EX-99 2 ex99.htm EXHIBIT 99 Exhibit 99
Holdings Inc.
NYSE:  PBH
 
 
 
 
Welcome

Forward Looking Statement
Statements in this presentation which are not historical facts,
including, without limitation, reporting financial guidance
for fiscal 2006 and fiscal 2007, are forward-looking statements within
the meaning of the Securities Litigation Reform Act of 1995. 
These forward-looking statements involve risks, uncertainties and
assumptions that could cause actual outcomes and results to differ
materially from those stated or projected.
 
 
 
Business Overview
Operating Model
Financial Performance
Growth Opportunities
3
•
Competes in OTC, household and personal care segments
•
Uniquely strong and diversified brand portfolio with many brands having #1 or #2 market positions
•
Focus on smaller, less competitive “niche” categories and segments
•
Marketing and sales driven with particular focus on line and brand extensions
•
USA and Canada Concentration
•
Ability to make strategic acquisitions each year
•
Lean organization with emphasis on experience
•
Focus on core competencies; marketing, product development and customer relationships
•
Outsourced manufacturing, distribution and R&D
•
High margins with virtually no Capex
•
Organic growth of 5.5% annually since Fiscal 2002
•
EBITDA margin of over 35%, with high conversion to cash flow
•
15-year amortization tax shield reduces cash taxes by approximately $9 million per year
•
Free-cash-per-share higher than EPS
•
Organic growth driven by product innovation and line/category extensions
•
Extensions of brands internationally via new distribution and licensing
•
Robust pipeline of acquisitions
Operating
Model
Business
Overview
Financial
Performance
Growth
Opportunities
Company Overview
 
 
 
Business Overview
Operating Model
Financial Performance
Growth Opportunities
4
(1)
Rankings based on brand’s primary category
(2)
Based on IRI Dollar sales, adjusted for Wal-Mart and Dollar/club store sales
OTC
PC
Household
Copper
Scrubber
Our Strong Portfolio of Brands
 
 
 
Business Overview
Operating Model
Financial Performance
Growth Opportunities
5
Latest 12 Months Net Sales: $294mm
(a)
Other brands include: Cutex, Denorex, Prell, Oxipor, Cloverine, Kerodex, Heet, Momentum, Percogesic, Outgro, Freezone, Mosco, Compoz, EZO, Zincon, and Private Label.
    Note:   Brand %’s are pro forma assuming full year sales of Chore Boy and The Doctor’s.  Segment %’s are
               based on reported sales.
Diversified Sales
 
 
 
Business Overview
Operating Model
Financial Performance
Growth Opportunities
6
Sales By Channel, Nine Months Ended 12/31/05
Top 10 Customers
Focus on Fastest Growing Channels
and Customers
 
 
 
Business Overview
Operating Model
Financial Performance
Growth Opportunities
7
Year
Brand Acquired
Revenue at Acquisition
1999
 
$8.0
2000
  
$40.0
2001
  
$25.0
2001
  
$85.0
2002
  
$51.0
2002
  
$15.0
2004
  
$17.0
2005
  
$14.0
2005
  
$13.0
($ in millions)
Proven Ability to Acquire
 
 
 
Business Overview
Operating Model
Financial Performance
Growth Opportunities
8
Core Brand
Extension
 
Freeze Off, Invisible Strips
 
Strips, Pocket Pal
 
Clear Eyes Dry Eyes, Triple Action
 
Redness, Homeopathic (eye & ear)
 
Twister, Essential Care Pads
 
Scar Therapy
 
Comet Cream, Lavender Powder
 
Sprays, Lavender
 
Colic
 
Poison Ivy Treatment
Proven Ability to Grow by Brand Extension
 
 
 
Business Overview
Operating Model
Financial Performance
Growth Opportunities
9
Brand Investment as % of Net Sales (1)
LTM 12/31/05 Marketing Spend
(1)
Reported net sales for the twelve months ending 3/31/05 and 12/31/2005.
Investment in Brand Equity
 
 
 
Business Overview
Operating Model
Financial Performance
Growth Opportunities
10
Unique Operating Model
•   Hands-on senior management with 25+ years experience per manager; middle
       management also deeply experienced
•   Manufacturing done by large, experienced 3rd parties – P&G, Abbott, Amway, Vijon,
       Humco.
§
Competitive industry insures cost efficiency and backup
§
Cost variable with sales
•   Distribution done by 3rd party at dedicated facility
§
Also variable with sales
•   R&D done by current and prospective contract manufacturer
§
Usually on “spec” as new business effort
§
Focused and directed by Prestige Management
•   Established platform enables efficient integration of acquisitions with minimal
       incremental cost
§
Reduces total G&A as % of sales
§
Sales brokerage efficiency
 
 
 
Business Overview
Operating Model
Financial Performance
Growth Opportunities
11
Industry Leading Margins and
Capital Efficiency
Note: Prestige as of 12/31/05 and pro forma EBITDA and Free Cash Flow.
All other companies are as per most recent annual report filings.
 
 
 
Business Overview
Operating Model
Financial Performance
Growth Opportunities
12
(1)  Assumes acquisitions of Medtech and Denorex (predecessor companies), Bonita Bay and
      Spic and Span occurred as of 4/1/2001.  Bonita Bay and Spic and Span net  sales represent
      previous calendar year results for FY02 through FY03.
Pro forma Results Through December 2005
Net Sales  (1)
($ in millions)
Strong and Consistent Historical
Top Line Growth
 
 
 
Business Overview
Operating Model
Financial Performance
Growth Opportunities
13
($ in millions)
8%
11%
-1%
4%
Net Sales (1)
(1)  Assumes acquisitions of Medtech and Denorex (predecessor companies), Bonita Bay and
      Spic and Span occurred as of 4/1/2001.  Bonita Bay and Spic and Span net  sales represent
      previous calendar year results for FY02 through FY03.
Pro forma Results Through December 2005
Strong Organic Growth
 
 
 
Business Overview
Operating Model
Financial Performance
Growth Opportunities
14
Capitalization
Flexible Capital Structure
 
 
 
Business Overview
Operating Model
Financial Performance
Growth Opportunities
15
•
Asset acquisitions created $529.5mm deductible tax asset
§
Amortizable over 15 years
PF LTM 12/05
                       $   36.6                                               Book Pre-Tax Income
                            15.6                                               Book Provision for Income Taxes
                            20.9                                               Book Net Income
                            30.1                     
                            +9.2                                               Cash Tax Shield from Incremental Tax Amortization
                         “Cash Net Income”
Cash Taxes Substantially Below Book Taxes
 
 
 
Business Overview
Operating Model
Financial Performance
Growth Opportunities
16
FY 2005
TTM
12/31/2005
($ in millions)
Cash Flows Higher Than Basic Net Income
 
 
 
Business Overview
Operating Model
Financial Performance
Growth Opportunities
17
Current Examples
Comet Cream
Murine
Homeopathic
Compound W
Foot Care Kit
Little Remedies
Colic + New Kit
Organic Growth Driven by
Product Innovation
 
 
 
Business Overview
Operating Model
Financial Performance
Growth Opportunities
18
Canada
Other International
•
New items in existing geography
•
New geographies
•
Licensing
International
 
 
 
Business Overview
Operating Model
Financial Performance
Growth Opportunities
19
 Existing Market                                  
    New Market
USA,
Canada
Venezuela
Central
America
South Africa
Australia
Malaysia
Saudi Arabia
Lebanon
United
Kingdom
Mexico
Singapore
Central
Eastern
Europe and
Middle East
and Africa
New Geographies
 
 
 
Business Overview
Operating Model
Financial Performance
Growth Opportunities
20
Acquisition Criteria
•   OTC or household categories – bias towards OTC
•   Must be growable
•   Accretive in year 1
•   National distribution
•   Consumer awareness
•   Revenues $15m -$100m
•   Valuation based on pro-forma trailing numbers
§
Pro-forma reflects synergies, proper A&P levels, etc
 
 
 
Business Overview
Operating Model
Financial Performance
Growth Opportunities
21
Business Model and Outlook
•   Long Term Business Outlook
§
Continued organic revenue growth from:
•
Market share gains
•
Line extension and new category expansion
•
Geographic expansion
§
Modest operating margin improvement
§
De-leveraging
§
Strategic Acquisitions
 
 
 
Business Overview
Operating Model
Financial Performance
Growth Opportunities
22
What Does This Mean for the March 2006 Quarter?
•   We expect to post a mid-single digit revenue increase
     with both net income and EPS growing more rapidly
•   We expect free cash flow higher than reported net book
     income
 
 
 
Business Overview
Operating Model
Financial Performance
Growth Opportunities
23
Looking Ahead to FY ’07
•   We expect total revenues to grow in the high single
     digits, with organic growth contributing to that overall
     performance
•   We expect net income growth in excess of revenue
     growth as a result of deleveraging and modest operating
     profit margin improvement
•   We expect FCF to be better than reported net income
•   We expect acquisitions will be incremental to that outlook
•   In short, we expect a better and more stable year
 
 
 
Holdings Inc.
NYSE:  PBH
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