
—
|
|
|
6,118
|
|
||||||
Prepaid expenses and other current assets
|
|
7,057
|
|
|
1,033
|
|
|
4,604
|
|
|
1,201
|
|
|
—
|
|
|
13,895
|
|
||||||
Total current assets
|
|
18,243
|
|
|
27,327
|
|
|
95,154
|
|
|
21,420
|
|
|
(2,047
|
)
|
|
160,097
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Property and equipment, net
|
|
8,709
|
|
|
101
|
|
|
210
|
|
|
1,653
|
|
|
—
|
|
|
10,673
|
|
||||||
Goodwill
|
|
—
|
|
|
66,007
|
|
|
101,539
|
|
|
25,086
|
|
|
—
|
|
|
192,632
|
|
||||||
Intangible assets, net
|
|
—
|
|
|
192,727
|
|
|
1,167,882
|
|
|
107,563
|
|
|
—
|
|
|
1,468,172
|
|
||||||
Other long-term assets
|
|
—
|
|
|
22,376
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
22,376
|
|
||||||
Intercompany receivables
|
|
1,204,550
|
|
|
2,344,788
|
|
|
916,054
|
|
|
9,920
|
|
|
(4,475,312
|
)
|
|
—
|
|
||||||
Investment in subsidiary
|
|
1,513,089
|
|
|
842,650
|
|
|
115,930
|
|
|
—
|
|
|
(2,471,669
|
)
|
|
—
|
|
||||||
Total Assets
|
|
$
|
2,744,591
|
|
|
$
|
3,495,976
|
|
|
$
|
2,396,769
|
|
|
$
|
165,642
|
|
|
$
|
(6,949,028
|
)
|
|
$
|
1,853,950
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Liabilities and Stockholders' Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Current liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Accounts payable
|
|
3,480
|
|
|
6,742
|
|
|
30,635
|
|
|
4,422
|
|
|
—
|
|
|
45,279
|
|
||||||
Accrued interest payable
|
|
—
|
|
|
9,449
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
9,449
|
|
||||||
Other accrued liabilities
|
|
2,929
|
|
|
7,027
|
|
|
7,780
|
|
|
5,855
|
|
|
—
|
|
|
23,591
|
|
||||||
Total current liabilities
|
|
6,409
|
|
|
23,218
|
|
|
38,415
|
|
|
10,277
|
|
|
—
|
|
|
78,319
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Long-term debt
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Principal amount
|
|
—
|
|
|
972,500
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
972,500
|
|
||||||
Less unamortized discount
|
|
—
|
|
|
(2,942
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,942
|
)
|
||||||
Long-term debt, net of unamortized discount
|
|
—
|
|
|
969,558
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
969,558
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Deferred income tax liabilities
|
|
—
|
|
|
57,644
|
|
|
162,218
|
|
|
46
|
|
|
—
|
|
|
219,908
|
|
||||||
Long term liabilities
|
|
—
|
|
|
—
|
|
|
—
|
|
|
358
|
|
|
—
|
|
|
358
|
|
||||||
Intercompany payables
|
|
2,152,375
|
|
|
1,000,173
|
|
|
1,283,766
|
|
|
38,998
|
|
|
(4,475,312
|
)
|
|
—
|
|
||||||
Total Liabilities
|
|
2,158,784
|
|
|
2,050,593
|
|
|
1,484,399
|
|
|
49,679
|
|
|
(4,475,312
|
)
|
|
1,268,143
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Stockholders' Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Preferred share rights
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Common stock
|
|
522
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
522
|
|
||||||
Additional paid-in capital
|
|
418,488
|
|
|
1,282,033
|
|
|
758,430
|
|
|
101,806
|
|
|
(2,142,269
|
)
|
|
418,488
|
|
||||||
Treasury stock, at cost - 240 shares
|
|
(2,545
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,545
|
)
|
||||||
Accumulated other comprehensive income (loss), net of tax
|
|
3,465
|
|
|
3,465
|
|
|
3,465
|
|
|
3,465
|
|
|
(10,395
|
)
|
|
3,465
|
|
||||||
Retained earnings (accumulated deficit)
|
|
165,877
|
|
|
159,885
|
|
|
150,475
|
|
|
10,692
|
|
|
(321,052
|
)
|
|
165,877
|
|
||||||
Total Stockholders' Equity
|
|
585,807
|
|
|
1,445,383
|
|
|
912,370
|
|
|
115,963
|
|
|
(2,473,716
|
)
|
|
585,807
|
|
||||||
Total Liabilities and Stockholders' Equity
|
|
$
|
2,744,591
|
|
|
$
|
3,495,976
|
|
|
$
|
2,396,769
|
|
|
$
|
165,642
|
|
|
$
|
(6,949,028
|
)
|
|
$
|
1,853,950
|
|
(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
|
|
$
|
24,644
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3,687
|
|
|
$
|
—
|
|
|
$
|
28,331
|
|
Accounts receivable, net
|
|
473
|
|
|
14,245
|
|
|
45,885
|
|
|
4,447
|
|
|
—
|
|
|
65,050
|
|
||||||
Inventories
|
|
—
|
|
|
14,357
|
|
|
46,309
|
|
|
5,930
|
|
|
(1,010
|
)
|
|
65,586
|
|
||||||
Deferred income tax assets
|
|
260
|
|
|
925
|
|
|
4,914
|
|
|
445
|
|
|
—
|
|
|
6,544
|
|
||||||
Prepaid expenses and other current assets
|
|
8,004
|
|
|
113
|
|
|
2,898
|
|
|
659
|
|
|
—
|
|
|
11,674
|
|
||||||
Total current assets
|
|
33,381
|
|
|
29,640
|
|
|
100,006
|
|
|
15,168
|
|
|
(1,010
|
)
|
|
177,185
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Property and equipment, net
|
|
8,966
|
|
|
112
|
|
|
226
|
|
|
293
|
|
|
—
|
|
|
9,597
|
|
||||||
Goodwill
|
|
—
|
|
|
66,007
|
|
|
101,540
|
|
|
23,364
|
|
|
—
|
|
|
190,911
|
|
||||||
Intangible assets, net
|
|
—
|
|
|
192,861
|
|
|
1,169,943
|
|
|
32,013
|
|
|
—
|
|
|
1,394,817
|
|
||||||
Other long-term assets
|
|
—
|
|
|
23,153
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
23,153
|
|
||||||
Intercompany receivable
|
|
655,146
|
|
|
1,824,482
|
|
|
656,759
|
|
|
13,595
|
|
|
(3,149,982
|
)
|
|
—
|
|
||||||
Investment in subsidiary
|
|
1,497,357
|
|
|
749,947
|
|
|
34,562
|
|
|
—
|
|
|
(2,281,866
|
)
|
|
—
|
|
||||||
Total Assets
|
|
$
|
2,194,850
|
|
|
$
|
2,886,202
|
|
|
$
|
2,063,036
|
|
|
$
|
84,433
|
|
|
$
|
(5,432,858
|
)
|
|
$
|
1,795,663
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Liabilities and Stockholders' Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Current liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Accounts payable
|
|
$
|
4,416
|
|
|
$
|
7,658
|
|
|
$
|
33,553
|
|
|
$
|
2,659
|
|
|
$
|
—
|
|
|
$
|
48,286
|
|
Accrued interest payable
|
|
—
|
|
|
9,626
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
9,626
|
|
||||||
Other accrued liabilities
|
|
7,728
|
|
|
2,117
|
|
|
13,443
|
|
|
3,158
|
|
|
—
|
|
|
26,446
|
|
||||||
Total current liabilities
|
|
12,144
|
|
|
19,401
|
|
|
46,996
|
|
|
5,817
|
|
|
—
|
|
|
84,358
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Long-term debt
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Principal amount
|
|
—
|
|
|
937,500
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
937,500
|
|
||||||
Less unamortized discount
|
|
—
|
|
|
(3,086
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,086
|
)
|
||||||
Long-term debt, net of unamortized discount
|
|
—
|
|
|
934,414
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
934,414
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Deferred income tax liabilities
|
|
—
|
|
|
56,827
|
|
|
156,327
|
|
|
50
|
|
|
—
|
|
|
213,204
|
|
||||||
Other long-term liabilities
|
|
—
|
|
|
—
|
|
|
—
|
|
|
327
|
|
|
—
|
|
|
327
|
|
||||||
Intercompany payable
|
|
1,619,346
|
|
|
451,497
|
|
|
1,037,105
|
|
|
42,034
|
|
|
(3,149,982
|
)
|
|
—
|
|
||||||
Total Liabilities
|
|
1,631,490
|
|
|
1,462,139
|
|
|
1,240,428
|
|
|
48,228
|
|
|
(3,149,982
|
)
|
|
1,232,303
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Stockholders' Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Common stock
|
|
520
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
520
|
|
||||||
Additional paid-in capital
|
|
414,387
|
|
|
1,280,945
|
|
|
681,503
|
|
|
23,815
|
|
|
(1,986,263
|
)
|
|
414,387
|
|
||||||
Treasury stock, at cost - 206 shares
|
|
(1,431
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,431
|
)
|
||||||
Accumulated other comprehensive income (loss), net of tax
|
|
739
|
|
|
739
|
|
|
739
|
|
|
739
|
|
|
(2,217
|
)
|
|
739
|
|
||||||
Retained earnings (accumulated deficit)
|
|
149,145
|
|
|
142,379
|
|
|
140,366
|
|
|
11,651
|
|
|
(294,396
|
)
|
|
149,145
|
|
||||||
Total Stockholders' Equity
|
|
563,360
|
|
|
1,424,063
|
|
|
822,608
|
|
|
36,205
|
|
|
(2,282,876
|
)
|
|
563,360
|
|
||||||
Total Liabilities and Stockholders' Equity
|
|
$
|
2,194,850
|
|
|
$
|
2,886,202
|
|
|
$
|
2,063,036
|
|
|
$
|
84,433
|
|
|
$
|
(5,432,858
|
)
|
|
$
|
1,795,663
|
|
(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)
|
|
$
|
16,732
|
|
|
$
|
17,506
|
|
|
$
|
10,109
|
|
|
$
|
(959
|
)
|
|
$
|
(26,656
|
)
|
|
$
|
16,732
|
|
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Depreciation and amortization
|
|
642
|
|
|
145
|
|
|
2,089
|
|
|
85
|
|
|
—
|
|
|
2,961
|
|
||||||
Deferred income taxes
|
|
(1
|
)
|
|
892
|
|
|
6,330
|
|
|
(81
|
)
|
|
—
|
|
|
7,140
|
|
||||||
Amortization of deferred financing costs
|
|
|
|
|
851
|
|
|
|
|
|
|
|
|
|
|
|
851
|
|
||||||
Stock-based compensation costs
|
|
1,858
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,858
|
|
||||||
Amortization of debt discount
|
|
|
|
144
|
|
|
|
|
|
|
|
|
144
|
|
||||||||||
Equity in income of subsidiaries
|
|
(15,679
|
)
|
|
(10,898
|
)
|
|
959
|
|
|
—
|
|
|
25,618
|
|
|
—
|
|
||||||
Changes in operating assets and liabilities, net of effects from acquisitions:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Accounts receivable
|
|
467
|
|
|
(130
|
)
|
|
8,941
|
|
|
(2,322
|
)
|
|
—
|
|
|
6,956
|
|
||||||
Inventories
|
|
—
|
|
|
3,288
|
|
|
(2,822
|
)
|
|
36
|
|
|
1,038
|
|
|
1,540
|
|
||||||
Prepaid expenses and other current assets
|
|
947
|
|
|
(920
|
)
|
|
(1,706
|
)
|
|
(524
|
)
|
|
—
|
|
|
(2,203
|
)
|
||||||
Accounts payable
|
|
(936
|
)
|
|
(916
|
)
|
|
(2,918
|
)
|
|
1,674
|
|
|
—
|
|
|
(3,096
|
)
|
||||||
Accrued liabilities
|
|
(4,800
|
)
|
|
4,733
|
|
|
(5,663
|
)
|
|
2,518
|
|
|
—
|
|
|
(3,212
|
)
|
||||||
Net cash provided by (used in) operating activities
|
|
(770
|
)
|
|
14,695
|
|
|
15,319
|
|
|
427
|
|
|
—
|
|
|
29,671
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Investing Activities
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Purchases of property and equipment
|
|
(385
|
)
|
|
|
|
|
(11
|
)
|
|
(100
|
)
|
|
|
|
|
(496
|
)
|
||||||
Acquisition of the Hydralyte brand
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(77,991
|
)
|
|
—
|
|
|
(77,991
|
)
|
||||||
Intercompany activity, net
|
|
|
|
|
(77,991
|
)
|
|
|
|
77,991
|
|
|
|
|
—
|
|
||||||||
Net cash (used in) provided by investing activities
|
|
(385
|
)
|
|
(77,991
|
)
|
|
(11
|
)
|
|
(100
|
)
|
|
—
|
|
|
(78,487
|
)
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Financing Activities
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Repayments under revolving credit agreement
|
|
—
|
|
|
(30,000
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(30,000
|
)
|
||||||
Borrowings under revolving credit agreement
|
|
—
|
|
|
65,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
65,000
|
|
||||||
Payment of deferred financing costs
|
|
—
|
|
|
(74
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(74
|
)
|
||||||
Proceeds from exercise of stock options
|
|
1,294
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,294
|
|
||||||
Proceeds from exercise of restricted stock exercises
|
|
57
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
57
|
|
||||||
Excess tax benefits from share-based awards
|
|
950
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
950
|
|
||||||
Shares surrendered as payment of tax withholding
|
|
(1,171
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,171
|
)
|
||||||
Intercompany activity, net
|
|
(13,700
|
)
|
|
28,370
|
|
|
(15,308
|
)
|
|
638
|
|
|
—
|
|
|
—
|
|
||||||
Net cash provided by (used in) financing activities
|
|
(12,570
|
)
|
|
63,296
|
|
|
(15,308
|
)
|
|
638
|
|
|
—
|
|
|
36,056
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Effect of exchange rate changes on cash and cash equivalents
|
|
—
|
|
|
—
|
|
|
—
|
|
|
104
|
|
|
—
|
|
|
104
|
|
||||||
(Decrease) increase in cash and cash equivalents
|
|
(13,725
|
)
|
|
—
|
|
|
—
|
|
|
1,069
|
|
|
—
|
|
|
(12,656
|
)
|
||||||
Cash and cash equivalents - beginning of period
|
|
24,644
|
|
|
—
|
|
|
—
|
|
|
3,687
|
|
|
—
|
|
|
28,331
|
|
||||||
Cash and cash equivalents - end of period
|
|
$
|
10,919
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
4,756
|
|
|
$
|
—
|
|
|
$
|
15,675
|
|
(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)
|
|
$
|
20,692
|
|
|
$
|
19,525
|
|
|
$
|
14,883
|
|
|
$
|
679
|
|
|
$
|
(35,087
|
)
|
|
$
|
20,692
|
|
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Depreciation and amortization
|
|
517
|
|
|
142
|
|
|
2,595
|
|
|
14
|
|
|
—
|
|
|
3,268
|
|
||||||
Deferred income taxes
|
|
(21
|
)
|
|
529
|
|
|
6,291
|
|
|
(2
|
)
|
|
—
|
|
|
6,797
|
|
||||||
Amortization of deferred financing costs
|
|
—
|
|
|
892
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
892
|
|
||||||
Stock-based compensation costs
|
|
1,193
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,193
|
|
||||||
Amortization of debt discount
|
|
—
|
|
|
345
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
345
|
|
||||||
Gain on sale of assets
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
||||||
Equity in income of subsidiaries
|
|
(19,855
|
)
|
|
(14,553
|
)
|
|
(679
|
)
|
|
—
|
|
|
35,087
|
|
|
—
|
|
||||||
Changes in operating assets and liabilities, net of effects from acquisitions:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Accounts receivable
|
|
(122
|
)
|
|
2,362
|
|
|
9,125
|
|
|
(295
|
)
|
|
—
|
|
|
11,070
|
|
||||||
Inventories
|
|
—
|
|
|
(623
|
)
|
|
(6,142
|
)
|
|
49
|
|
|
—
|
|
|
(6,716
|
)
|
||||||
Prepaid expenses and other current assets
|
|
2,100
|
|
|
(630
|
)
|
|
(1,269
|
)
|
|
(14
|
)
|
|
—
|
|
|
187
|
|
||||||
Accounts payable
|
|
(417
|
)
|
|
(2,960
|
)
|
|
(6,178
|
)
|
|
408
|
|
|
—
|
|
|
(9,147
|
)
|
||||||
Accrued liabilities
|
|
(5,468
|
)
|
|
246
|
|
|
(741
|
)
|
|
182
|
|
|
—
|
|
|
(5,781
|
)
|
||||||
Net cash provided by (used in) operating activities
|
|
(1,381
|
)
|
|
5,275
|
|
|
17,883
|
|
|
1,021
|
|
|
—
|
|
|
22,798
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Investing Activities
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Purchases of property and equipment
|
|
(1,364
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,364
|
)
|
||||||
Proceeds from sale of property and equipment
|
|
—
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|
—
|
|
|
2
|
|
||||||
Net cash (used in) provided by investing activities
|
|
(1,364
|
)
|
|
—
|
|
|
2
|
|
|
—
|
|
|
—
|
|
|
(1,362
|
)
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Financing Activities
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Repayments under revolving credit agreement
|
|
—
|
|
|
(18,000
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(18,000
|
)
|
||||||
Payment of deferred financing costs
|
|
—
|
|
|
(280
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(280
|
)
|
||||||
Proceeds from exercise of stock options
|
|
309
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
309
|
|
||||||
Shares surrendered as payment of tax withholding
|
|
(278
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(278
|
)
|
||||||
Excess tax benefits from share-based awards
|
|
452
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
452
|
|
||||||
Intercompany activity, net
|
|
5,867
|
|
|
13,005
|
|
|
(17,885
|
)
|
|
(987
|
)
|
|
—
|
|
|
—
|
|
||||||
Net cash (used in) provided by financing activities
|
|
6,350
|
|
|
(5,275
|
)
|
|
(17,885
|
)
|
|
(987
|
)
|
|
—
|
|
|
(17,797
|
)
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Effect of exchange rate changes on cash and cash equivalents
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3
|
)
|
|
—
|
|
|
(3
|
)
|
||||||
Increase in cash and cash equivalents
|
|
3,605
|
|
|
—
|
|
|
—
|
|
|
31
|
|
|
—
|
|
|
3,636
|
|
||||||
Cash and cash equivalents - beginning of period
|
|
14,720
|
|
|
—
|
|
|
—
|
|
|
950
|
|
|
—
|
|
|
15,670
|
|
||||||
Cash and cash equivalents - end of period
|
|
$
|
18,325
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
981
|
|
|
$
|
—
|
|
|
$
|
19,306
|
|
ITEM 2.
|
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
See also “Cautionary Statement Regarding Forward-Looking Statements” on page
49
of this Quarterly Report on Form 10-Q.
|
(In thousands)
|
April 30, 2014
|
|
|
|
|
||
Inventories
|
$
|
1,970
|
|
Property, plant and equipment
|
1,267
|
|
|
Goodwill
|
1,224
|
|
|
Intangible assets
|
73,580
|
|
|
Total assets acquired
|
78,041
|
|
|
|
|
||
Accrued expenses
|
38
|
|
|
Other long term liabilities
|
12
|
|
|
Total liabilities assumed
|
50
|
|
|
Net assets acquired
|
$
|
77,991
|
|
(In thousands)
|
July 1, 2013
|
|
|
|
|
||
Cash acquired
|
$
|
1,546
|
|
Accounts receivable
|
1,658
|
|
|
Inventories
|
2,465
|
|
|
Deferred Income Taxes
|
283
|
|
|
Prepaids and other current assets
|
647
|
|
|
Property, plant and equipment
|
163
|
|
|
Goodwill
|
23,122
|
|
|
Intangible assets
|
31,502
|
|
|
Total assets acquired
|
61,386
|
|
|
|
|
||
Accounts payable
|
1,537
|
|
|
Accrued expenses
|
2,788
|
|
|
Other long term liabilities
|
300
|
|
|
Total liabilities assumed
|
4,625
|
|
|
Net assets acquired
|
$
|
56,761
|
|
|
Three Months Ended June 30,
|
||||||||||||
(In thousands)
|
2014
|
%
|
2013
|
%
|
Increase (Decrease)
|
%
|
|||||||
North American OTC Healthcare
|
|
|
|
|
|
||||||||
Analgesics
|
$
|
25,031
|
|
17.2
|
$
|
28,137
|
|
19.7
|
$
|
(3,106
|
)
|
(11.0
|
)
|
Cough & Cold
|
20,041
|
|
13.8
|
20,499
|
|
14.4
|
(458
|
)
|
(2.2
|
)
|
|||
Gastrointestinal
|
20,638
|
|
14.2
|
21,758
|
|
15.3
|
(1,120
|
)
|
(5.1
|
)
|
|||
Eye & Ear Care
|
20,726
|
|
14.2
|
20,332
|
|
14.3
|
394
|
|
1.9
|
|
|||
Dermatologicals
|
11,418
|
|
7.8
|
13,786
|
|
9.7
|
(2,368
|
)
|
(17.2
|
)
|
|||
Oral Care
|
10,198
|
|
7.0
|
11,085
|
|
7.8
|
(887
|
)
|
(8.0
|
)
|
|||
Other OTC
|
2,381
|
|
1.6
|
3,489
|
|
2.4
|
(1,108
|
)
|
(31.8
|
)
|
|||
Total North American OTC Healthcare
|
110,433
|
|
75.8
|
119,086
|
|
83.6
|
(8,653
|
)
|
(7.3
|
)
|
|||
|
|
|
|
|
|
|
|||||||
International OTC Healthcare
|
|
|
|
|
|
||||||||
Analgesics
|
665
|
|
0.5
|
29
|
|
—
|
636
|
|
(*)
|
|
|||
Cough & Cold
|
4,759
|
|
3.3
|
983
|
|
0.7
|
3,776
|
|
(*)
|
|
|||
Gastrointestinal
|
2,897
|
|
2.0
|
10
|
|
—
|
2,887
|
|
(*)
|
|
|||
Eye & Ear Care
|
4,642
|
|
3.2
|
2,260
|
|
1.6
|
2,382
|
|
105.4
|
|
|||
Dermatologicals
|
142
|
|
0.1
|
91
|
|
0.1
|
51
|
|
56.0
|
|
|||
Oral Care
|
62
|
|
—
|
48
|
|
—
|
14
|
|
29.2
|
|
|||
Other OTC
|
560
|
|
0.4
|
—
|
|
—
|
560
|
|
(*)
|
|
|||
Total International OTC Healthcare
|
13,727
|
|
9.4
|
3,421
|
|
2.4
|
10,306
|
|
(*)
|
|
|||
|
|
|
|
|
|
|
|||||||
Total OTC Healthcare
|
124,160
|
|
85.2
|
122,507
|
|
86.0
|
1,653
|
|
1.3
|
|
|||
Household Cleaning
|
21,542
|
|
14.8
|
20,005
|
|
14.0
|
1,537
|
|
7.7
|
|
|||
Total Consolidated
|
$
|
145,702
|
|
100.0
|
$
|
142,512
|
|
100.0
|
$
|
3,190
|
|
2.2
|
|
|
Three Months Ended June 30,
|
|||||||||||||||||
(Amounts in thousands)
|
|
|
|
|
|
|
|
|
Increase (Decrease)
|
|||||||||
Cost of Sales
|
2014
|
|
%
|
|
2013
|
|
%
|
|
Amount
|
|
%
|
|||||||
North American OTC Healthcare
|
$
|
42,340
|
|
|
38.3
|
|
$
|
43,546
|
|
|
36.6
|
|
$
|
(1,206
|
)
|
|
(2.8
|
)
|
International OTC Healthcare
|
5,078
|
|
|
37.0
|
|
1,465
|
|
|
42.8
|
|
3,613
|
|
|
246.6
|
|
|||
Household Cleaning
|
16,418
|
|
|
76.2
|
|
14,477
|
|
|
72.4
|
|
1,941
|
|
|
13.4
|
|
|||
|
$
|
63,836
|
|
|
43.8
|
|
$
|
59,488
|
|
|
41.7
|
|
$
|
4,348
|
|
|
7.3
|
|
|
Three Months Ended June 30,
|
|||||||||||||||||
(Amounts in thousands)
|
|
|
|
|
|
|
|
|
Increase (Decrease)
|
|||||||||
Gross Profit
|
2014
|
|
%
|
|
2013
|
|
%
|
|
Amount
|
|
%
|
|||||||
North American OTC Healthcare
|
$
|
68,093
|
|
|
61.7
|
|
$
|
75,540
|
|
|
63.4
|
|
$
|
(7,447
|
)
|
|
(9.9
|
)
|
International OTC Healthcare
|
8,649
|
|
|
63.0
|
|
1,956
|
|
|
57.2
|
|
6,693
|
|
|
342.2
|
|
|||
Household Cleaning
|
5,124
|
|
|
23.8
|
|
5,528
|
|
|
27.6
|
|
(404
|
)
|
|
(7.3
|
)
|
|||
|
$
|
81,866
|
|
|
56.2
|
|
$
|
83,024
|
|
|
58.3
|
|
$
|
(1,158
|
)
|
|
(1.4
|
)
|
|
Three Months Ended June 30,
|
|||||||||||||||||
(Amounts in thousands)
|
|
|
|
|
|
|
|
|
Increase (Decrease)
|
|||||||||
Contribution Margin
|
2014
|
|
%
|
|
2013
|
|
%
|
|
Amount
|
|
%
|
|||||||
North American OTC Healthcare
|
$
|
51,740
|
|
|
46.9
|
|
$
|
57,989
|
|
|
48.7
|
|
$
|
(6,249
|
)
|
|
(10.8
|
)
|
International OTC Healthcare
|
6,310
|
|
|
46.0
|
|
1,693
|
|
|
49.5
|
|
4,617
|
|
|
272.7
|
|
|||
Household Cleaning
|
4,720
|
|
|
21.9
|
|
4,661
|
|
|
23.3
|
|
59
|
|
|
1.3
|
|
|||
|
$
|
62,770
|
|
|
43.1
|
|
$
|
64,343
|
|
|
45.1
|
|
$
|
(1,573
|
)
|
|
(2.4
|
)
|
|
Three Months Ended June 30,
|
||||||
(In thousands)
|
2014
|
|
2013
|
||||
Cash provided by (used in):
|
|
|
|
||||
Operating Activities
|
$
|
29,671
|
|
|
$
|
22,798
|
|
Investing Activities
|
(78,487
|
)
|
|
(1,362
|
)
|
||
Financing Activities
|
36,056
|
|
|
(17,797
|
)
|
•
|
$250.0 million
of 8.125% 2012 Senior Notes due 2020;
|
•
|
$400.0 million
of 5.375% 2013 Senior Notes due 2021;
|
•
|
$287.5 million
of borrowings under the 2012 Term Loan; and.
|
•
|
$35.0 million
of borrowings under the 2012 ABL Revolver.
|
•
|
Have a leverage ratio of less than
6.00 to 1.0
for the quarter ended
June 30, 2014
(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”)).
|
•
|
Have an interest coverage ratio of greater than
2.0 to 1.0
for the quarter ended
June 30, 2014
(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, 2014
(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)
|
North American OTC
Healthcare |
|
International OTC
Healthcare |
|
Household
Cleaning
|
|
Consolidated
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Goodwill
|
$
|
160,157
|
|
|
$
|
25,086
|
|
|
$
|
7,389
|
|
|
$
|
192,632
|
|
|
|
|
|
|
|
|
|
|
|||||||
Intangible assets, net
|
|
|
|
|
|
|
|
|
|||||||
Indefinite-lived:
|
|
|
|
|
|
|
|
|
|||||||
Analgesics
|
341,123
|
|
|
2,549
|
|
|
—
|
|
|
343,672
|
|
||||
Cough & Cold
|
185,453
|
|
|
23,693
|
|
|
—
|
|
|
209,146
|
|
||||
Gastrointestinal
|
213,639
|
|
|
77,402
|
|
|
—
|
|
|
291,041
|
|
||||
Eye & Ear Care
|
172,318
|
|
|
—
|
|
|
—
|
|
|
172,318
|
|
||||
Dermatologicals
|
149,927
|
|
|
—
|
|
|
—
|
|
|
149,927
|
|
||||
Oral Care
|
61,438
|
|
|
—
|
|
|
—
|
|
|
61,438
|
|
||||
Other OTC
|
—
|
|
|
2,077
|
|
|
—
|
|
|
2,077
|
|
||||
Household Cleaning
|
—
|
|
|
|
|
119,820
|
|
|
119,820
|
|
|||||
Total indefinite-lived intangible assets, net
|
1,123,898
|
|
|
105,721
|
|
|
119,820
|
|
|
1,349,439
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Finite-lived:
|
|
|
|
|
|
|
|
|
|||||||
Analgesics
|
4,053
|
|
|
—
|
|
|
—
|
|
|
4,053
|
|
||||
Cough & Cold
|
20,173
|
|
|
825
|
|
|
—
|
|
|
20,998
|
|
||||
Gastrointestinal
|
11,956
|
|
|
287
|
|
|
—
|
|
|
12,243
|
|
||||
Eye & Ear Care
|
7,903
|
|
|
—
|
|
|
—
|
|
|
7,903
|
|
||||
Dermatologicals
|
5,268
|
|
|
—
|
|
|
—
|
|
|
5,268
|
|
||||
Oral Care
|
16,860
|
|
|
—
|
|
|
—
|
|
|
16,860
|
|
||||
Other OTC
|
25,194
|
|
|
484
|
|
|
—
|
|
|
25,678
|
|
||||
Household Cleaning
|
—
|
|
|
—
|
|
|
25,730
|
|
|
25,730
|
|
||||
Total finite-lived intangible assets, net
|
91,407
|
|
|
1,596
|
|
|
25,730
|
|
|
118,733
|
|
||||
Total intangible assets, net
|
1,215,305
|
|
|
107,317
|
|
|
145,550
|
|
|
1,468,172
|
|
||||
Total goodwill and intangible assets, net
|
$
|
1,375,462
|
|
|
$
|
132,403
|
|
|
$
|
152,939
|
|
|
$
|
1,660,804
|
|
•
|
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 in our industry and markets;
|
•
|
Our ability to increase organic growth via new product introductions or line extensions;
|
•
|
Our ability to invest successfully in research and development;
|
•
|
Our dependence on a limited number of customers for a large portion of our sales;
|
•
|
Changes in inventory management practices by retailers;
|
•
|
Our ability to grow our international sales;
|
•
|
General economic conditions affecting sales of our products and their respective markets;
|
•
|
Business, regulatory and other conditions affecting retailers;
|
•
|
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 diverting managerial resources, the incurrence of additional liabilities or integration problems associated with such transactions;
|
•
|
Actions of government agencies in connection with our products or regulatory matters governing our industry;
|
•
|
Product liability claims, product 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 and possible changes in their value;
|
•
|
Our dependence on key personnel;
|
•
|
Shortages of supply of sourced goods or interruptions in the manufacturing of our products;
|
•
|
The costs associated with any claims in litigation or arbitration and any adverse judgments rendered in such 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
|
•
|
Increases and decreases in quarterly revenues and profitability;
|
•
|
The timing of when we make acquisitions or introduce new products;
|
•
|
Our inability to increase the sales of our existing products and expand their distribution;
|
•
|
The timing of the introduction or return to the market of competitive products and the introduction of store brand products;
|
•
|
Adverse regulatory actions or market events in the United States or in our international markets;
|
•
|
Changes in consumer preferences, spending habits and competitive conditions, including the effects of competitors’ operational, promotional or expansion activities;
|
•
|
Seasonality of our products;
|
•
|
Fluctuations in commodity prices, product costs, utilities and energy costs, prevailing wage rates, insurance costs and other costs;
|
•
|
The discontinuation and return of our products from retailers;
|
•
|
Our ability to recruit, train and retain qualified employees, and the costs associated with those activities;
|
•
|
Changes in advertising and promotional activities and expansion to new markets;
|
•
|
Negative publicity relating to us and the products we sell;
|
•
|
Litigation matters;
|
•
|
Unanticipated increases in infrastructure costs;
|
•
|
Impairment of goodwill or long-lived assets;
|
•
|
Changes in interest rates; and
|
•
|
Changes in accounting, tax, regulatory or other rules applicable to our business.
|
•
|
Political instability or declining economic conditions in the countries or regions where we operate that adversely affect sales of our products;
|
•
|
Currency controls that restrict or prohibit the payment of funds or the repatriation of earnings to the United States;
|
•
|
Fluctuating foreign exchange rates that result in unfavorable increases in the price of our products or cause increases in the cost of certain products purchased from our foreign third-party manufacturers;
|
•
|
Trade restrictions and exchange controls;
|
•
|
Inability to protect our intellectual property rights in these markets; and
|
•
|
Increased costs of compliance with general business and tax regulations in these countries or regions.
|
•
|
Increase our vulnerability to general adverse economic and industry conditions;
|
•
|
Limit our ability to engage in strategic acquisitions;
|
•
|
Require us to dedicate a substantial portion of our cash flow from operations toward repayment of our indebtedness, thereby reducing the availability of our cash flow to fund working capital, capital expenditures, acquisitions and investments and other general corporate purposes;
|
•
|
Limit our flexibility in planning for, or reacting to, changes in our business and the markets in which we operate;
|
•
|
Place us at a competitive disadvantage compared to our competitors that have less debt; and
|
•
|
Limit, among other things, our ability to borrow additional funds on favorable terms or at all.
|
•
|
changes in the income allocation methods for state taxes, and the determination of which states or countries have jurisdiction to tax our Company;
|
•
|
an increase in non-deductible expenses for tax purposes, including certain stock-based compensation, executive compensation and impairment of goodwill;
|
•
|
transfer pricing adjustments;
|
•
|
tax assessments resulting from income tax audits or any related tax interest or penalties that could significantly affect our income tax provision for the period in which the settlement takes place;
|
•
|
a change in our decision to indefinitely reinvest foreign earnings;
|
•
|
changes in accounting principles; and
|
•
|
changes in tax laws or related interpretations, accounting standards, regulations, and interpretations in multiple tax jurisdictions in which we operate.
|
Director Nominee
|
For
|
Withheld
|
Broker Non-Votes
|
Matthew Mannelly
|
47,109,414
|
1,061,533
|
1,316,970
|
John Byom
|
47,121,181
|
1,049,766
|
1,316,970
|
Gary Costley
|
46,986,267
|
1,184,680
|
1,316,970
|
Charles Hinkaty
|
47,120,232
|
1,050,715
|
1,316,970
|
Carl Johnson
|
47,845,365
|
325,582
|
1,316,970
|
For
|
Against
|
Abstentions
|
49,013,582
|
395,399
|
78,936
|
For
|
Against
|
Abstentions
|
Broker Non-Votes
|
44,836,881
|
3,246,317
|
87,749
|
1,316,970
|
For
|
Against
|
Abstentions
|
Broker Non-Votes
|
45,545,611
|
1,704,434
|
920,902
|
1,316,970
|
|
|
PRESTIGE BRANDS HOLDINGS, INC.
|
|
|
|
|
|
|
|
|
|
|
|
|
Date:
|
August 7, 2014
|
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.
|
RA 660 WHITE PLAINS ROAD LLC
|
|
By:
/s/ Richard J. Conniff
|
Name: Richard J. Conniff
|
Title: Authorized Person
|
PRESTIGE BRANDS, INC.
|
|
By:
/s/ Ron Lombardi
|
Name: Ron Lombardi
|
Title: Chief Financial Officer
|
PRESTIGE BRANDS HOLDINGS, INC.
|
By:
/s/ Ron Lombardi
|
Name: Ron Lombardi
|
Title: Chief Financial 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 7, 2014
|
/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 7, 2014
|
/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 7, 2014
|
|
|
|
|
|
|
/s/ Ronald M. Lombardi
|
|
Name: Ronald M. Lombardi
|
|
Title: Chief Financial Officer
|
|
(Principal Financial Officer)
|
|
Date: August 7, 2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|