• Prestige Consumer Healthcare Inc. Reports Fiscal 2021 Fourth Quarter and Record Full-Year Results

    Источник: Nasdaq GlobeNewswire / 06 май 2021 06:00:01   America/New_York

    • Company Exceeds Full Year 2021 Guidance for Revenue, Adjusted EPS and Free Cash Flow
    • Revenue was $237.8 Million in Q4 and $943.4 in Full-Year Fiscal 2021
    • Record Diluted EPS of $3.25 for Full-Year Fiscal 2021
    • Net Cash Provided by Operating Activities for Fiscal 2021 of $235.6 million and Record Adjusted Free Cash Flow of $213.4 Million in Full-Year Fiscal 2021
    • Provides Full-Year Fiscal 2022 Outlook for Revenue and Earnings Per Share of $957 to $962 Million and $3.58 or More, Respectively

    TARRYTOWN, N.Y., May 06, 2021 (GLOBE NEWSWIRE) -- Prestige Consumer Healthcare Inc. (NYSE:PBH) today reported financial results for its fourth quarter and fiscal year ended March 31, 2021.

    “We exceeded full year 2021 guidance by generating solid earnings and cash flow growth along with market share gains. This performance is a testament to our proven business strategy and the benefits of our leading and diverse portfolio of brands, especially against the backdrop of the unique pandemic business environment that disrupted several of our categories in fiscal 2021. We expect our business attributes to continue to create value in the upcoming fiscal year as we anticipate returning to sales growth and continue to leverage our strong free cash flow to execute our capital allocation strategy,” said Ron Lombardi, Chief Executive Officer of Prestige Consumer Healthcare.

    Fourth Fiscal Quarter Ended March 31, 2021

    Reported revenues in the fourth quarter of fiscal 2021 decreased 5.4% to $237.8 million versus $251.2 million in the fourth quarter of fiscal 2020. Revenues decreased 6.6% excluding the impact of foreign currency. The revenue performance for the quarter was driven by strong performance across the majority of the Company’s key brands versus their respective categories, but was more than offset by reduced consumption for certain brands where the category has been disrupted by the COVID-19 virus, including the comparison against a sharp rise in consumption during the fourth quarter fiscal 2020 as consumers “stocked up” on products as a result of the COVID-19 virus.

    Reported net income for the fourth quarter of fiscal 2021 totaled $35.5 million, compared to the prior year quarter’s net income of $37.0 million. Non-GAAP adjusted net income of $39.9 million in the fourth quarter fiscal 2021 compared to the prior year quarter’s adjusted net income of $41.9 million. Diluted earnings per share of $0.70 for the fourth quarter of fiscal 2021 compared to $0.73 in the prior year comparable period. Non-GAAP adjusted earnings per share were $0.79 per share for fourth quarter fiscal 2021, compared to $0.82 per share in fourth quarter fiscal 2020.

    The adjustment of net income in the fourth quarter fiscal 2021 includes a loss on extinguishment of debt and the related income tax effects. Adjustments to net income in the fourth quarter of fiscal 2020 included costs associated with a new logistics provider and location and the related income tax effects of the adjustment.

    Fiscal Year Ended March 31, 2021

    Reported revenues for fiscal 2021 totaled $943.4 million, a decrease of 2.0%, compared to revenues of $963.0 million in fiscal 2020. The revenue performance for fiscal 2021 was driven by solid consumption across the majority of the Company’s portfolio and a benefit associated with higher retailer order patterns to refill customer’s supply chains, offset by reduced consumption for certain brands where the category has been impacted by the COVID-19 virus.

    Reported net income for fiscal 2021 totaled $164.7 million versus the prior year net income of $142.3 million. Non-GAAP adjusted net income for fiscal 2021 was $164.0 million, versus the prior year adjusted net income of $151.3 million. Diluted earnings per share were $3.25 for fiscal 2021 compared to $2.78 per share in the prior year. Non-GAAP adjusted earnings per share were $3.24 per share for fiscal 2021 compared to $2.96 in the prior fiscal year.

    The adjustments to net income in fiscal 2021 related to the final regulations issued during the second fiscal quarter for certain tax elements imposed under the domestic Tax Cuts and Jobs Act, which resulted in a one-time discrete benefit associated with the utilization of foreign tax credits, as well as a loss on extinguishment of debt and the related income tax effects of the adjustments.

    Adjustments to net income in fiscal 2020 included costs associated with a new logistics provider and location as well as a loss on extinguishment of debt, and the related income tax effects of each adjustment.

    Free Cash Flow and Balance Sheet

    The Company's net cash provided by operating activities for fourth quarter fiscal 2021 was $59.1 million, compared to $56.1 million during the prior year comparable period. Non-GAAP adjusted free cash flow in the fourth quarter of fiscal 2021 was $54.2 million compared to $52.5 million in the prior year. The Company's net cash provided by operating activities for fiscal 2021 was $235.6 million, an increase compared to $217.1 million during the prior year. Non-GAAP adjusted free cash flow in fiscal 2021 was $213.4 million compared to $206.8 million in the prior year. The change in free cash flow versus the prior year was attributable to higher operating income and lower interest costs.

    The Company's net debt position as of March 31, 2021 was approximately $1.5 billion and the Company's covenant-defined leverage ratio was 4.2x. During the fourth quarter the Company reduced debt outstanding by $65 million and repurchased approximately $2 million in stock as authorized in the Company’s share repurchase program. For the full year, the Company repurchased approximately $12 million in stock as authorized in the Company’s share repurchase program. On March 1st, 2021 the Company issued $600 million of new senior notes which replaced the same principal of senior notes previously due in fiscal 2024. The new notes extend the maturity of the amount to April 1, 2031 with over $15 million in annual interest savings.

    Segment Review

    North American OTC Healthcare: Segment revenues of $211.5 million for the fourth quarter of fiscal 2021 compared to the prior year comparable quarter's revenues of $219.8 million. The fourth quarter fiscal 2021 revenue performance was driven by strong performance across a majority of the Company’s key brands versus their respective categories, but was more than offset by reduced consumption for certain brands where the category has been disrupted by the COVID-19 virus and the comparison against a sharp rise in consumption during the year earlier as consumers “stocked up” on products as a result of the COVID-19 virus.

    For fiscal year 2021, reported revenues for the North American OTC Healthcare segment of $849.3 million compared to $859.4 million in the prior fiscal year. The modest decrease in revenue versus the prior year comparable period benefited from an increase in consumption levels for the majority of the Company’s core brand portfolio as well as a benefit in the first quarter 2021 associated with higher retailer order patterns to refill customer’s supply chains, offset primarily by a reduction in consumption for certain brands where the category consumption levels have been impacted by the COVID-19 virus.

    International OTC Healthcare: Segment fiscal fourth quarter 2021 revenues totaled $26.3 million, compared to $31.4 million reported in the prior year comparable period. The revenue decrease versus the prior year related primarily to the comparison against a sharp rise in consumption during the fourth quarter fiscal 2020 as consumers “stocked up” on certain products such as Hydralyte as a result of the COVID-19 virus, partially offset by a foreign currency benefit of approximately $3 million.

    For fiscal year 2021, reported revenues for the International OTC Healthcare segment were $94.0 million versus the prior year revenues of $103.6 million, driven by reduced consumption for certain brands impacted by the COVID-19 virus, such as Hydralyte as well as a foreign currency benefit of approximately $4 million.

    Commentary and Outlook for Fiscal 2022

    Ron Lombardi, Chief Executive Officer, stated, “A year ago, we entered fiscal 2021 with a backdrop of uncertainty prevalent across the economy due to many factors resulting from COVID-19. Our time-tested business attributes and strategy worked to our favor: leading #1 market share brand positions, agile marketing ability, a diversified brand portfolio, and a robust eCommerce strategy, among many others – all helping to generate continued market share gains. This enabled solid fiscal year financial results and we expect to benefit once again from these attributes in fiscal 2022 and beyond.”

    He continued, “In fiscal 2022, we expect organic growth to track in-line with our long-term expectations for our leading brand portfolio, except for certain COVID-disrupted categories, where we anticipate stable performance versus FY21 levels. Meanwhile, we anticipate our solid financial profile to enable cash flow growth in fiscal ’22 and strong low-double-digit earnings growth. This financial outlook will continue to fuel our disciplined capital allocation strategy of continued debt reduction, enabling us to focus on long-term top- and bottom-line growth prospects,” Mr. Lombardi concluded.

    Fiscal 2022 Full-Year Outlook
      
    Revenue$957 to 962 million
    Organic Growth1.5% to 2.0%
    Adjusted E.P.S.$3.58 or more
    Free Cash Flow$225 million or more

    Fiscal Fourth Quarter and Full-Year 2021 Conference Call, Accompanying Slide Presentation and Replay

    The Company will host a conference call to review its fourth quarter and full-year results today, May 6, 2021 at 8:30 a.m. ET. The toll-free dial-in numbers are 844-233-9440 for the U.S. & Canada and 574-990-1016 internationally. The conference ID number is 5996287. The Company provides a live Internet webcast, a slide presentation to accompany the call, as well as an archived replay, all of which can be accessed from the Investor Relations page of the Company's website at www.prestigeconsumerhealthcare.com. The slide presentation can be accessed from the Investor Relations page of the website by clicking on Webcasts and Presentations.

    Telephonic replays will be available for approximately one week following the completion of the call and can be accessed at 855-859-2056 within North America and at 404-537-3406 from outside North America. The conference ID is 5996287.

    Non-GAAP and Other Financial Information

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

    Note Regarding Forward-Looking Statements
    This news release contains "forward-looking statements" within the meaning of the federal securities laws that are intended to qualify for the Safe Harbor from liability established by the Private Securities Litigation Reform Act of 1995. "Forward-looking statements" generally can be identified by the use of forward-looking terminology such as "guidance," "strategy," "outlook," "projection," "may," "will," "would," "expect," "anticipate," "believe”, "enables," or "continue" (or the negative or other derivatives of each of these terms) or similar terminology. The "forward-looking statements" include, without limitation, statements regarding the Company's future operating results including revenues, organic growth, adjusted earnings per share, and free cash flow, the Company’s ability to execute on its capital allocation strategy and reduce debt, and the Company’s ability to create long-term value for stakeholders. These statements are based on management's estimates and assumptions with respect to future events and financial performance and are believed to be reasonable, though are inherently uncertain and difficult to predict. Actual results could differ materially from those expected as a result of a variety of factors, including the impact of the COVID-19 pandemic and business and economic conditions, consumer trends, the impact of the Company’s advertising and promotional and new product development initiatives, customer inventory management initiatives, fluctuating foreign exchange rates, competitive pressures, and the ability of the Company’s third party manufacturers and logistics providers and suppliers to meet demand for its products and to reduce costs. A discussion of other factors that could cause results to vary is included in the Company's Annual Report on Form 10-K for the year ended March 31, 2020 and other periodic reports filed with the Securities and Exchange Commission.

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

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

      Three Months Ended March 31, Year
    Ended March 31,
    (In thousands, except per share data) 2021 2020 2021 2020
    Total Revenues 237,761   251,235   943,365   963,010  
             
    Cost of Sales        
    Cost of sales excluding depreciation 99,047   106,236   389,670   406,554  
    Cost of sales depreciation 1,658   1,089   6,223   4,233  
    Cost of sales 100,705   107,325   395,893   410,787  
    Gross profit 137,056   143,910   547,472   552,223  
             
    Operating Expenses        
    Advertising and marketing 36,417   40,167   140,589   147,194  
    General and administrative 23,823   23,584   85,540   89,112  
    Depreciation and amortization 5,879   6,242   23,941   24,762  
    Total operating expenses 66,119   69,993   250,070   261,068  
    Operating income 70,937   73,917   297,402   291,155  
             
    Other (income) expense        
    Interest expense, net 18,983   22,452   82,328   96,224  
    Loss on extinguishment of debt 12,327   —   12,327   2,155  
    Other (income) expense, net (746)  930   (1,366)  1,625  
    Total other expense, net 30,564   23,382   93,289   100,004  
    Income before income taxes 40,373   50,535   204,113   191,151  
    Provision for income taxes 4,859   13,489   39,431   48,870  
    Net income $35,514   $37,046   $164,682   $142,281  
             
    Earnings per share:        
    Basic $0.71   $0.74   $3.28   $2.81  
    Diluted $0.70   $0.73   $3.25   $2.78  
             
    Weighted average shares outstanding:        
    Basic 50,031   50,367   50,210   50,723  
    Diluted 50,512   50,878   50,605   51,140  
             
    Comprehensive income, net of tax:        
    Currency translation adjustments (2,106)  (12,052)  20,333   (12,363) 
    Unrealized gain (loss) on interest rate swaps 698   (4,864)  3,045   (4,864) 
    Unrecognized net (loss) gain on pension plans (1,162)  (1,187)  1,172   (1,187) 
    Net gain on pension distribution reclassified to net income —   —   (190)  —  
    Total other comprehensive (loss) income (2,570)  (18,103)  24,360   (18,414) 
    Comprehensive income $32,944   $18,943   $189,042   $123,867  


    Prestige Consumer Healthcare Inc.
    Consolidated Balance Sheet
    (Unaudited)

    (In thousands)March 31,
     2021 2020
    Assets   
    Current assets   
    Cash and cash equivalents$32,302   $94,760  
    Accounts receivable, net of allowance of $16,457 and $20,194, respectively114,671   150,517  
    Inventories114,959   116,026  
    Prepaid expenses and other current assets7,903   4,351  
    Total current assets269,835   365,654  
        
    Property, plant and equipment, net70,059   55,988  
    Operating lease right-of-use assets23,722   28,888  
    Finance lease right-of-use assets, net8,986   5,842  
    Goodwill578,079   575,179  
    Intangible assets, net2,475,729   2,479,391  
    Other long-term assets2,863   2,963  
    Total Assets$3,429,273   $3,513,905  
        
    Liabilities and Stockholders' Equity   
    Current liabilities   
    Accounts payable$45,978   $62,375  
    Accrued interest payable6,312   9,911  
    Operating lease liabilities, current portion5,858   5,612  
    Finance lease liabilities, current portion2,588   1,220  
    Other accrued liabilities61,402   70,763  
    Total current liabilities122,138   149,881  
        
    Long-term debt, net1,479,653   1,730,300  
    Deferred income tax liabilities434,050   407,812  
    Long-term operating lease liabilities, net of current portion19,706   24,877  
    Long-term finance lease liabilities, net of current portion6,816   4,626  
    Other long-term liabilities8,612   25,438  
    Total Liabilities2,070,975   2,342,934  
        
    Stockholders' Equity   
    Preferred stock - $0.01 par value   
    Authorized - 5,000 shares   
    Issued and outstanding - None—   —  
    Common stock - $0.01 par value   
    Authorized - 250,000 shares   
    Issued – 53,999 shares at March 31, 2021 and 53,805 shares at March 31, 2020540   538  
    Additional paid-in capital499,508   488,116  
    Treasury stock, at cost – 4,088 shares at March 31, 2021 and 3,719 at March 31, 2020(130,732)  (117,623) 
    Accumulated other comprehensive loss, net of tax(19,801)  (44,161) 
    Retained earnings1,008,783   844,101  
    Total Stockholders' Equity1,358,298   1,170,971  
    Total Liabilities and Stockholders' Equity$3,429,273   $3,513,905  


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

     Year Ended March 31,
    (In thousands)2021 2020
    Operating Activities   
    Net income$164,682   $142,281  
    Adjustments to reconcile net income to net cash provided by operating activities:   
    Depreciation and amortization30,164   28,995  
    Loss on sale or disposal of property and equipment220   713  
    Deferred income taxes18,628   13,852  
    Amortization of debt origination costs4,979   3,812  
    Stock-based compensation costs8,543   7,644  
    Loss on extinguishment of debt12,327   2,155  
    Non-cash operating lease cost7,082   8,786  
    Impairment loss2,434   —  
    Other(7,854)  84  
    Changes in operating assets and liabilities:   
    Accounts receivable36,872   (2,849) 
    Inventories2,972   2,930  
    Prepaid expenses and other current assets(3,227)  687  
    Accounts payable(17,342)  6,210  
    Accrued liabilities(14,912)  12,096  
    Operating lease liabilities(6,718)  (8,824) 
    Other(3,243)  (1,448) 
    Net cash provided by operating activities235,607   217,124  
        
    Investing Activities   
    Purchases of property, plant and equipment(22,243)  (14,560) 
    Escrow receipt—   750  
    Acquisition of tradename—   (2,760) 
    Net cash used in investing activities(22,243)  (16,570) 
        
    Financing Activities   
    Proceeds from issuance of senior notes600,000   400,000  
    Repayment of senior notes(600,000)  (400,000) 
    Term Loan repayments(195,000)  (48,000) 
    Borrowings under revolving credit agreement15,000   100,000  
    Repayments under revolving credit agreement(70,000)  (120,000) 
    Payment of debt costs(17,718)  (6,584) 
    Payments of finance leases(1,443)  (476) 
    Proceeds from exercise of stock options2,851   1,324  
    Fair value of shares surrendered as payment of tax withholding(1,242)  (974) 
    Repurchase of common stock(11,867)  (56,721) 
    Net cash used in financing activities(279,419)  (131,431) 
    Effects of exchange rate changes on cash and cash equivalents3,597   (1,893) 
    (Decrease) increase in cash and cash equivalents(62,458)  67,230  
    Cash and cash equivalents - beginning of year94,760   27,530  
    Cash and cash equivalents - end of year$32,302   $94,760  
    Interest paid$80,290   $92,166  
    Income taxes paid$34,381   $30,602  


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

     Three Months Ended March 31, 2021
    (In thousands)North American OTC
    Healthcare    		 International OTC
    Healthcare    		 Consolidated
    Total segment revenues*$211,468  $26,293  $237,761 
    Cost of sales91,321  9,384  100,705 
    Gross profit120,147  16,909  137,056 
    Advertising and marketing31,304  5,113  36,417 
    Contribution margin$88,843  $11,796  100,639 
    Other operating expenses    29,702 
    Operating income    $70,937 

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

     Year Ended March 31, 2021
    (In thousands)North American OTC
    Healthcare    		 International OTC
    Healthcare    		 Consolidated
    Total segment revenues*$849,319  $94,046  $943,365 
    Cost of sales359,100  36,793  395,893 
    Gross profit490,219  57,253  547,472 
    Advertising and marketing122,857  17,732  140,589 
    Contribution margin$367,362  $39,521  406,883 
    Other operating expenses    109,481 
    Operating income    $297,402 

    *Intersegment revenues of $3.2 million were eliminated from the North American OTC Healthcare segment.

     Three Months Ended March 31, 2020
    (In thousands)North American OTC
    Healthcare    		 International OTC
    Healthcare    		 Consolidated
    Total segment revenues*$219,814  $31,421  $251,235 
    Cost of sales96,454  10,871  107,325 
    Gross profit123,360  20,550  143,910 
    Advertising and marketing33,338  6,829  40,167 
    Contribution margin$90,022  $13,721  103,743 
    Other operating expenses    29,826 
    Operating income    $73,917 

    *Intersegment revenues of $1.4 million were eliminated from the North American OTC Healthcare segment.

     Year Ended March 31, 2020
    (In thousands)North American OTC
    Healthcare    		 International OTC
    Healthcare    		 Consolidated
    Total segment revenues*$859,368  $103,642  $963,010 
    Cost of sales372,133  38,654  410,787 
    Gross profit487,235  64,988  552,223 
    Advertising and marketing127,972  19,222  147,194 
    Contribution margin$359,263  $45,766  405,029 
    Other operating expenses    113,874 
    Operating income    $291,155 

    * Intersegment revenues of $3.5 million were eliminated from the North American OTC Healthcare segment.

    About Non-GAAP Financial Measures

    In addition to financial results reported in accordance with GAAP, we disclose certain Non-GAAP financial measures ("NGFMs"), including, but not limited to, Non-GAAP Organic Revenues, Non-GAAP Organic Revenue Change Percentage, Non-GAAP Adjusted Gross Margin, Non-GAAP Adjusted Gross Margin Percentage, Non-GAAP EBITDA, Non-GAAP EBITDA Margin, Non-GAAP Adjusted EBITDA, Non-GAAP Adjusted EBITDA Margin, Non-GAAP Adjusted Net Income, Non-GAAP Adjusted EPS, Non-GAAP Free Cash Flow, Non-GAAP Adjusted Free Cash Flow and Net Debt. We use these NGFMs internally, along with GAAP information, in evaluating our operating performance and in making financial and operational decisions. We believe that the presentation of these NGFMs provides investors with greater transparency, and provides a more complete understanding of our business than could be obtained absent these disclosures, because the supplemental data relating to our financial condition and results of operations provides additional ways to view our operation when considered with both our GAAP results and the reconciliations below. In addition, we believe that the presentation of each of these NGFMs is useful to investors for period-to-period comparisons of results in assessing shareholder value, and we use these NGFMs internally to evaluate the performance of our personnel and also to evaluate our operating performance and compare our performance to that of our competitors.

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

    NGFMs Defined

    We define our NGFMs presented herein as follows:

    • Non-GAAP Organic Revenues: GAAP Total Revenues excluding impact of foreign currency exchange rates in the periods presented.
    • Non-GAAP Organic Revenue Change Percentage: Calculated as the change in Non-GAAP Organic Revenues from prior year divided by prior year Non-GAAP Organic Revenues.
    • Non-GAAP Adjusted Gross Margin: GAAP Gross Profit minus certain transition and other costs associated with new warehouse.
    • Non-GAAP Adjusted Gross Margin Percentage: Calculated as Non-GAAP Adjusted Gross Margin divided by GAAP Total Revenues.
    • Non-GAAP EBITDA: GAAP Net Income before interest expense, net, income taxes provision, and depreciation and amortization.
    • Non-GAAP EBITDA Margin: Calculated as Non-GAAP EBITDA divided by GAAP Total Revenues.
    • Non-GAAP Adjusted EBITDA: Non-GAAP EBITDA less certain transition and other costs associated with new warehouse, loss on disposal of assets and loss on extinguishment of debt.
    • Non-GAAP Adjusted EBITDA Margin: Calculated as Non-GAAP Adjusted EBITDA divided by GAAP Total Revenues.
    • Non-GAAP Adjusted Net Income: GAAP Net Income before certain transition and other costs associated with new warehouse, loss on disposal of assets, loss on extinguishment of debt, tax impact of adjustments, and normalized tax rate adjustment.
    • Non-GAAP Adjusted EPS: Calculated as Non-GAAP Adjusted Net Income, divided by the weighted average number of common and potential common shares outstanding during the period.
    • Non-GAAP Free Cash Flow: GAAP Net cash provided by operating activities less cash paid for capital expenditures.
    • Non-GAAP Adjusted Free Cash Flow: Non-GAAP Free Cash Flow plus cash payments made for transition and other costs associated with new warehouse.
    • Net Debt: Calculated as total principal amount of debt outstanding ($1,495,000 at March 31, 2021 and $1,745,000 at March 31, 2020) less cash and cash equivalents ($32,302 at March 31, 2021 and $94,760 at March 31, 2020). Amounts in thousands.

    The following tables set forth the reconciliations of each of our NGFMs to their most directly comparable financial measures presented in accordance with GAAP.

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

     Three Months Ended
    March 31,    		 Year Ended
    March 31,
     2021
    		 2020
    		 2021
    		 2020
    (In thousands)       
    GAAP Total Revenues$237,761  $251,235  $943,365  $963,010 
    Revenue Change (5.4)%    (2.0)%  
    Adjustments:          
    Impact of foreign currency exchange rates —   3,404   —   3,796 
    Total adjustments —   3,404   —   3,796 
    Non-GAAP Organic Revenues$237,761  $254,639  $943,365  $966,806 
    Non-GAAP Organic Revenue Change (6.6)%    (2.4)%  


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

     Three Months Ended
    March 31,    		 Year Ended
    March 31,
     2021 2020 2021 2020
    (In thousands)       
    GAAP Total Revenues$237,761  $251,235  $943,365  $963,010 
            
    GAAP Gross Profit$137,056  $143,910  $547,472  $552,223 
    GAAP Gross Profit as a Percentage of GAAP Total Revenue57.6% 57.3% 58.0% 57.3%
    Adjustments:       
    Transition and other costs associated with new warehouse(1)—  5,208  —  9,170 
    Total adjustments—  5,208  —  9,170 
    Non-GAAP Adjusted Gross Margin$137,056  $149,118  $547,472  $561,393 
    Non-GAAP Adjusted Gross Margin as a Percentage of GAAP Total Revenues57.6% 59.4% 58.0% 58.3%

    (1) Items related to new warehouse represent costs to transition to the new warehouse and duplicate costs incurred during the transition.


     

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

     Three Months Ended
    March 31,    		 Year Ended
    March 31,
     2021 2020 2021 2020
    (In thousands)       
    GAAP Net Income$35,514  $37,046  $164,682  $142,281 
    Interest expense, net18,983  22,452  82,328  96,224 
    Provision for income taxes4,859  13,489  39,431  48,870 
    Depreciation and amortization7,537  7,331  30,164  28,995 
    Non-GAAP EBITDA66,893  80,318  316,605  316,370 
    Non-GAAP EBITDA Margin28.1% 32.0% 33.6% 32.9%
    Adjustments:       
    Transition and other costs associated with new warehouse in Cost of Goods Sold(1)—  5,208  —  9,170 
    Loss on disposal of assets—  382  —  382 
    Loss on extinguishment of debt12,327  —  12,327  2,155 
    Total adjustments12,327  5,590  12,327  11,707 
    Non-GAAP Adjusted EBITDA$79,220  $85,908  $328,932  $328,077 
    Non-GAAP Adjusted EBITDA Margin33.3% 34.2% 34.9% 34.1%

    (1) Items related to new warehouse represent costs to transition to the new warehouse and duplicate costs incurred during the transition.


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

     Three Months Ended March 31, Year Ended March 31,
     20212021
    Adjusted
    EPS    		 20202020
    Adjusted
    EPS    		 20212021
    Adjusted
    EPS    		 20202020
    Adjusted
    EPS
    (In thousands, except per share data)           
    GAAP Net Income and Diluted EPS$35,514  $0.70   $37,046  $0.73   $164,682  $3.25   $142,281  $2.78 
    Adjustments:           
    Transition and other costs associated with new warehouse in Cost of Goods Sold(1)—  —   5,208  0.10   —  —   9,170  0.18 
    Loss on disposal of assets—  —   382  0.01   —  —   382  0.01 
    Loss on extinguishment of debt12,327  0.24   —  —   12,327  0.24   2,155  0.04 
    Tax impact of adjustments(2)(2,986) (0.06)  (1,420) (0.03)  (2,986) (0.06)  (2,974) (0.06)
    Normalized tax rate adjustment(3)(4,919) (0.10)  653  0.01   (10,025) (0.20)  318  0.01 
    Total adjustments4,422  0.09   4,823  0.09   (684) (0.01)  9,051  0.18 
    Non-GAAP Adjusted Net Income and Adjusted EPS$39,936  $0.79   $41,869  $0.82   $163,998  $3.24   $151,332  $2.96 

    Note: Amounts may not add due to rounding.
    (1) Items related to new warehouse represent costs to transition to the new warehouse and duplicate costs incurred during the transition.
    (2) The income tax adjustments are determined using applicable rates in the taxing jurisdictions in which the above adjustments relate and includes both current and deferred income tax expense (benefit) based on the specific nature of the specific Non-GAAP performance measure.
    (3) Income tax adjustment to adjust for discrete income tax items.


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

     Three Months Ended
    March 31,    		 Year Ended
    March 31,
     2021 2020 2021 2020
    (In thousands)       
    GAAP Net Income$35,514   $37,046   $164,682   $142,281 
    Adjustments:       
    Adjustments to reconcile net income to net cash provided by operating activities as shown in the Statement of Cash Flows29,904   20,056   76,523   66,041 
    Changes in operating assets and liabilities as shown in the Statement of Cash Flows(6,331)  (976)  (5,598)  8,802 
    Total adjustments23,573   19,080   70,925   74,843 
    GAAP Net cash provided by operating activities59,087   56,126   235,607   217,124 
    Purchases of property and equipment(4,896)  (5,505)  (22,243)  (14,560)
    Non-GAAP Free Cash Flow54,191   50,621   213,364   202,564 
    Transition and other payments associated with new warehouse(1)—   1,876   —   4,203 
    Non-GAAP Adjusted Free Cash Flow$54,191   $52,497   $213,364   $206,767 

    (1) Payments related to new warehouse represent costs to transition to the new warehouse and duplicate costs incurred during the transition.


    Outlook for Fiscal Year 2022:

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

    (In millions) 
    Projected FY'22 GAAP Net cash provided by operating activities$240 
    Additions to property and equipment for cash (15)
    Projected Non-GAAP Free Cash Flow$225 

    Investor Relations Contact

Phil Terpolilli, CFA, 914-524-6819

irinquiries@prestigebrands.com

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