[ 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 September 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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Item 1.
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Financial Statements
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Consolidated Statements of Income and Comprehensive Income for the three and six months ended September 30, 2014 and 2013 (unaudited)
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Consolidated Balance Sheets as of September 30, 2014 (unaudited) and March 31, 2014
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Consolidated Statements of Cash Flows for the six months ended September 30, 2014 and 2013 (unaudited)
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Notes to Consolidated Financial Statements (unaudited)
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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 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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FINANCIAL STATEMENTS
|
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Three Months Ended September 30,
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Six Months Ended September 30,
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||||||||||||
(In thousands, except per share data)
|
2014
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2013
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2014
|
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2013
|
||||||||
Revenues
|
|
|
|
|
|
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||||||||
Net sales
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$
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180,005
|
|
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$
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165,507
|
|
|
$
|
324,546
|
|
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$
|
307,149
|
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Other revenues
|
1,264
|
|
|
1,438
|
|
|
2,425
|
|
|
2,308
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|
||||
Total revenues
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181,269
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|
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166,945
|
|
|
326,971
|
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|
309,457
|
|
||||
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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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78,727
|
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|
73,723
|
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|
142,563
|
|
|
133,211
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|
||||
Gross profit
|
102,542
|
|
|
93,222
|
|
|
184,408
|
|
|
176,246
|
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||||
|
|
|
|
|
|
|
|
||||||||
Operating Expenses
|
|
|
|
|
|
|
|
|
|
|
|
||||
Advertising and promotion
|
25,044
|
|
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24,547
|
|
|
44,140
|
|
|
43,228
|
|
||||
General and administrative
|
27,128
|
|
|
11,619
|
|
|
44,134
|
|
|
23,253
|
|
||||
Depreciation and amortization
|
3,852
|
|
|
3,294
|
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6,813
|
|
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6,562
|
|
||||
Total operating expenses
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56,024
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39,460
|
|
|
95,087
|
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73,043
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||||
Operating income
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46,518
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|
|
53,762
|
|
|
89,321
|
|
|
103,203
|
|
||||
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|
|
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|
|
|
|
||||||||
Other (income) expense
|
|
|
|
|
|
|
|
|
|
|
|
||||
Interest income
|
(15
|
)
|
|
(25
|
)
|
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(47
|
)
|
|
(28
|
)
|
||||
Interest expense
|
18,208
|
|
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16,464
|
|
|
32,893
|
|
|
32,372
|
|
||||
Total other expense
|
18,193
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|
|
16,439
|
|
|
32,846
|
|
|
32,344
|
|
||||
Income before income taxes
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28,325
|
|
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37,323
|
|
|
56,475
|
|
|
70,859
|
|
||||
Provision for income taxes
|
11,862
|
|
|
4,531
|
|
|
23,280
|
|
|
17,375
|
|
||||
Net income
|
$
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16,463
|
|
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$
|
32,792
|
|
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$
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33,195
|
|
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$
|
53,484
|
|
|
|
|
|
|
|
|
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||||||||
Earnings per share:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic
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$
|
0.32
|
|
|
$
|
0.64
|
|
|
$
|
0.64
|
|
|
$
|
1.04
|
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Diluted
|
$
|
0.31
|
|
|
$
|
0.63
|
|
|
$
|
0.63
|
|
|
$
|
1.03
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted average shares outstanding:
|
|
|
|
|
|
|
|
|
|
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|
||||
Basic
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52,088
|
|
|
51,463
|
|
|
52,023
|
|
|
51,343
|
|
||||
Diluted
|
52,594
|
|
|
52,219
|
|
|
52,564
|
|
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52,130
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||||
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|
|
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||||||||
Comprehensive income, net of tax:
|
|
|
|
|
|
|
|
||||||||
Currency translation adjustments
|
(10,830
|
)
|
|
1,122
|
|
|
(8,104
|
)
|
|
1,123
|
|
||||
Total other comprehensive (loss) income
|
(10,830
|
)
|
|
1,122
|
|
|
(8,104
|
)
|
|
1,123
|
|
||||
Comprehensive income
|
$
|
5,633
|
|
|
$
|
33,914
|
|
|
$
|
25,091
|
|
|
$
|
54,607
|
|
(In thousands)
|
September 30,
2014 |
|
March 31,
2014 |
||||
Assets
|
|
|
|
||||
Current assets
|
|
|
|
||||
Cash and cash equivalents
|
$
|
21,748
|
|
|
$
|
28,331
|
|
Accounts receivable, net
|
98,644
|
|
|
65,050
|
|
||
Inventories
|
82,875
|
|
|
65,586
|
|
||
Deferred income tax assets
|
9,171
|
|
|
6,544
|
|
||
Prepaid expenses and other current assets
|
9,935
|
|
|
11,674
|
|
||
Total current assets
|
222,373
|
|
|
177,185
|
|
||
|
|
|
|
||||
Property and equipment, net
|
12,420
|
|
|
9,597
|
|
||
Goodwill
|
293,993
|
|
|
190,911
|
|
||
Intangible assets, net
|
2,163,947
|
|
|
1,394,817
|
|
||
Other long-term assets
|
32,937
|
|
|
23,153
|
|
||
Total Assets
|
$
|
2,725,670
|
|
|
$
|
1,795,663
|
|
|
|
|
|
||||
Liabilities and Stockholders' Equity
|
|
|
|
|
|
||
Current liabilities
|
|
|
|
|
|
||
Current portion of long term debt
|
$
|
7,200
|
|
|
$
|
—
|
|
Accounts payable
|
58,538
|
|
|
48,286
|
|
||
Accrued interest payable
|
12,086
|
|
|
9,626
|
|
||
Other accrued liabilities
|
34,086
|
|
|
26,446
|
|
||
Total current liabilities
|
111,910
|
|
|
84,358
|
|
||
|
|
|
|
||||
Long-term debt
|
|
|
|
||||
Principal amount
|
1,691,400
|
|
|
937,500
|
|
||
Less unamortized discount
|
(6,289
|
)
|
|
(3,086
|
)
|
||
Long-term debt, net of unamortized discount
|
1,685,111
|
|
|
934,414
|
|
||
|
|
|
|
||||
Deferred income tax liabilities
|
334,297
|
|
|
213,204
|
|
||
Other long-term liabilities
|
313
|
|
|
327
|
|
||
Total Liabilities
|
2,131,631
|
|
|
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 - 52,426 shares at September 30, 2014 and 52,021 shares at March 31, 2014
|
524
|
|
|
520
|
|
||
Additional paid-in capital
|
421,574
|
|
|
414,387
|
|
||
Treasury stock, at cost - 254 shares at September 30, 2014 and 206 shares at March 31, 2014
|
(3,034
|
)
|
|
(1,431
|
)
|
||
Accumulated other comprehensive (loss) income, net of tax
|
(7,365
|
)
|
|
739
|
|
||
Retained earnings
|
182,340
|
|
|
149,145
|
|
||
Total Stockholders' Equity
|
594,039
|
|
|
563,360
|
|
||
Total Liabilities and Stockholders' Equity
|
$
|
2,725,670
|
|
|
$
|
1,795,663
|
|
|
Six Months Ended September 30,
|
||||||
(In thousands)
|
2014
|
|
2013
|
||||
Operating Activities
|
|
|
|
||||
Net income
|
$
|
33,195
|
|
|
$
|
53,484
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|||
Depreciation and amortization
|
6,815
|
|
|
6,562
|
|
||
Deferred income taxes
|
11,496
|
|
|
4,355
|
|
||
Amortization of deferred financing costs
|
2,398
|
|
|
1,975
|
|
||
Stock-based compensation costs
|
3,403
|
|
|
2,487
|
|
||
Amortization of debt discount
|
687
|
|
|
798
|
|
||
Loss (Gain) on sale or disposal of property and equipment
|
56
|
|
|
(3
|
)
|
||
Changes in operating assets and liabilities, net of effects from acquisitions
|
|
|
|
|
|||
Accounts receivable
|
(8,363
|
)
|
|
(5,712
|
)
|
||
Inventories
|
7,264
|
|
|
821
|
|
||
Prepaid expenses and other current assets
|
3,114
|
|
|
2,619
|
|
||
Accounts payable
|
(5,647
|
)
|
|
(1,125
|
)
|
||
Accrued liabilities
|
2,640
|
|
|
(10,663
|
)
|
||
Net cash provided by operating activities
|
57,058
|
|
|
55,598
|
|
||
|
|
|
|
||||
Investing Activities
|
|
|
|
|
|
||
Purchases of property and equipment
|
(1,380
|
)
|
|
(2,319
|
)
|
||
Proceeds from the sale of property and equipment
|
—
|
|
|
3
|
|
||
Proceeds from sale of business
|
18,500
|
|
|
—
|
|
||
Acquisition of Insight Pharmaceuticals, less cash acquired
|
(749,666
|
)
|
|
—
|
|
||
Acquisition of the Hydralyte brand
|
(77,991
|
)
|
|
—
|
|
||
Acquisition of Care Pharmaceuticals, less cash acquired
|
—
|
|
|
(55,215
|
)
|
||
Net cash used in investing activities
|
(810,537
|
)
|
|
(57,531
|
)
|
||
|
|
|
|
||||
Financing Activities
|
|
|
|
|
|
||
Term loan borrowings
|
720,000
|
|
|
—
|
|
||
Term loan repayments
|
(25,000
|
)
|
|
(7,500
|
)
|
||
Repayments under revolving credit agreement
|
(58,500
|
)
|
|
(35,500
|
)
|
||
Borrowings under revolving credit agreement
|
124,600
|
|
|
50,000
|
|
||
Payment of deferred financing costs
|
(16,072
|
)
|
|
(275
|
)
|
||
Proceeds from exercise of stock options
|
2,757
|
|
|
5,143
|
|
||
Proceeds from restricted stock exercises
|
57
|
|
|
—
|
|
||
Excess tax benefits from share-based awards
|
1,030
|
|
|
1,350
|
|
||
Fair value of shares surrendered as payment of tax withholding
|
(1,660
|
)
|
|
(278
|
)
|
||
Net cash provided by financing activities
|
747,212
|
|
|
12,940
|
|
||
|
|
|
|
||||
Effects of exchange rate changes on cash and cash equivalents
|
(316
|
)
|
|
156
|
|
||
(Decrease) Increase in cash and cash equivalents
|
(6,583
|
)
|
|
11,163
|
|
||
Cash and cash equivalents - beginning of period
|
28,331
|
|
|
15,670
|
|
||
Cash and cash equivalents - end of period
|
$
|
21,748
|
|
|
$
|
26,833
|
|
|
|
|
|
||||
Interest paid
|
$
|
27,349
|
|
|
$
|
29,516
|
|
Income taxes paid
|
$
|
4,716
|
|
|
$
|
8,468
|
|
1.
|
Business and Basis of Presentation
|
|
Years
|
Machinery
|
5
|
Computer equipment and software
|
3
|
Furniture and fixtures
|
7
|
Leasehold improvements
|
*
|
2.
|
Acquisitions
|
(In thousands)
|
September 3, 2014
|
||
|
|
||
Cash acquired
|
$
|
3,507
|
|
Accounts receivable
|
25,784
|
|
|
Inventories
|
23,559
|
|
|
Deferred income tax assets - current
|
860
|
|
|
Prepaids and other current assets
|
1,407
|
|
|
Property, plant and equipment
|
2,308
|
|
|
Goodwill
|
103,255
|
|
|
Intangible Assets
|
724,374
|
|
|
Total assets acquired
|
885,054
|
|
|
|
|
||
Accounts payable
|
16,079
|
|
|
Accrued expenses
|
8,003
|
|
|
Deferred income tax liabilities - long term
|
107,799
|
|
|
Total liabilities assumed
|
131,881
|
|
|
Total purchase price
|
$
|
753,173
|
|
(In thousands, except per share data)
|
|
Six Months Ended September 30, 2014
|
||
Revenues
|
|
$
|
393,140
|
|
Net income
|
|
$
|
37,957
|
|
|
|
|
||
Earnings per share:
|
|
|
||
Basic
|
|
$
|
0.73
|
|
|
|
|
||
Diluted
|
|
$
|
0.72
|
|
(In thousands, except per share data)
|
|
Six Months Ended September 30, 2013
|
||
Revenues
|
|
$
|
389,490
|
|
Net income
|
|
$
|
53,511
|
|
|
|
|
||
Earnings per share:
|
|
|
||
Basic
|
|
$
|
1.04
|
|
|
|
|
||
Diluted
|
|
$
|
1.03
|
|
(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)
|
September 30,
2014 |
|
March 31,
2014 |
||||
Components of Accounts Receivable
|
|
|
|
||||
Trade accounts receivable
|
$
|
107,943
|
|
|
$
|
73,632
|
|
Other receivables
|
2,176
|
|
|
1,360
|
|
||
|
110,119
|
|
|
74,992
|
|
||
Less allowances for discounts, returns and uncollectible accounts
|
(11,475
|
)
|
|
(9,942
|
)
|
||
Accounts receivable, net
|
$
|
98,644
|
|
|
$
|
65,050
|
|
4.
|
Inventories
|
(In thousands)
|
September 30,
2014 |
|
March 31,
2014 |
||||
Components of Inventories
|
|
|
|
||||
Packaging and raw materials
|
$
|
3,929
|
|
|
$
|
3,099
|
|
Work in process
|
3,456
|
|
|
—
|
|
||
Finished goods
|
75,490
|
|
|
62,487
|
|
||
Inventories
|
$
|
82,875
|
|
|
$
|
65,586
|
|
5.
|
Property and Equipment
|
(In thousands)
|
September 30,
2014 |
|
March 31,
2014 |
||||
Components of Property and Equipment
|
|
|
|
||||
Machinery
|
$
|
4,245
|
|
|
$
|
1,927
|
|
Computer equipment and software
|
10,183
|
|
|
8,923
|
|
||
Furniture and fixtures
|
2,703
|
|
|
1,858
|
|
||
Leasehold improvements
|
4,823
|
|
|
4,734
|
|
||
|
21,954
|
|
|
17,442
|
|
||
Accumulated depreciation
|
(9,534
|
)
|
|
(7,845
|
)
|
||
Property and equipment, net
|
$
|
12,420
|
|
|
$
|
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
|
103,254
|
|
|
1,224
|
|
|
—
|
|
|
104,478
|
|
||||
Effects of foreign currency exchange rates
|
—
|
|
|
(1,396
|
)
|
|
—
|
|
|
(1,396
|
)
|
||||
Balance — September 30, 2014
|
$
|
263,411
|
|
|
$
|
23,193
|
|
|
$
|
7,389
|
|
|
$
|
293,993
|
|
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
|
673,180
|
|
|
124,774
|
|
|
797,954
|
|
|||
Reductions
|
—
|
|
|
(17,674
|
)
|
|
(17,674
|
)
|
|||
Effects of foreign currency exchange rates
|
(6,000
|
)
|
|
(95
|
)
|
|
(6,095
|
)
|
|||
Balance — September 30, 2014
|
1,941,058
|
|
|
311,745
|
|
|
2,252,803
|
|
|||
|
|
|
|
|
|
|
|
|
|||
Accumulated Amortization
|
|
|
|
|
|
|
|
|
|||
Balance — March 31, 2014
|
—
|
|
|
83,801
|
|
|
83,801
|
|
|||
Additions
|
—
|
|
|
5,064
|
|
|
5,064
|
|
|||
Effects of foreign currency exchange rates
|
—
|
|
|
(9
|
)
|
|
(9
|
)
|
|||
Balance — September 30, 2014
|
—
|
|
|
88,856
|
|
|
88,856
|
|
|||
|
|
|
|
|
|
||||||
Intangible assets, net - September 30, 2014
|
$
|
1,941,058
|
|
|
$
|
222,889
|
|
|
$
|
2,163,947
|
|
|
|
|
|
|
|
||||||
Intangible Assets, net by Reportable Segment:
|
|
|
|
|
|
||||||
North American OTC Healthcare
|
$
|
1,723,498
|
|
|
$
|
196,145
|
|
|
$
|
1,919,643
|
|
International OTC Healthcare
|
97,740
|
|
|
1,449
|
|
|
99,189
|
|
|||
Household Cleaning
|
119,820
|
|
|
25,295
|
|
|
145,115
|
|
|||
Intangible assets, net - September 30, 2014
|
$
|
1,941,058
|
|
|
$
|
222,889
|
|
|
$
|
2,163,947
|
|
8.
|
Other Accrued Liabilities
|
(In thousands)
|
September 30,
2014 |
|
March 31,
2014 |
||||
|
|
|
|
||||
Accrued marketing costs
|
$
|
16,187
|
|
|
$
|
11,812
|
|
Accrued compensation costs
|
5,129
|
|
|
6,232
|
|
||
Accrued broker commissions
|
851
|
|
|
1,019
|
|
||
Income taxes payable
|
1,186
|
|
|
1,854
|
|
||
Accrued professional fees
|
2,344
|
|
|
2,002
|
|
||
Deferred rent
|
1,109
|
|
|
1,258
|
|
||
Accrued production costs
|
3,364
|
|
|
1,506
|
|
||
Other accrued liabilities
|
3,916
|
|
|
763
|
|
||
|
$
|
34,086
|
|
|
$
|
26,446
|
|
9.
|
Long-Term Debt
|
(In thousands, except percentages)
|
|
September 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. 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 B-1 Loan bearing interest at the Borrower'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.
|
|
262,500
|
|
|
287,500
|
|
||
2012 Term B-2 Loan bearing interest at the Borrower'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 September 3, 2021.
|
|
720,000
|
|
|
—
|
|
||
2012 ABL Revolver bearing interest at the Borrower's option at either a base rate plus applicable margin or LIBOR plus applicable margin. Any unpaid balance is due on January 31, 2017.
|
|
66,100
|
|
|
—
|
|
||
|
|
1,698,600
|
|
|
937,500
|
|
||
Current portion of long-term debt
|
|
7,200
|
|
|
—
|
|
||
|
|
1,691,400
|
|
|
937,500
|
|
||
Less: unamortized discount
|
|
(6,289
|
)
|
|
(3,086
|
)
|
||
Long-term debt, net of unamortized discount
|
|
$
|
1,685,111
|
|
|
$
|
934,414
|
|
10.
|
Fair Value Measurements
|
11.
|
Stockholders' Equity
|
12.
|
Accumulated Other Comprehensive (Loss) Income
|
|
September 30,
|
|
March 31,
|
||||
(In thousands)
|
2014
|
|
2014
|
||||
Components of Accumulated Other Comprehensive (Loss) Income
|
|
|
|
||||
Cumulative translation adjustment
|
$
|
(7,365
|
)
|
|
$
|
739
|
|
Total accumulated other comprehensive (loss) income, net of tax
|
$
|
(7,365
|
)
|
|
$
|
739
|
|
13.
|
Earnings Per Share
|
|
|
Three Months Ended September 30,
|
|
Six Months Ended September 30,
|
||||||||||||
(In thousands, except per share data)
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
Numerator
|
|
|
|
|
|
|
|
|
||||||||
Net income
|
|
$
|
16,463
|
|
|
$
|
32,792
|
|
|
$
|
33,195
|
|
|
$
|
53,484
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Denominator
|
|
|
|
|
|
|
|
|
|
|
||||||
Denominator for basic earnings per share — weighted average shares outstanding
|
|
52,088
|
|
|
51,463
|
|
|
52,023
|
|
|
51,343
|
|
||||
Dilutive effect of unvested restricted common stock (including restricted stock units) and options issued to employees and directors
|
|
506
|
|
|
756
|
|
|
541
|
|
|
787
|
|
||||
Denominator for diluted earnings per share
|
|
52,594
|
|
|
52,219
|
|
|
52,564
|
|
|
52,130
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
||||||
Earnings per Common Share:
|
|
|
|
|
|
|
|
|
|
|
||||||
Basic net earnings per share
|
|
$
|
0.32
|
|
|
$
|
0.64
|
|
|
$
|
0.64
|
|
|
$
|
1.04
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Diluted net earnings per share
|
|
$
|
0.31
|
|
|
$
|
0.63
|
|
|
$
|
0.63
|
|
|
$
|
1.03
|
|
14.
|
Share-Based Compensation
|
Restricted Shares
|
|
Shares
(in thousands)
|
|
Weighted-
Average
Grant-Date
Fair Value
|
|||
Six months ended September 30, 2013
|
|
|
|
|
|||
Vested and nonvested at March 31, 2013
|
|
421.3
|
|
|
$
|
11.01
|
|
Granted
|
|
120.6
|
|
|
30.19
|
|
|
Vested and issued
|
|
(54.7
|
)
|
|
8.11
|
|
|
Forfeited
|
|
(3.6
|
)
|
|
13.24
|
|
|
Vested and nonvested at September 30, 2013
|
|
483.6
|
|
|
16.11
|
|
|
Vested at September 30, 2013
|
|
83.1
|
|
|
9.63
|
|
|
|
|
|
|
|
|
|
|
Six months ended September 30, 2014:
|
|
|
|
|
|||
Vested and nonvested at March 31, 2014
|
|
437.5
|
|
|
$
|
16.76
|
|
Granted
|
|
104.4
|
|
|
33.30
|
|
|
Vested and issued
|
|
(120.7
|
)
|
|
13.34
|
|
|
Forfeited
|
|
(14.4
|
)
|
|
20.78
|
|
|
Vested and nonvested at September 30, 2014
|
|
406.8
|
|
|
21.88
|
|
|
Vested at September 30, 2014
|
|
76.6
|
|
|
11.62
|
|
|
|
Six Months Ended September 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)
|
|||||
Six months ended September 30, 2013:
|
|
|
|
|
|
|
|
|
|||||
Outstanding at March 31, 2013
|
|
1,386.4
|
|
|
$
|
10.43
|
|
|
|
|
|
||
Granted
|
|
227.7
|
|
|
29.94
|
|
|
|
|
|
|||
Exercised
|
|
(539.4
|
)
|
|
9.54
|
|
|
|
|
|
|||
Forfeited or expired
|
|
(8.0
|
)
|
|
13.24
|
|
|
|
|
|
|||
Outstanding at September 30, 2013
|
|
1,066.7
|
|
|
15.02
|
|
|
6.5
|
|
$
|
16,110
|
|
|
Exercisable at September 30, 2013
|
|
225.5
|
|
|
11.42
|
|
|
7.7
|
|
4,216
|
|
||
|
|
|
|
|
|
|
|
|
|||||
Six months ended September 30, 2014:
|
|
|
|
|
|
|
|
|
|
|
|
||
Outstanding at March 31, 2014
|
|
994.9
|
|
|
$
|
15.24
|
|
|
|
|
|
||
Granted
|
|
307.5
|
|
|
33.50
|
|
|
|
|
|
|||
Exercised
|
|
(284.4
|
)
|
|
9.70
|
|
|
|
|
|
|||
Forfeited or expired
|
|
(32.5
|
)
|
|
25.61
|
|
|
|
|
|
|||
Outstanding at September 30, 2014
|
|
985.5
|
|
|
22.19
|
|
|
8.0
|
|
$
|
10,364
|
|
|
Exercisable at September 30, 2014
|
|
416.0
|
|
|
14.31
|
|
|
6.8
|
|
7,514
|
|
15.
|
Income Taxes
|
(In thousands)
|
|
|||
Year Ending March 31,
|
Amount
|
|||
2015 (Remaining six months ending March 31, 2015)
|
$
|
549
|
|
|
2016
|
1,074
|
|
||
2017
|
1,044
|
|
||
2018
|
1,013
|
|
||
2019
|
982
|
|
||
Thereafter
|
560
|
|
||
|
$
|
5,222
|
|
17.
|
Concentrations of Risk
|
|
Three Months Ended September 30, 2014
|
||||||||||||||
(In thousands)
|
North American OTC
Healthcare |
|
International OTC
Healthcare |
|
Household
Cleaning
|
|
Consolidated
|
||||||||
Gross segment revenues
|
$
|
138,138
|
|
|
$
|
17,331
|
|
|
$
|
25,246
|
|
|
$
|
180,715
|
|
Elimination of intersegment revenues
|
(710
|
)
|
|
—
|
|
|
—
|
|
|
(710
|
)
|
||||
Third-party segment revenues
|
137,428
|
|
|
17,331
|
|
|
25,246
|
|
|
180,005
|
|
||||
Other revenues
|
150
|
|
|
23
|
|
|
1,091
|
|
|
1,264
|
|
||||
Total segment revenues
|
137,578
|
|
|
17,354
|
|
|
26,337
|
|
|
181,269
|
|
||||
Cost of sales
|
52,185
|
|
|
6,595
|
|
|
19,947
|
|
|
78,727
|
|
||||
Gross profit
|
85,393
|
|
|
10,759
|
|
|
6,390
|
|
|
102,542
|
|
||||
Advertising and promotion
|
21,442
|
|
|
3,035
|
|
|
567
|
|
|
25,044
|
|
||||
Contribution margin
|
$
|
63,951
|
|
|
$
|
7,724
|
|
|
$
|
5,823
|
|
|
77,498
|
|
|
Other operating expenses
|
|
|
|
|
|
|
|
|
30,980
|
|
|||||
Operating income
|
|
|
|
|
|
|
|
|
46,518
|
|
|||||
Other expense
|
|
|
|
|
|
|
|
|
18,193
|
|
|||||
Income before income taxes
|
|
|
|
|
|
|
28,325
|
|
|||||||
Provision for income taxes
|
|
|
|
|
|
|
|
|
11,862
|
|
|||||
Net income
|
|
|
|
|
|
|
$
|
16,463
|
|
|
Six Months Ended September 30, 2014
|
||||||||||||||
(In thousands)
|
North
American OTC Healthcare |
|
International
OTC Healthcare |
|
Household
Cleaning |
|
Consolidated
|
||||||||
Gross segment revenues
|
$
|
249,112
|
|
|
$
|
31,022
|
|
|
$
|
45,839
|
|
|
$
|
325,973
|
|
Elimination of intersegment revenues
|
(1,427
|
)
|
|
—
|
|
|
—
|
|
|
(1,427
|
)
|
||||
Third-party segment revenues
|
247,685
|
|
|
31,022
|
|
|
45,839
|
|
|
324,546
|
|
||||
Other revenues
|
327
|
|
|
58
|
|
|
2,040
|
|
|
2,425
|
|
||||
Total segment revenues
|
248,012
|
|
|
31,080
|
|
|
47,879
|
|
|
326,971
|
|
||||
Cost of sales
|
94,526
|
|
|
11,679
|
|
|
36,358
|
|
|
142,563
|
|
||||
Gross profit
|
153,486
|
|
|
19,401
|
|
|
11,521
|
|
|
184,408
|
|
||||
Advertising and promotion
|
37,794
|
|
|
5,375
|
|
|
971
|
|
|
44,140
|
|
||||
Contribution margin
|
$
|
115,692
|
|
|
$
|
14,026
|
|
|
$
|
10,550
|
|
|
140,268
|
|
|
Other operating expenses
|
|
|
|
|
|
|
|
|
50,947
|
|
|||||
Operating income
|
|
|
|
|
|
|
|
|
89,321
|
|
|||||
Other expense
|
|
|
|
|
|
|
|
|
32,846
|
|
|||||
Income before income taxes
|
|
|
|
|
|
|
56,475
|
|
|||||||
Provision for income taxes
|
|
|
|
|
|
|
|
|
23,280
|
|
|||||
Net income
|
|
|
|
|
|
|
$
|
33,195
|
|
|
Three Months Ended September 30, 2013
|
||||||||||||||
(In thousands)
|
North American OTC
Healthcare |
|
International OTC
Healthcare |
|
Household
Cleaning
|
|
Consolidated
|
||||||||
Gross segment revenues
|
$
|
132,944
|
|
|
$
|
9,008
|
|
|
$
|
24,374
|
|
|
$
|
166,326
|
|
Elimination of intersegment revenues
|
(819
|
)
|
|
—
|
|
|
—
|
|
|
(819
|
)
|
||||
Third-party segment revenues
|
132,125
|
|
|
9,008
|
|
|
24,374
|
|
|
165,507
|
|
||||
Other revenues
|
150
|
|
|
7
|
|
|
1,281
|
|
|
1,438
|
|
||||
Total segment revenues
|
132,275
|
|
|
9,015
|
|
|
25,655
|
|
|
166,945
|
|
||||
Cost of sales
|
50,987
|
|
|
4,338
|
|
|
18,398
|
|
|
73,723
|
|
||||
Gross profit
|
81,288
|
|
|
4,677
|
|
|
7,257
|
|
|
93,222
|
|
||||
Advertising and promotion
|
22,547
|
|
|
1,446
|
|
|
554
|
|
|
24,547
|
|
||||
Contribution margin
|
$
|
58,741
|
|
|
$
|
3,231
|
|
|
$
|
6,703
|
|
|
68,675
|
|
|
Other operating expenses
|
|
|
|
|
|
|
|
|
14,913
|
|
|||||
Operating income
|
|
|
|
|
|
|
|
|
53,762
|
|
|||||
Other expense
|
|
|
|
|
|
|
|
|
16,439
|
|
|||||
Income before income taxes
|
|
|
|
|
|
|
37,323
|
|
|||||||
Provision for income taxes
|
|
|
|
|
|
|
|
|
4,531
|
|
|||||
Net income
|
|
|
|
|
|
|
$
|
32,792
|
|
|
Six Months Ended September 30, 2013
|
||||||||||||||
(In thousands)
|
North American OTC
Healthcare |
|
International OTC
Healthcare |
|
Household
Cleaning |
|
Consolidated
|
||||||||
Gross segment revenues
|
$
|
251,880
|
|
|
$
|
12,422
|
|
|
$
|
43,666
|
|
|
$
|
307,968
|
|
Elimination of intersegment revenues
|
(819
|
)
|
|
—
|
|
|
—
|
|
|
(819
|
)
|
||||
Third-party segment revenues
|
251,061
|
|
|
12,422
|
|
|
43,666
|
|
|
307,149
|
|
||||
Other revenues
|
300
|
|
|
14
|
|
|
1,994
|
|
|
2,308
|
|
||||
Total segment revenues
|
251,361
|
|
|
12,436
|
|
|
45,660
|
|
|
309,457
|
|
||||
Cost of sales
|
94,533
|
|
|
5,803
|
|
|
32,875
|
|
|
133,211
|
|
||||
Gross profit
|
156,828
|
|
|
6,633
|
|
|
12,785
|
|
|
176,246
|
|
||||
Advertising and promotion
|
40,097
|
|
|
1,710
|
|
|
1,421
|
|
|
43,228
|
|
||||
Contribution margin
|
$
|
116,731
|
|
|
$
|
4,923
|
|
|
$
|
11,364
|
|
|
133,018
|
|
|
Other operating expenses
|
|
|
|
|
|
|
|
|
29,815
|
|
|||||
Operating income
|
|
|
|
|
|
|
|
|
103,203
|
|
|||||
Other expense
|
|
|
|
|
|
|
|
|
32,344
|
|
|||||
Income before income taxes
|
|
|
|
|
|
|
70,859
|
|
|||||||
Provision for income taxes
|
|
|
|
|
|
|
|
|
17,375
|
|
|||||
Net income
|
|
|
|
|
|
|
$
|
53,484
|
|
|
Three Months Ended September 30, 2014
|
||||||||||||||
(In thousands)
|
North American OTC
Healthcare |
|
International OTC
Healthcare |
|
Household
Cleaning |
|
Consolidated
|
||||||||
Analgesics
|
$
|
29,072
|
|
|
$
|
792
|
|
|
$
|
—
|
|
|
$
|
29,864
|
|
Cough & Cold
|
24,771
|
|
|
5,460
|
|
|
—
|
|
|
30,231
|
|
||||
Women's Health
|
9,119
|
|
|
658
|
|
|
—
|
|
|
9,777
|
|
||||
Gastrointestinal
|
20,896
|
|
|
5,598
|
|
|
—
|
|
|
26,494
|
|
||||
Eye & Ear Care
|
21,405
|
|
|
4,028
|
|
|
—
|
|
|
25,433
|
|
||||
Dermatologicals
|
17,459
|
|
|
687
|
|
|
—
|
|
|
18,146
|
|
||||
Oral Care
|
12,934
|
|
|
127
|
|
|
—
|
|
|
13,061
|
|
||||
Other OTC
|
1,922
|
|
|
4
|
|
|
—
|
|
|
1,926
|
|
||||
Household Cleaning
|
—
|
|
|
—
|
|
|
26,337
|
|
|
26,337
|
|
||||
Total segment revenues
|
$
|
137,578
|
|
|
$
|
17,354
|
|
|
$
|
26,337
|
|
|
$
|
181,269
|
|
|
Six Months Ended September 30, 2014
|
||||||||||||||
(In thousands)
|
North American OTC
Healthcare |
|
International OTC
Healthcare |
|
Household
Cleaning |
|
Consolidated
|
||||||||
Analgesics
|
$
|
54,103
|
|
|
$
|
1,457
|
|
|
$
|
—
|
|
|
$
|
55,560
|
|
Cough & Cold
|
44,814
|
|
|
10,259
|
|
|
—
|
|
|
55,073
|
|
||||
Women's Health
|
9,487
|
|
|
1,176
|
|
|
|
|
10,663
|
|
|||||
Gastrointestinal
|
41,534
|
|
|
8,096
|
|
|
—
|
|
|
49,630
|
|
||||
Eye & Ear Care
|
42,130
|
|
|
8,670
|
|
|
—
|
|
|
50,800
|
|
||||
Dermatologicals
|
29,720
|
|
|
1,229
|
|
|
—
|
|
|
30,949
|
|
||||
Oral Care
|
23,121
|
|
|
189
|
|
|
—
|
|
|
23,310
|
|
||||
Other OTC
|
3,103
|
|
|
4
|
|
|
—
|
|
|
3,107
|
|
||||
Household Cleaning
|
—
|
|
|
—
|
|
|
47,879
|
|
|
47,879
|
|
||||
Total segment revenues
|
$
|
248,012
|
|
|
$
|
31,080
|
|
|
$
|
47,879
|
|
|
$
|
326,971
|
|
|
Three Months Ended September 30, 2013
|
||||||||||||||
(In thousands)
|
North American OTC
Healthcare |
|
International OTC
Healthcare |
|
Household
Cleaning |
|
Consolidated
|
||||||||
Analgesics
|
$
|
29,343
|
|
|
$
|
698
|
|
|
$
|
—
|
|
|
$
|
30,041
|
|
Cough & Cold
|
28,695
|
|
|
5,023
|
|
|
—
|
|
|
33,718
|
|
||||
Women's Health
|
501
|
|
|
633
|
|
|
—
|
|
|
1,134
|
|
||||
Gastrointestinal
|
21,695
|
|
|
301
|
|
|
—
|
|
|
21,996
|
|
||||
Eye & Ear Care
|
19,378
|
|
|
1,625
|
|
|
—
|
|
|
21,003
|
|
||||
Dermatologicals
|
17,716
|
|
|
605
|
|
|
—
|
|
|
18,321
|
|
||||
Oral Care
|
13,028
|
|
|
130
|
|
|
—
|
|
|
13,158
|
|
||||
Other OTC
|
1,919
|
|
|
—
|
|
|
—
|
|
|
1,919
|
|
||||
Household Cleaning
|
—
|
|
|
—
|
|
|
25,655
|
|
|
25,655
|
|
||||
Total segment revenues
|
$
|
132,275
|
|
|
$
|
9,015
|
|
|
$
|
25,655
|
|
|
$
|
166,945
|
|
|
Six Months Ended September 30, 2013
|
||||||||||||||
(In thousands)
|
North American OTC
Healthcare |
|
International OTC
Healthcare |
|
Household
Cleaning |
|
Consolidated
|
||||||||
Analgesics
|
$
|
57,479
|
|
|
$
|
727
|
|
|
$
|
—
|
|
|
$
|
58,206
|
|
Cough & Cold
|
49,193
|
|
|
6,006
|
|
|
—
|
|
|
55,199
|
|
||||
Women's Health
|
988
|
|
|
633
|
|
|
—
|
|
|
1,621
|
|
||||
Gastrointestinal
|
43,453
|
|
|
312
|
|
|
—
|
|
|
43,765
|
|
||||
Eye & Ear Care
|
39,710
|
|
|
3,885
|
|
|
—
|
|
|
43,595
|
|
||||
Dermatologicals
|
32,347
|
|
|
696
|
|
|
—
|
|
|
33,043
|
|
||||
Oral Care
|
24,114
|
|
|
177
|
|
|
—
|
|
|
24,291
|
|
||||
Other OTC
|
4,077
|
|
|
—
|
|
|
—
|
|
|
4,077
|
|
||||
Household Cleaning
|
—
|
|
|
—
|
|
|
45,660
|
|
|
45,660
|
|
||||
Total segment revenues
|
$
|
251,361
|
|
|
$
|
12,436
|
|
|
$
|
45,660
|
|
|
$
|
309,457
|
|
(In thousands)
|
North American OTC
Healthcare |
|
International OTC
Healthcare |
|
Household
Cleaning
|
|
Consolidated
|
||||||||
Goodwill
|
$
|
263,411
|
|
|
$
|
23,193
|
|
|
$
|
7,389
|
|
|
$
|
293,993
|
|
|
|
|
|
|
|
|
|
||||||||
Intangible assets
|
|
|
|
|
|
|
|
|
|||||||
Indefinite-lived
|
1,723,498
|
|
|
97,740
|
|
|
119,820
|
|
|
1,941,058
|
|
||||
Finite-lived
|
196,145
|
|
|
1,449
|
|
|
25,295
|
|
|
222,889
|
|
||||
Intangible assets, net
|
1,919,643
|
|
|
99,189
|
|
|
145,115
|
|
|
2,163,947
|
|
||||
Total
|
$
|
2,183,054
|
|
|
$
|
122,382
|
|
|
$
|
152,504
|
|
|
$
|
2,457,940
|
|
(In thousands)
|
|
Prestige
Brands
Holdings,
Inc.
|
|
Prestige
Brands,
Inc.,
the issuer
|
|
Combined
Subsidiary
Guarantors
|
|
Combined
Non-
Guarantor
Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||||
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net sales
|
|
$
|
—
|
|
|
$
|
27,167
|
|
|
$
|
138,336
|
|
|
$
|
15,212
|
|
|
$
|
(710
|
)
|
|
$
|
180,005
|
|
Other revenues
|
|
—
|
|
|
95
|
|
|
1,241
|
|
|
436
|
|
|
(508
|
)
|
|
1,264
|
|
||||||
Total revenues
|
|
—
|
|
|
27,262
|
|
|
139,577
|
|
|
15,648
|
|
|
(1,218
|
)
|
|
181,269
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Cost of Sales
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Cost of sales (exclusive of depreciation shown below)
|
|
—
|
|
|
10,426
|
|
|
64,812
|
|
|
5,767
|
|
|
(2,278
|
)
|
|
78,727
|
|
||||||
Gross profit
|
|
—
|
|
|
16,836
|
|
|
74,765
|
|
|
9,881
|
|
|
1,060
|
|
|
102,542
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Operating Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Advertising and promotion
|
|
—
|
|
|
2,699
|
|
|
19,311
|
|
|
3,034
|
|
|
—
|
|
|
25,044
|
|
||||||
General and administrative
|
|
1,109
|
|
|
3,441
|
|
|
20,329
|
|
|
2,249
|
|
|
—
|
|
|
27,128
|
|
||||||
Depreciation and amortization
|
|
870
|
|
|
145
|
|
|
2,729
|
|
|
108
|
|
|
—
|
|
|
3,852
|
|
||||||
Total operating expenses
|
|
1,979
|
|
|
6,285
|
|
|
42,369
|
|
|
5,391
|
|
|
—
|
|
|
56,024
|
|
||||||
Operating income (loss)
|
|
(1,979
|
)
|
|
10,551
|
|
|
32,396
|
|
|
4,490
|
|
|
1,060
|
|
|
46,518
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Other (income) expense
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Interest income
|
|
(12,245
|
)
|
|
(16,719
|
)
|
|
(1,760
|
)
|
|
(11
|
)
|
|
30,720
|
|
|
(15
|
)
|
||||||
Interest expense
|
|
8,629
|
|
|
18,208
|
|
|
20,333
|
|
|
1,758
|
|
|
(30,720
|
)
|
|
18,208
|
|
||||||
Equity in (income) loss of subsidiaries
|
|
(17,577
|
)
|
|
(9,825
|
)
|
|
(1,870
|
)
|
|
—
|
|
|
29,272
|
|
|
—
|
|
||||||
Total other (income) expense
|
|
(21,193
|
)
|
|
(8,336
|
)
|
|
16,703
|
|
|
1,747
|
|
|
29,272
|
|
|
18,193
|
|
||||||
Income before income taxes
|
|
19,214
|
|
|
18,887
|
|
|
15,693
|
|
|
2,743
|
|
|
(28,212
|
)
|
|
28,325
|
|
||||||
Provision for income taxes
|
|
2,751
|
|
|
3,262
|
|
|
4,976
|
|
|
873
|
|
|
—
|
|
|
11,862
|
|
||||||
Net income (loss)
|
|
$
|
16,463
|
|
|
$
|
15,625
|
|
|
$
|
10,717
|
|
|
$
|
1,870
|
|
|
$
|
(28,212
|
)
|
|
$
|
16,463
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Comprehensive income, net of tax:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Currency translation adjustments
|
|
(10,830
|
)
|
|
(10,830
|
)
|
|
(10,830
|
)
|
|
(10,830
|
)
|
|
32,490
|
|
|
(10,830
|
)
|
||||||
Total other comprehensive (loss) income
|
|
(10,830
|
)
|
|
(10,830
|
)
|
|
(10,830
|
)
|
|
(10,830
|
)
|
|
32,490
|
|
|
(10,830
|
)
|
||||||
Comprehensive income (loss)
|
|
$
|
5,633
|
|
|
$
|
4,795
|
|
|
$
|
(113
|
)
|
|
$
|
(8,960
|
)
|
|
$
|
4,278
|
|
|
$
|
5,633
|
|
(In thousands)
|
|
Prestige
Brands
Holdings,
Inc.
|
|
Prestige
Brands, Inc., the issuer |
|
Combined
Subsidiary
Guarantors
|
|
Combined
Non-
Guarantor
Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||||
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net sales
|
|
$
|
—
|
|
|
$
|
52,577
|
|
|
$
|
247,234
|
|
|
$
|
26,163
|
|
|
$
|
(1,428
|
)
|
|
$
|
324,546
|
|
Other revenues
|
|
—
|
|
|
225
|
|
|
2,340
|
|
|
838
|
|
|
(978
|
)
|
|
2,425
|
|
||||||
Total revenues
|
|
—
|
|
|
52,802
|
|
|
249,574
|
|
|
27,001
|
|
|
(2,406
|
)
|
|
326,971
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Cost of Sales
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Cost of sales (exclusive of depreciation shown below)
|
|
—
|
|
|
19,874
|
|
|
115,327
|
|
|
9,790
|
|
|
(2,428
|
)
|
|
142,563
|
|
||||||
Gross profit
|
|
—
|
|
|
32,928
|
|
|
134,247
|
|
|
17,211
|
|
|
22
|
|
|
184,408
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Operating Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Advertising and promotion
|
|
—
|
|
|
5,388
|
|
|
33,377
|
|
|
5,375
|
|
|
—
|
|
|
44,140
|
|
||||||
General and administrative
|
|
2,254
|
|
|
5,914
|
|
|
29,319
|
|
|
6,647
|
|
|
—
|
|
|
44,134
|
|
||||||
Depreciation and amortization
|
|
1,512
|
|
|
290
|
|
|
4,818
|
|
|
193
|
|
|
—
|
|
|
6,813
|
|
||||||
Total operating expenses
|
|
3,766
|
|
|
11,592
|
|
|
67,514
|
|
|
12,215
|
|
|
—
|
|
|
95,087
|
|
||||||
Operating income (loss)
|
|
(3,766
|
)
|
|
21,336
|
|
|
66,733
|
|
|
4,996
|
|
|
22
|
|
|
89,321
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Other (income) expense
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Interest income
|
|
(24,378
|
)
|
|
(30,944
|
)
|
|
(2,522
|
)
|
|
(40
|
)
|
|
57,837
|
|
|
(47
|
)
|
||||||
Interest expense
|
|
17,177
|
|
|
32,893
|
|
|
38,138
|
|
|
2,522
|
|
|
(57,837
|
)
|
|
32,893
|
|
||||||
Equity in (income) loss of subsidiaries
|
|
(33,256
|
)
|
|
(20,723
|
)
|
|
(911
|
)
|
|
—
|
|
|
54,890
|
|
|
—
|
|
||||||
Total other (income) expense
|
|
(40,457
|
)
|
|
(18,774
|
)
|
|
34,705
|
|
|
2,482
|
|
|
54,890
|
|
|
32,846
|
|
||||||
Income before income taxes
|
|
36,691
|
|
|
40,110
|
|
|
32,028
|
|
|
2,514
|
|
|
(54,868
|
)
|
|
56,475
|
|
||||||
Provision (benefit) for income taxes
|
|
3,496
|
|
|
6,979
|
|
|
11,202
|
|
|
1,603
|
|
|
—
|
|
|
23,280
|
|
||||||
Net income (loss)
|
|
$
|
33,195
|
|
|
$
|
33,131
|
|
|
$
|
20,826
|
|
|
$
|
911
|
|
|
$
|
(54,868
|
)
|
|
$
|
33,195
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Comprehensive income, net of tax:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Currency translation adjustments
|
|
(8,104
|
)
|
|
(8,104
|
)
|
|
(8,104
|
)
|
|
(8,104
|
)
|
|
24,312
|
|
|
(8,104
|
)
|
||||||
Total other comprehensive (loss) income
|
|
(8,104
|
)
|
|
(8,104
|
)
|
|
(8,104
|
)
|
|
(8,104
|
)
|
|
24,312
|
|
|
(8,104
|
)
|
||||||
Comprehensive income (loss)
|
|
$
|
25,091
|
|
|
$
|
25,027
|
|
|
$
|
12,722
|
|
|
$
|
(7,193
|
)
|
|
$
|
(30,556
|
)
|
|
$
|
25,091
|
|
(In thousands)
|
|
Prestige
Brands
Holdings,
Inc.
|
|
Prestige
Brands, Inc., the issuer |
|
Combined
Subsidiary
Guarantors
|
|
Combined
Non-
Guarantor
Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||||
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net sales
|
|
$
|
—
|
|
|
$
|
25,237
|
|
|
$
|
132,821
|
|
|
$
|
7,449
|
|
|
$
|
—
|
|
|
$
|
165,507
|
|
Other revenues
|
|
—
|
|
|
67
|
|
|
1,431
|
|
|
668
|
|
|
(728
|
)
|
|
1,438
|
|
||||||
Total revenues
|
|
—
|
|
|
25,304
|
|
|
134,252
|
|
|
8,117
|
|
|
(728
|
)
|
|
166,945
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Cost of Sales
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Cost of sales (exclusive of depreciation shown below)
|
|
—
|
|
|
9,338
|
|
|
61,513
|
|
|
3,600
|
|
|
(728
|
)
|
|
73,723
|
|
||||||
Gross profit
|
|
—
|
|
|
15,966
|
|
|
72,739
|
|
|
4,517
|
|
|
—
|
|
|
93,222
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Operating Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Advertising and promotion
|
|
—
|
|
|
3,594
|
|
|
19,556
|
|
|
1,397
|
|
|
—
|
|
|
24,547
|
|
||||||
General and administrative
|
|
891
|
|
|
1,481
|
|
|
8,358
|
|
|
889
|
|
|
—
|
|
|
11,619
|
|
||||||
Depreciation and amortization
|
|
517
|
|
|
143
|
|
|
2,589
|
|
|
45
|
|
|
—
|
|
|
3,294
|
|
||||||
Total operating expenses
|
|
1,408
|
|
|
5,218
|
|
|
30,503
|
|
|
2,331
|
|
|
—
|
|
|
39,460
|
|
||||||
Operating income (loss)
|
|
(1,408
|
)
|
|
10,748
|
|
|
42,236
|
|
|
2,186
|
|
|
—
|
|
|
53,762
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Other (income) expense
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Interest income
|
|
(12,778
|
)
|
|
(14,005
|
)
|
|
(710
|
)
|
|
(22
|
)
|
|
27,490
|
|
|
(25
|
)
|
||||||
Interest expense
|
|
8,687
|
|
|
16,464
|
|
|
18,093
|
|
|
710
|
|
|
(27,490
|
)
|
|
16,464
|
|
||||||
Equity in (income) loss of subsidiaries
|
|
(30,344
|
)
|
|
(20,599
|
)
|
|
(1,189
|
)
|
|
—
|
|
|
52,132
|
|
|
—
|
|
||||||
Total other (income) expense
|
|
(34,435
|
)
|
|
(18,140
|
)
|
|
16,194
|
|
|
688
|
|
|
52,132
|
|
|
16,439
|
|
||||||
Income (loss) before income taxes
|
|
33,027
|
|
|
28,888
|
|
|
26,042
|
|
|
1,498
|
|
|
(52,132
|
)
|
|
37,323
|
|
||||||
Provision for income taxes
|
|
235
|
|
|
1,064
|
|
|
2,922
|
|
|
310
|
|
|
—
|
|
|
4,531
|
|
||||||
Net income (loss)
|
|
$
|
32,792
|
|
|
$
|
27,824
|
|
|
$
|
23,120
|
|
|
$
|
1,188
|
|
|
$
|
(52,132
|
)
|
|
$
|
32,792
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Comprehensive income, net of tax:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Currency translation adjustments
|
|
1,122
|
|
|
1,122
|
|
|
1,122
|
|
|
1,122
|
|
|
(3,366
|
)
|
|
1,122
|
|
||||||
Total other comprehensive income (loss)
|
|
1,122
|
|
|
1,122
|
|
|
1,122
|
|
|
1,122
|
|
|
(3,366
|
)
|
|
1,122
|
|
||||||
Comprehensive income (loss)
|
|
$
|
33,914
|
|
|
$
|
28,946
|
|
|
$
|
24,242
|
|
|
$
|
2,310
|
|
|
$
|
(55,498
|
)
|
|
$
|
33,914
|
|
(In thousands)
|
|
Prestige
Brands
Holdings,
Inc.
|
|
Prestige
Brands, Inc., the issuer |
|
Combined
Subsidiary
Guarantors
|
|
Combined
Non-
Guarantor
Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||||
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net sales
|
|
$
|
—
|
|
|
$
|
49,386
|
|
|
$
|
249,091
|
|
|
$
|
8,672
|
|
|
$
|
—
|
|
|
$
|
307,149
|
|
Other revenues
|
|
—
|
|
|
135
|
|
|
2,294
|
|
|
1,102
|
|
|
(1,223
|
)
|
|
2,308
|
|
||||||
Total revenues
|
|
—
|
|
|
49,521
|
|
|
251,385
|
|
|
9,774
|
|
|
(1,223
|
)
|
|
309,457
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Cost of Sales
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Cost of sales (exclusive of depreciation shown below)
|
|
—
|
|
|
18,796
|
|
|
111,502
|
|
|
4,136
|
|
|
(1,223
|
)
|
|
133,211
|
|
||||||
Gross profit
|
|
—
|
|
|
30,725
|
|
|
139,883
|
|
|
5,638
|
|
|
—
|
|
|
176,246
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Operating Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Advertising and promotion
|
|
—
|
|
|
6,924
|
|
|
34,700
|
|
|
1,604
|
|
|
—
|
|
|
43,228
|
|
||||||
General and administrative
|
|
2,390
|
|
|
3,124
|
|
|
16,815
|
|
|
924
|
|
|
—
|
|
|
23,253
|
|
||||||
Depreciation and amortization
|
|
1,034
|
|
|
285
|
|
|
5,184
|
|
|
59
|
|
|
—
|
|
|
6,562
|
|
||||||
Total operating expenses
|
|
3,424
|
|
|
10,333
|
|
|
56,699
|
|
|
2,587
|
|
|
—
|
|
|
73,043
|
|
||||||
Operating income (loss)
|
|
(3,424
|
)
|
|
20,392
|
|
|
83,184
|
|
|
3,051
|
|
|
—
|
|
|
103,203
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Other (income) expense
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Interest income
|
|
(24,991
|
)
|
|
(28,328
|
)
|
|
(710
|
)
|
|
(24
|
)
|
|
54,025
|
|
|
(28
|
)
|
||||||
Interest expense
|
|
17,294
|
|
|
32,372
|
|
|
36,021
|
|
|
710
|
|
|
(54,025
|
)
|
|
32,372
|
|
||||||
Equity in (income) loss of subsidiaries
|
|
(50,199
|
)
|
|
(35,152
|
)
|
|
(1,868
|
)
|
|
—
|
|
|
87,219
|
|
|
—
|
|
||||||
Total other (income) expense
|
|
(57,896
|
)
|
|
(31,108
|
)
|
|
33,443
|
|
|
686
|
|
|
87,219
|
|
|
32,344
|
|
||||||
Income (loss) before income taxes
|
|
54,472
|
|
|
51,500
|
|
|
49,741
|
|
|
2,365
|
|
|
(87,219
|
)
|
|
70,859
|
|
||||||
Provision for income taxes
|
|
988
|
|
|
4,151
|
|
|
11,738
|
|
|
498
|
|
|
—
|
|
|
17,375
|
|
||||||
Net income (loss)
|
|
$
|
53,484
|
|
|
$
|
47,349
|
|
|
$
|
38,003
|
|
|
$
|
1,867
|
|
|
$
|
(87,219
|
)
|
|
$
|
53,484
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Comprehensive income, net of tax:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Currency translation adjustments
|
|
1,123
|
|
|
1,123
|
|
|
1,123
|
|
|
1,123
|
|
|
(3,369
|
)
|
|
1,123
|
|
||||||
Total other comprehensive income (loss)
|
|
1,123
|
|
|
1,123
|
|
|
1,123
|
|
|
1,123
|
|
|
(3,369
|
)
|
|
1,123
|
|
||||||
Comprehensive income (loss)
|
|
$
|
54,607
|
|
|
$
|
48,472
|
|
|
$
|
39,126
|
|
|
$
|
2,990
|
|
|
$
|
(90,588
|
)
|
|
$
|
54,607
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
(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
|
|
$
|
10,465
|
|
|
$
|
—
|
|
|
$
|
5,034
|
|
|
$
|
6,249
|
|
|
$
|
—
|
|
|
$
|
21,748
|
|
Accounts receivable, net
|
|
7
|
|
|
14,352
|
|
|
76,165
|
|
|
8,120
|
|
|
—
|
|
|
98,644
|
|
||||||
Inventories
|
|
—
|
|
|
9,666
|
|
|
67,420
|
|
|
6,777
|
|
|
(988
|
)
|
|
82,875
|
|
||||||
Deferred income tax assets
|
|
1,139
|
|
|
823
|
|
|
6,743
|
|
|
466
|
|
|
—
|
|
|
9,171
|
|
||||||
Prepaid expenses and other current assets
|
|
2,841
|
|
|
354
|
|
|
6,023
|
|
|
717
|
|
|
—
|
|
|
9,935
|
|
||||||
Total current assets
|
|
14,452
|
|
|
25,195
|
|
|
161,385
|
|
|
22,329
|
|
|
(988
|
)
|
|
222,373
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Property and equipment, net
|
|
8,580
|
|
|
90
|
|
|
2,297
|
|
|
1,453
|
|
|
—
|
|
|
12,420
|
|
||||||
Goodwill
|
|
—
|
|
|
66,007
|
|
|
204,794
|
|
|
23,192
|
|
|
—
|
|
|
293,993
|
|
||||||
Intangible assets, net
|
|
—
|
|
|
192,593
|
|
|
1,871,933
|
|
|
99,421
|
|
|
—
|
|
|
2,163,947
|
|
||||||
Other long-term assets
|
|
—
|
|
|
32,937
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
32,937
|
|
||||||
Intercompany receivables
|
|
1,203,499
|
|
|
2,688,676
|
|
|
599,886
|
|
|
10,045
|
|
|
(4,502,106
|
)
|
|
—
|
|
||||||
Investment in subsidiary
|
|
1,519,129
|
|
|
1,213,732
|
|
|
79,877
|
|
|
—
|
|
|
(2,812,738
|
)
|
|
—
|
|
||||||
Total Assets
|
|
$
|
2,745,660
|
|
|
$
|
4,219,230
|
|
|
$
|
2,920,172
|
|
|
$
|
156,440
|
|
|
$
|
(7,315,832
|
)
|
|
$
|
2,725,670
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Liabilities and Stockholders' Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Current liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Current portion of long term debt
|
|
—
|
|
|
7,200
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7,200
|
|
||||||
Accounts payable
|
|
2,084
|
|
|
9,508
|
|
|
42,634
|
|
|
4,312
|
|
|
—
|
|
|
58,538
|
|
||||||
Accrued interest payable
|
|
—
|
|
|
12,086
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
12,086
|
|
||||||
Other accrued liabilities
|
|
6,407
|
|
|
2,970
|
|
|
20,746
|
|
|
3,963
|
|
|
—
|
|
|
34,086
|
|
||||||
Total current liabilities
|
|
8,491
|
|
|
31,764
|
|
|
63,380
|
|
|
8,275
|
|
|
—
|
|
|
111,910
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Long-term debt
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Principal amount
|
|
—
|
|
|
1,691,400
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,691,400
|
|
||||||
Less unamortized discount
|
|
—
|
|
|
(6,289
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(6,289
|
)
|
||||||
Long-term debt, net of unamortized discount
|
|
—
|
|
|
1,685,111
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,685,111
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Deferred income tax liabilities
|
|
—
|
|
|
58,076
|
|
|
276,180
|
|
|
41
|
|
|
—
|
|
|
334,297
|
|
||||||
Other long-term liabilities
|
|
—
|
|
|
—
|
|
|
—
|
|
|
313
|
|
|
—
|
|
|
313
|
|
||||||
Intercompany payables
|
|
2,143,130
|
|
|
995,186
|
|
|
1,295,207
|
|
|
68,583
|
|
|
(4,502,106
|
)
|
|
—
|
|
||||||
Total Liabilities
|
|
2,151,621
|
|
|
2,770,137
|
|
|
1,634,767
|
|
|
77,212
|
|
|
(4,502,106
|
)
|
|
2,131,631
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Stockholders' Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Preferred share rights
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Common stock
|
|
524
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
524
|
|
||||||
Additional paid-in capital
|
|
421,574
|
|
|
1,280,948
|
|
|
1,131,578
|
|
|
74,031
|
|
|
(2,486,557
|
)
|
|
421,574
|
|
||||||
Treasury stock, at cost - 254 shares
|
|
(3,034
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,034
|
)
|
||||||
Accumulated other comprehensive (loss) income, net of tax
|
|
(7,365
|
)
|
|
(7,365
|
)
|
|
(7,365
|
)
|
|
(7,365
|
)
|
|
22,095
|
|
|
(7,365
|
)
|
||||||
Retained earnings (accumulated deficit)
|
|
182,340
|
|
|
175,510
|
|
|
161,192
|
|
|
12,562
|
|
|
(349,264
|
)
|
|
182,340
|
|
||||||
Total Stockholders' Equity
|
|
594,039
|
|
|
1,449,093
|
|
|
1,285,405
|
|
|
79,228
|
|
|
(2,813,726
|
)
|
|
594,039
|
|
||||||
Total Liabilities and Stockholders' Equity
|
|
$
|
2,745,660
|
|
|
$
|
4,219,230
|
|
|
$
|
2,920,172
|
|
|
$
|
156,440
|
|
|
$
|
(7,315,832
|
)
|
|
$
|
2,725,670
|
|
(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)
|
|
$
|
33,195
|
|
|
$
|
33,131
|
|
|
$
|
20,826
|
|
|
$
|
911
|
|
|
$
|
(54,868
|
)
|
|
$
|
33,195
|
|
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Depreciation and amortization
|
|
1,512
|
|
|
290
|
|
|
4,818
|
|
|
195
|
|
|
—
|
|
|
6,815
|
|
||||||
Deferred income taxes
|
|
(879
|
)
|
|
1,351
|
|
|
11,084
|
|
|
(60
|
)
|
|
—
|
|
|
11,496
|
|
||||||
Amortization of deferred financing costs
|
|
|
|
|
2,398
|
|
|
|
|
|
|
|
|
|
|
|
2,398
|
|
||||||
Stock-based compensation costs
|
|
3,403
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,403
|
|
||||||
Amortization of debt discount
|
|
|
|
687
|
|
|
|
|
|
|
|
|
687
|
|
||||||||||
Loss on sale of assets
|
|
|
|
|
|
|
|
—
|
|
|
56
|
|
|
|
|
|
56
|
|
||||||
Equity in income of subsidiaries
|
|
(33,256
|
)
|
|
(20,723
|
)
|
|
(911
|
)
|
|
—
|
|
|
54,890
|
|
|
—
|
|
||||||
Changes in operating assets and liabilities, net of effects from acquisitions:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Accounts receivable
|
|
466
|
|
|
(107
|
)
|
|
(4,496
|
)
|
|
(4,226
|
)
|
|
—
|
|
|
(8,363
|
)
|
||||||
Inventories
|
|
—
|
|
|
4,691
|
|
|
1,857
|
|
|
738
|
|
|
(22
|
)
|
|
7,264
|
|
||||||
Prepaid expenses and other current assets
|
|
5,163
|
|
|
(241
|
)
|
|
(1,718
|
)
|
|
(90
|
)
|
|
—
|
|
|
3,114
|
|
||||||
Accounts payable
|
|
(2,332
|
)
|
|
1,850
|
|
|
(6,997
|
)
|
|
1,832
|
|
|
—
|
|
|
(5,647
|
)
|
||||||
Accrued liabilities
|
|
(1,321
|
)
|
|
3,313
|
|
|
(701
|
)
|
|
1,349
|
|
|
—
|
|
|
2,640
|
|
||||||
Net cash provided by operating activities
|
|
5,951
|
|
|
26,640
|
|
|
23,762
|
|
|
705
|
|
|
—
|
|
|
57,058
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Investing Activities
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Purchases of property and equipment
|
|
(1,127
|
)
|
|
|
|
|
(87
|
)
|
|
(166
|
)
|
|
|
|
|
(1,380
|
)
|
||||||
Proceeds from the sale of business
|
|
—
|
|
|
—
|
|
|
18,500
|
|
|
—
|
|
|
—
|
|
|
18,500
|
|
||||||
Acquisition of Insight Pharmaceuticals, less cash acquired
|
|
—
|
|
|
—
|
|
|
(749,666
|
)
|
|
|
|
—
|
|
|
(749,666
|
)
|
|||||||
Acquisition of Hydralyte
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(77,991
|
)
|
|
—
|
|
|
(77,991
|
)
|
||||||
Intercompany activity, net
|
|
|
|
|
(809,157
|
)
|
|
731,166
|
|
|
77,991
|
|
|
|
|
—
|
|
|||||||
Net cash used in investing activities
|
|
(1,127
|
)
|
|
(809,157
|
)
|
|
(87
|
)
|
|
(166
|
)
|
|
—
|
|
|
(810,537
|
)
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Financing Activities
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Term loan borrowings
|
|
|
|
720,000
|
|
|
|
|
|
|
|
|
720,000
|
|
||||||||||
Term loan repayments
|
|
—
|
|
|
(25,000
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(25,000
|
)
|
||||||
Repayments under revolving credit agreement
|
|
—
|
|
|
(58,500
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(58,500
|
)
|
||||||
Borrowings under revolving credit agreement
|
|
—
|
|
|
124,600
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
124,600
|
|
||||||
Payment of deferred financing costs
|
|
—
|
|
|
(16,072
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(16,072
|
)
|
||||||
Proceeds from exercise of stock options
|
|
2,757
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,757
|
|
||||||
Proceeds from exercise of restricted stock exercises
|
|
57
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
57
|
|
||||||
Excess tax benefits from share-based awards
|
|
1,030
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,030
|
|
||||||
Fair value of shares surrendered as payment of tax withholding
|
|
(1,660
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,660
|
)
|
||||||
Intercompany activity, net
|
|
(21,187
|
)
|
|
37,489
|
|
|
(18,641
|
)
|
|
2,339
|
|
|
—
|
|
|
—
|
|
||||||
Net cash provided by (used in) financing activities
|
|
(19,003
|
)
|
|
782,517
|
|
|
(18,641
|
)
|
|
2,339
|
|
|
—
|
|
|
747,212
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Effect of exchange rate changes on cash and cash equivalents
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(316
|
)
|
|
—
|
|
|
(316
|
)
|
||||||
(Decrease) increase in cash and cash equivalents
|
|
(14,179
|
)
|
|
—
|
|
|
5,034
|
|
|
2,562
|
|
|
—
|
|
|
(6,583
|
)
|
||||||
Cash and cash equivalents - beginning of period
|
|
24,644
|
|
|
—
|
|
|
—
|
|
|
3,687
|
|
|
—
|
|
|
28,331
|
|
||||||
Cash and cash equivalents - end of period
|
|
$
|
10,465
|
|
|
$
|
—
|
|
|
$
|
5,034
|
|
|
$
|
6,249
|
|
|
$
|
—
|
|
|
$
|
21,748
|
|
(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)
|
|
$
|
53,484
|
|
|
$
|
47,349
|
|
|
$
|
38,003
|
|
|
$
|
1,867
|
|
|
$
|
(87,219
|
)
|
|
$
|
53,484
|
|
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Depreciation and amortization
|
|
1,034
|
|
|
285
|
|
|
5,184
|
|
|
59
|
|
|
—
|
|
|
6,562
|
|
||||||
Deferred income taxes
|
|
(14
|
)
|
|
(642
|
)
|
|
5,011
|
|
|
—
|
|
|
—
|
|
|
4,355
|
|
||||||
Amortization of deferred financing costs
|
|
—
|
|
|
1,975
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,975
|
|
||||||
Stock-based compensation costs
|
|
2,487
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,487
|
|
||||||
Amortization of debt discount
|
|
—
|
|
|
798
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
798
|
|
||||||
Gain on sale of assets
|
|
—
|
|
|
—
|
|
|
(3
|
)
|
|
—
|
|
|
—
|
|
|
(3
|
)
|
||||||
Equity in income of subsidiaries
|
|
(50,199
|
)
|
|
(35,152
|
)
|
|
(1,868
|
)
|
|
—
|
|
|
87,219
|
|
|
—
|
|
||||||
Changes in operating assets and liabilities, net of effects from acquisitions:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Accounts receivable
|
|
(112
|
)
|
|
996
|
|
|
(5,323
|
)
|
|
(1,273
|
)
|
|
—
|
|
|
(5,712
|
)
|
||||||
Inventories
|
|
—
|
|
|
(1,975
|
)
|
|
3,073
|
|
|
(277
|
)
|
|
—
|
|
|
821
|
|
||||||
Prepaid expenses and other current assets
|
|
2,656
|
|
|
(147
|
)
|
|
(787
|
)
|
|
493
|
|
|
404
|
|
|
2,619
|
|
||||||
Accounts payable
|
|
(517
|
)
|
|
(1,296
|
)
|
|
(1,473
|
)
|
|
2,161
|
|
|
—
|
|
|
(1,125
|
)
|
||||||
Accrued liabilities
|
|
(6,218
|
)
|
|
177
|
|
|
(3,011
|
)
|
|
(1,207
|
)
|
|
(404
|
)
|
|
(10,663
|
)
|
||||||
Net cash provided by operating activities
|
|
2,601
|
|
|
12,368
|
|
|
38,806
|
|
|
1,823
|
|
|
—
|
|
|
55,598
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Investing Activities
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Purchases of property and equipment
|
|
(2,216
|
)
|
|
—
|
|
|
—
|
|
|
(103
|
)
|
|
—
|
|
|
(2,319
|
)
|
||||||
Proceeds from sale of property and equipment
|
|
—
|
|
|
—
|
|
|
3
|
|
|
—
|
|
|
—
|
|
|
3
|
|
||||||
Acquisition of Care Pharmaceuticals, less cash acquired
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(55,215
|
)
|
|
—
|
|
|
(55,215
|
)
|
||||||
Intercompany activity, net
|
|
—
|
|
|
(55,215
|
)
|
|
—
|
|
|
55,215
|
|
|
—
|
|
|
—
|
|
||||||
Net cash (used in) provided by investing activities
|
|
(2,216
|
)
|
|
(55,215
|
)
|
|
3
|
|
|
(103
|
)
|
|
—
|
|
|
(57,531
|
)
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Financing Activities
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Term loan repayments
|
|
—
|
|
|
(7,500
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(7,500
|
)
|
||||||
Repayments under revolving credit agreement
|
|
—
|
|
|
(35,500
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(35,500
|
)
|
||||||
Borrowings under revolving credit agreement
|
|
—
|
|
|
50,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
50,000
|
|
||||||
Payment of deferred financing costs
|
|
—
|
|
|
(275
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(275
|
)
|
||||||
Proceeds from exercise of stock options
|
|
5,143
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5,143
|
|
||||||
Excess tax benefits from share-based awards
|
|
1,350
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,350
|
|
||||||
Fair value of shares surrendered as payment of tax withholding
|
|
(278
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(278
|
)
|
||||||
Intercompany activity, net
|
|
2,347
|
|
|
36,122
|
|
|
(38,809
|
)
|
|
340
|
|
|
—
|
|
|
—
|
|
||||||
Net cash provided by (used in) financing activities
|
|
8,562
|
|
|
42,847
|
|
|
(38,809
|
)
|
|
340
|
|
|
—
|
|
|
12,940
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Effect of exchange rate changes on cash and cash equivalents
|
|
—
|
|
|
—
|
|
|
—
|
|
|
156
|
|
|
—
|
|
|
156
|
|
||||||
Increase in cash and cash equivalents
|
|
8,947
|
|
|
—
|
|
|
—
|
|
|
2,216
|
|
|
—
|
|
|
11,163
|
|
||||||
Cash and cash equivalents - beginning of period
|
|
14,720
|
|
|
—
|
|
|
—
|
|
|
950
|
|
|
—
|
|
|
15,670
|
|
||||||
Cash and cash equivalents - end of period
|
|
$
|
23,667
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3,166
|
|
|
$
|
—
|
|
|
$
|
26,833
|
|
ITEM 2.
|
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
See also “Cautionary Statement Regarding Forward-Looking Statements” on page
60
of this Quarterly Report on Form 10-Q.
|
(In thousands)
|
September 3, 2014
|
||
|
|
||
Cash acquired
|
$
|
3,507
|
|
Accounts receivable
|
25,784
|
|
|
Inventories
|
23,559
|
|
|
Deferred income tax assets - current
|
860
|
|
|
Prepaids and other current assets
|
1,407
|
|
|
Property, plant and equipment
|
2,308
|
|
|
Goodwill
|
103,255
|
|
|
Intangible Assets
|
724,374
|
|
|
Total assets acquired
|
885,054
|
|
|
|
|
||
Accounts payable
|
16,079
|
|
|
Accrued expenses
|
8,003
|
|
|
Deferred income tax liabilities - long term
|
107,799
|
|
|
Total liabilities assumed
|
131,881
|
|
|
Total purchase price
|
$
|
753,173
|
|
(In thousands, except per share data)
|
|
Six Months Ended September 30, 2014
|
||
Revenues
|
|
$
|
393,140
|
|
Net income
|
|
$
|
37,957
|
|
|
|
|
||
Earnings per share:
|
|
|
||
Basic
|
|
$
|
0.73
|
|
|
|
|
||
Diluted
|
|
$
|
0.72
|
|
(In thousands, except per share data)
|
|
Six Months Ended September 30, 2013
|
||
Revenues
|
|
$
|
389,490
|
|
Net income
|
|
$
|
53,511
|
|
|
|
|
||
Earnings per share:
|
|
|
||
Basic
|
|
$
|
1.04
|
|
|
|
|
||
Diluted
|
|
$
|
1.03
|
|
(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
|
|
|
Three Months Ended September 30,
|
||||||||||||
(In thousands)
|
2014
|
%
|
2013
|
%
|
Increase (Decrease)
|
%
|
|||||||
North American OTC Healthcare
|
|
|
|
|
|
||||||||
Analgesics
|
$
|
29,072
|
|
16.0
|
$
|
29,343
|
|
17.6
|
$
|
(271
|
)
|
(0.9
|
)
|
Cough & Cold
|
24,771
|
|
13.7
|
28,695
|
|
17.2
|
(3,924
|
)
|
(13.7
|
)
|
|||
Women's Health
|
9,119
|
|
5.0
|
501
|
|
0.3
|
8,618
|
|
(*)
|
|
|||
Gastrointestinal
|
20,896
|
|
11.5
|
21,695
|
|
13.0
|
(799
|
)
|
(3.7
|
)
|
|||
Eye & Ear Care
|
21,405
|
|
11.8
|
19,378
|
|
11.6
|
2,027
|
|
10.5
|
|
|||
Dermatologicals
|
17,459
|
|
9.6
|
17,716
|
|
10.6
|
(257
|
)
|
(1.5
|
)
|
|||
Oral Care
|
12,934
|
|
7.1
|
13,028
|
|
7.8
|
(94
|
)
|
(0.7
|
)
|
|||
Other OTC
|
1,922
|
|
1.2
|
1,919
|
|
1.1
|
3
|
|
0.2
|
|
|||
Total North American OTC Healthcare
|
137,578
|
|
75.9
|
132,275
|
|
79.2
|
5,303
|
|
4.0
|
|
|||
|
|
|
|
|
|
|
|||||||
International OTC Healthcare
|
|
|
|
|
|
||||||||
Analgesics
|
792
|
|
0.4
|
698
|
|
0.4
|
94
|
|
13.5
|
|
|||
Cough & Cold
|
5,460
|
|
3.0
|
5,023
|
|
3.0
|
437
|
|
8.7
|
|
|||
Women's Health
|
658
|
|
0.4
|
633
|
|
0.4
|
25
|
|
3.9
|
|
|||
Gastrointestinal
|
5,598
|
|
3.1
|
301
|
|
0.2
|
5,297
|
|
(*)
|
|
|||
Eye & Ear Care
|
4,028
|
|
2.2
|
1,625
|
|
1.0
|
2,403
|
|
147.9
|
|
|||
Dermatologicals
|
687
|
|
0.4
|
605
|
|
0.3
|
82
|
|
13.6
|
|
|||
Oral Care
|
127
|
|
0.1
|
130
|
|
0.1
|
(3
|
)
|
(2.3
|
)
|
|||
Other OTC
|
4
|
|
—
|
—
|
|
—
|
4
|
|
(*)
|
|
|||
Total International OTC Healthcare
|
17,354
|
|
9.6
|
9,015
|
|
5.4
|
8,339
|
|
92.5
|
|
|||
|
|
|
|
|
|
|
|||||||
Total OTC Healthcare
|
154,932
|
|
85.5
|
141,290
|
|
84.6
|
13,642
|
|
9.7
|
|
|||
Household Cleaning
|
26,337
|
|
14.5
|
25,655
|
|
15.4
|
682
|
|
2.7
|
|
|||
Total Consolidated
|
$
|
181,269
|
|
100.0
|
$
|
166,945
|
|
100.0
|
$
|
14,324
|
|
8.6
|
|
|
Three Months Ended September 30,
|
||||||||||||||||
(Amounts in thousands)
|
|
|
|
|
|
|
|
|
Increase (Decrease)
|
||||||||
Cost of Sales
|
2014
|
|
%
|
|
2013
|
|
%
|
|
Amount
|
|
%
|
||||||
North American OTC Healthcare
|
$
|
52,185
|
|
|
37.9
|
|
$
|
50,987
|
|
|
38.5
|
|
$
|
1,198
|
|
|
2.3
|
International OTC Healthcare
|
6,595
|
|
|
38.0
|
|
4,338
|
|
|
48.1
|
|
2,257
|
|
|
52.0
|
|||
Household Cleaning
|
19,947
|
|
|
75.7
|
|
18,398
|
|
|
71.7
|
|
1,549
|
|
|
8.4
|
|||
|
$
|
78,727
|
|
|
43.4
|
|
$
|
73,723
|
|
|
44.2
|
|
$
|
5,004
|
|
|
6.8
|
|
Three Months Ended September 30,
|
|||||||||||||||||
(Amounts in thousands)
|
|
|
|
|
|
|
|
|
Increase (Decrease)
|
|||||||||
Gross Profit
|
2014
|
|
%
|
|
2013
|
|
%
|
|
Amount
|
|
%
|
|||||||
North American OTC Healthcare
|
$
|
85,393
|
|
|
62.1
|
|
$
|
81,288
|
|
|
61.5
|
|
$
|
4,105
|
|
|
5.0
|
|
International OTC Healthcare
|
10,759
|
|
|
62.0
|
|
4,677
|
|
|
51.9
|
|
6,082
|
|
|
130.0
|
|
|||
Household Cleaning
|
6,390
|
|
|
24.3
|
|
7,257
|
|
|
28.3
|
|
(867
|
)
|
|
(11.9
|
)
|
|||
|
$
|
102,542
|
|
|
56.6
|
|
$
|
93,222
|
|
|
55.8
|
|
$
|
9,320
|
|
|
10.0
|
|
|
Three Months Ended September 30,
|
|||||||||||||||||
(Amounts in thousands)
|
|
|
|
|
|
|
|
|
Increase (Decrease)
|
|||||||||
Contribution Margin
|
2014
|
|
%
|
|
2013
|
|
%
|
|
Amount
|
|
%
|
|||||||
North American OTC Healthcare
|
$
|
63,951
|
|
|
46.5
|
|
$
|
58,741
|
|
|
44.4
|
|
$
|
5,210
|
|
|
8.9
|
|
International OTC Healthcare
|
7,724
|
|
|
44.5
|
|
3,231
|
|
|
35.8
|
|
4,493
|
|
|
139.1
|
|
|||
Household Cleaning
|
5,823
|
|
|
22.1
|
|
6,703
|
|
|
26.1
|
|
(880
|
)
|
|
(13.1
|
)
|
|||
|
$
|
77,498
|
|
|
42.8
|
|
$
|
68,675
|
|
|
41.1
|
|
$
|
8,823
|
|
|
12.8
|
|
|
Six Months Ended September 30,
|
||||||||||||
(In thousands)
|
2014
|
%
|
2013
|
%
|
Increase (Decrease)
|
%
|
|||||||
North American OTC Healthcare
|
|
|
|
|
|
||||||||
Analgesics
|
$
|
54,103
|
|
16.5
|
$
|
57,479
|
|
18.6
|
$
|
(3,376
|
)
|
(5.9
|
)
|
Cough & Cold
|
44,814
|
|
13.7
|
49,193
|
|
15.9
|
(4,379
|
)
|
(8.9
|
)
|
|||
Women's Health
|
9,487
|
|
2.9
|
988
|
|
0.3
|
8,499
|
|
(*)
|
|
|||
Gastrointestinal
|
41,534
|
|
12.7
|
43,453
|
|
14.0
|
(1,919
|
)
|
(4.4
|
)
|
|||
Eye & Ear Care
|
42,130
|
|
12.9
|
39,710
|
|
12.8
|
2,420
|
|
6.1
|
|
|||
Dermatologicals
|
29,720
|
|
9.1
|
32,347
|
|
10.5
|
(2,627
|
)
|
(8.1
|
)
|
|||
Oral Care
|
23,121
|
|
7.1
|
24,114
|
|
7.8
|
(993
|
)
|
(4.1
|
)
|
|||
Other OTC
|
3,103
|
|
1.0
|
4,077
|
|
1.3
|
(974
|
)
|
(23.9
|
)
|
|||
Total North American OTC Healthcare
|
248,012
|
|
75.9
|
251,361
|
|
81.2
|
(3,349
|
)
|
(1.3
|
)
|
|||
|
|
|
|
|
|
|
|||||||
International OTC Healthcare
|
|
|
|
|
|
||||||||
Analgesics
|
1,457
|
|
0.4
|
727
|
|
0.2
|
730
|
|
100.4
|
|
|||
Cough & Cold
|
10,259
|
|
3.1
|
6,006
|
|
1.9
|
4,253
|
|
70.8
|
|
|||
Women's Health
|
1,176
|
|
0.4
|
633
|
|
0.2
|
543
|
|
85.8
|
|
|||
Gastrointestinal
|
8,096
|
|
2.5
|
312
|
|
0.1
|
7,784
|
|
(*)
|
|
|||
Eye & Ear Care
|
8,670
|
|
2.6
|
3,885
|
|
1.3
|
4,785
|
|
123.2
|
|
|||
Dermatologicals
|
1,229
|
|
0.4
|
696
|
|
0.2
|
533
|
|
76.6
|
|
|||
Oral Care
|
189
|
|
0.1
|
177
|
|
0.1
|
12
|
|
6.8
|
|
|||
Other OTC
|
4
|
|
—
|
—
|
|
—
|
4
|
|
(*)
|
|
|||
Total International OTC Healthcare
|
31,080
|
|
9.5
|
12,436
|
|
4.0
|
18,644
|
|
149.9
|
|
|||
|
|
|
|
|
|
|
|||||||
Total OTC Healthcare
|
279,092
|
|
85.4
|
263,797
|
|
85.2
|
15,295
|
|
5.8
|
|
|||
Household Cleaning
|
47,879
|
|
14.6
|
45,660
|
|
14.8
|
2,219
|
|
4.9
|
|
|||
Total Consolidated
|
$
|
326,971
|
|
100.0
|
$
|
309,457
|
|
100.0
|
$
|
17,514
|
|
5.7
|
|
|
Six Months Ended September 30,
|
|||||||||||||||||
(Amounts in thousands)
|
|
|
|
|
|
|
|
|
Increase (Decrease)
|
|||||||||
Cost of Sales
|
2014
|
|
%
|
|
2013
|
|
%
|
|
Amount
|
|
%
|
|||||||
North American OTC Healthcare
|
$
|
94,526
|
|
|
38.1
|
|
$
|
94,533
|
|
|
37.6
|
|
$
|
(7
|
)
|
|
—
|
|
International OTC Healthcare
|
11,679
|
|
|
37.6
|
|
5,803
|
|
|
46.7
|
|
5,876
|
|
|
101.3
|
|
|||
Household Cleaning
|
36,358
|
|
|
75.9
|
|
32,875
|
|
|
72.0
|
|
3,483
|
|
|
10.6
|
|
|||
|
$
|
142,563
|
|
|
43.6
|
|
$
|
133,211
|
|
|
43.0
|
|
$
|
9,352
|
|
|
7.0
|
|
|
Six Months Ended September 30,
|
|||||||||||||||||
(Amounts in thousands)
|
|
|
|
|
|
|
|
|
Increase (Decrease)
|
|||||||||
Gross Profit
|
2014
|
|
%
|
|
2013
|
|
%
|
|
Amount
|
|
%
|
|||||||
North American OTC Healthcare
|
$
|
153,486
|
|
|
61.9
|
|
$
|
156,828
|
|
|
62.4
|
|
$
|
(3,342
|
)
|
|
(2.1
|
)
|
International OTC Healthcare
|
19,401
|
|
|
62.4
|
|
6,633
|
|
|
53.3
|
|
12,768
|
|
|
192.5
|
|
|||
Household Cleaning
|
11,521
|
|
|
24.1
|
|
12,785
|
|
|
28.0
|
|
(1,264
|
)
|
|
(9.9
|
)
|
|||
|
$
|
184,408
|
|
|
56.4
|
|
$
|
176,246
|
|
|
57.0
|
|
$
|
8,162
|
|
|
4.6
|
|
|
Six Months Ended September 30,
|
|||||||||||||||||
(Amounts in thousands)
|
|
|
|
|
|
|
|
|
Increase (Decrease)
|
|||||||||
Contribution Margin
|
2014
|
|
%
|
|
2013
|
|
%
|
|
Amount
|
|
%
|
|||||||
North American OTC Healthcare
|
$
|
115,692
|
|
|
46.6
|
|
$
|
116,731
|
|
|
46.4
|
|
$
|
(1,039
|
)
|
|
(0.9
|
)
|
International OTC Healthcare
|
14,026
|
|
|
45.1
|
|
4,923
|
|
|
39.6
|
|
9,103
|
|
|
184.9
|
|
|||
Household Cleaning
|
10,550
|
|
|
22.0
|
|
11,364
|
|
|
24.9
|
|
(814
|
)
|
|
(7.2
|
)
|
|||
|
$
|
140,268
|
|
|
42.9
|
|
$
|
133,018
|
|
|
43.0
|
|
$
|
7,250
|
|
|
5.5
|
|
|
Six Months Ended September 30,
|
||||||
(In thousands)
|
2014
|
|
2013
|
||||
Cash provided by (used in):
|
|
|
|
||||
Operating Activities
|
$
|
57,058
|
|
|
$
|
55,598
|
|
Investing Activities
|
(810,537
|
)
|
|
(57,531
|
)
|
||
Financing Activities
|
747,212
|
|
|
12,940
|
|
•
|
$250.0 million
of 8.125% 2012 Senior Notes due 2020;
|
•
|
$400.0 million
of 5.375% 2013 Senior Notes due 2021;
|
•
|
$262.5 million
of borrowings under the 2012 Term B-1 Loan;
|
•
|
$720.0 million
of borrowings under the 2012 Term B-2 Loan; and
|
•
|
$66.1 million
of borrowings under the 2012 ABL Revolver.
|
•
|
Have a leverage ratio of less than
8.00 to 1.0
for the quarter ended
September 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”)). Our leverage ratio requirement decreases over time to
3.75 to 1.0
for the quarter ending June 30, 2016 and remains level thereafter;
|
•
|
Have an interest coverage ratio of greater than
2.25 to 1.0
for the quarter ended
September 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
3.50 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
September 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
|
$
|
263,411
|
|
|
$
|
23,193
|
|
|
$
|
7,389
|
|
|
$
|
293,993
|
|
|
|
|
|
|
|
|
|
|
|||||||
Intangible assets, net
|
|
|
|
|
|
|
|
|
|||||||
Indefinite-lived:
|
|
|
|
|
|
|
|
|
|||||||
Analgesics
|
341,122
|
|
|
2,356
|
|
|
—
|
|
|
343,478
|
|
||||
Cough & Cold
|
185,453
|
|
|
21,904
|
|
|
—
|
|
|
207,357
|
|
||||
Women's Health
|
532,301
|
|
|
1,920
|
|
|
—
|
|
|
534,221
|
|
||||
Gastrointestinal
|
213,639
|
|
|
69,291
|
|
|
—
|
|
|
282,930
|
|
||||
Eye & Ear Care
|
172,318
|
|
|
—
|
|
|
—
|
|
|
172,318
|
|
||||
Dermatologicals
|
217,227
|
|
|
2,269
|
|
|
—
|
|
|
219,496
|
|
||||
Oral Care
|
61,438
|
|
|
—
|
|
|
—
|
|
|
61,438
|
|
||||
Household Cleaning
|
—
|
|
|
|
|
119,820
|
|
|
119,820
|
|
|||||
Total indefinite-lived intangible assets, net
|
1,723,498
|
|
|
97,740
|
|
|
119,820
|
|
|
1,941,058
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Finite-lived:
|
|
|
|
|
|
|
|
|
|||||||
Analgesics
|
10,442
|
|
|
—
|
|
|
—
|
|
|
10,442
|
|
||||
Cough & Cold
|
34,012
|
|
|
806
|
|
|
—
|
|
|
34,818
|
|
||||
Women's Health
|
39,162
|
|
|
381
|
|
|
—
|
|
|
39,543
|
|
||||
Gastrointestinal
|
21,642
|
|
|
262
|
|
|
—
|
|
|
21,904
|
|
||||
Eye & Ear Care
|
31,072
|
|
|
—
|
|
|
—
|
|
|
31,072
|
|
||||
Dermatologicals
|
27,191
|
|
|
—
|
|
|
—
|
|
|
27,191
|
|
||||
Oral Care
|
16,521
|
|
|
—
|
|
|
—
|
|
|
16,521
|
|
||||
Other OTC
|
16,103
|
|
|
—
|
|
|
—
|
|
|
16,103
|
|
||||
Household Cleaning
|
—
|
|
|
—
|
|
|
25,295
|
|
|
25,295
|
|
||||
Total finite-lived intangible assets, net
|
196,145
|
|
|
1,449
|
|
|
25,295
|
|
|
222,889
|
|
||||
Total intangible assets, net
|
1,919,643
|
|
|
99,189
|
|
|
145,115
|
|
|
2,163,947
|
|
||||
Total goodwill and intangible assets, net
|
$
|
2,183,054
|
|
|
$
|
122,382
|
|
|
$
|
152,504
|
|
|
$
|
2,457,940
|
|
•
|
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, additional store brand competition or other 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 based on adverse operating results;
|
•
|
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.
|
|
|
PRESTIGE BRANDS HOLDINGS, INC.
|
|
|
|
|
|
|
|
|
|
|
|
|
Date:
|
November 6, 2014
|
By:
|
/s/ RONALD M. LOMBARDI
|
|
|
|
|
Ronald M. Lombardi
|
|
|
|
|
Chief Financial Officer
|
|
|
|
|
(Principal Financial Officer and
|
|
|
|
|
Duly Authorized Officer)
|
|
|
|
|
|
10.1
|
|
|
Executive Employment Agreement, dated as of August 11, 2014, by and between Prestige Brands Holdings, Inc. and Thomas Hochuli.
|
|
|
|
|
10.2
|
|
|
Second Amendment to Lease between RA 660 White Plains Road LLC and Prestige Brands, Inc.
|
|
|
|
|
10.3
|
|
|
Amendment No. 2, dated as of September 3, 2014, to the Term Loan Credit Agreement (as amended by Amendment No. 1, dated as of February 21, 2013), dated as of January 31, 2012, among Prestige Brands Holdings, Inc., Prestige Brands, Inc., the other Guarantors from time to time party thereto, the lenders from time to time party thereto and Citibank, N.A. as administrative agent (filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on September 3, 2014, and incorporated herein by reference).
|
|
|
|
|
10.4
|
|
|
Amendment No. 3, dated as of September 3, 2014, to the ABL Credit Agreement (as amended by that certain Incremental Amendment, dated as of September 12, 2012, and that certain Incremental Amendment, dated as of June 11, 2013), dated as of January 31, 2012, among Prestige Brands Holdings, Inc., Prestige Brands, Inc., the other Guarantors from time to time party thereto, the lenders from time to time party thereto and Citibank, N.A. as administrative agent, L/C issuer and swing line lender (filed as Exhibit 10.2 to the Company’s Current Report on Form 8-K filed with the SEC on September 3, 2014, and incorporated herein by reference).
|
|
|
|
|
31.1
|
|
|
Certification of Principal Executive Officer of Prestige Brands Holdings, Inc. pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934.
|
|
|
|
|
31.2
|
|
|
Certification of Principal Financial Officer of Prestige Brands Holdings, Inc. pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934.
|
|
|
|
|
32.1
|
|
|
Certification of Principal Executive Officer of Prestige Brands Holdings, Inc. pursuant to Rule 13a-14(b) and Section 1350 of Chapter 63 of Title 18 of the United States Code.
|
|
|
|
|
32.2
|
|
|
Certification of Principal Financial Officer of Prestige Brands Holdings, Inc. pursuant to Rule 13a-14(b) and Section 1350 of Chapter 63 of Title 18 of the United States Code.
|
|
|
|
|
101.INS*
|
|
XBRL Instance Document
|
|
101.SCH*
|
|
XBRL Taxonomy Extension Schema Document
|
|
101.CAL*
|
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
|
101.DEF*
|
|
XBRL Taxonomy Extension Definition Linkbase Document
|
|
101.LAB*
|
|
XBRL Taxonomy Extension Label Linkbase Document
|
|
101.PRE*
|
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
* 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.
|
1.
|
Employment
. Prestige Brands Holdings, Inc. (“Employer”) agrees to employ Thomas Hochuli (“Executive”) and Executive accepts such employment for the period beginning as of August 11, 2014 and ending upon his termination pursuant to Section 1(c) hereof (the “Employment Period”), subject only to the approval of the Prestige Brands Holdings, Inc. Board of Directors (the “Board”).
|
(i)
|
To Employer:
|
Prestige Brands Holdings, Inc.
|
|
|
660 White Plains Road
|
|
|
Tarrytown, New York 10591
|
|
|
Attention: Chief Executive Officer
|
(ii)
|
With a copy to:
|
Prestige Brands Holdings, Inc.
|
|
|
660 White Plains Road
|
|
|
Tarrytown, New York 10591
|
|
|
Attention: General Counsel
|
(iii)
|
To the Employee:
|
Thomas Hochuli
|
|
|
5808 Emily Drive
|
|
|
Doylestown, PA 18902
|
(i)
|
The parties shall first use their reasonable best efforts to discuss and negotiate a resolution of the dispute.
|
(ii)
|
If efforts to negotiate a resolution do not succeed within 5 business days after a written request for negotiation has been made, the dispute shall be resolved timely and exclusively by final and binding arbitration in New York County or Westchester County, New York pursuant to the American Arbitration Association (“AAA”) National Rules for the Resolution of Employment Disputes (the “AAA Rules”). Arbitration must be demanded within ten (10) calendar days after the expiration of the five (5) day period referred to above. The arbitration opinion and award shall be final and binding on the Employer and the Executive and shall be enforceable by any court sitting within New York County or Westchester County, New York. Employer and Executive shall share equally all costs of arbitration excepting their own attorney’s fees unless and to the extent ordered by the arbitrator(s) to pay the attorneys’ fees of the prevailing party.
|
(iii)
|
The parties recognize that this Section 4(i) means that certain claims will be reviewed and decided only before an impartial arbitrator or panel of arbitrators instead of before a court of law and/or a jury, but desire the many benefits of the arbitration process over court proceedings, including speed of resolution, lower costs and fees, and more flexible rules of evidence. The arbitration or arbitrators duly selected pursuant to the AAA’s Rules shall have the same power and authority to order any remedy for violation of a statute, regulation, or ordinance as a court would have; and shall have the same power to order discovery as a federal district court has under the Federal Rules of Civil Procedure.
|
(b)
|
The provisions of this Section 4(i) shall not apply to any action by the Employer seeking to enforce its rights arising out of or related to the provisions of Sections 2 and 3 of this Agreement.
|
(c)
|
This Section 4(i) is intended by the Employer and the Executive to be enforceable under the Federal Arbitration Act (“FAA”). Should it be determined by any court that the FAA does not apply, then this Section 4(i) shall be enforceable under the applicable arbitration statutes of the State of Delaware.
|
(i)
|
the Executive continues to provide services as an employee of the Employer at an annual rate that is twenty percent (20%) or more of the services rendered, on average, during the immediately preceding three full calendar years of employment (or, if employed less than three years, such lesser period) and the annual remuneration for such services is twenty percent (20%) or more of the average annual remuneration earned during the final three full calendar years of employment (or, if less, such lesser period), or
|
(ii)
|
the Executive continues to provide services to the Employer in a capacity other than as an employee of the Employer at an annual rate that is fifty percent (50%) or more of the services rendered, on average, during the immediately preceding three full calendar years of employment (or if employed less than three years, such lesser period) and the annual remuneration for such services is fifty percent (50%) or more of the average annual remuneration earned during the final three full calendar years of employment (or if less, such lesser period).
|
(i)
|
a material diminution in the Executive’s base salary as in effect on the date hereof or as the same may be increased from time to time;
|
(ii)
|
a material diminution in the Executive’s authority, duties, or responsibilities;
|
(iii)
|
the relocation of the Employer’s headquarters outside a thirty-mile radius of Tarrytown, New York or the Employer’s requiring the Executive to be based at any place other than a location within a thirty-mile radius of Tarrytown, New York, except for reasonably required travel on the Employer’s business; or
|
(iv)
|
any other action or inaction that constitutes a material breach by the Employer of this Agreement.
|
Re:
|
First Amendment to Lease, made as of June 30, 2014 (the “First Amendment”), between RA 660 White Plains Road LLC (“Landlord”) and Prestige Brands, Inc. (“Tenant”) for the Lease of certain Demised Premises in the Building located at 660 White Plains Road, Tarrytown, New York
|
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:
|
November 6, 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:
|
November 6, 2014
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/s/ Ronald M. Lombardi
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Ronald M. Lombardi
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Chief Financial Officer
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(Principal Financial Officer)
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/s/ Matthew M. Mannelly
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Name: Matthew M. Mannelly
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Title: Chief Executive Officer
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(Principal Executive Officer)
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Date: November 6, 2014
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/s/ Ronald M. Lombardi
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Name: Ronald M. Lombardi
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Title: Chief Financial Officer
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(Principal Financial Officer)
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Date: November 6, 2014
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