pressrelease.htm

The Company reported revenues of $80.4 million for the quarter ended March 31, 2008, a 3% increase over the comparable quarter of the prior fiscal year when the Company reported revenues of $78.0 million. The quarter’s revenue increase was driven by sales increases in the Company’s over-the-counter healthcare and household products segments.

Operating income of $24.8 million for the fourth fiscal quarter was 10% above the prior year comparable quarter’s $22.6 million. The improvement in operating income was primarily due to an increase in gross profit resulting from higher revenues, a reduction in obsolescence costs, and a slight reduction in general and administrative expenses.

was due to the growth of several businesses in this segment, most notably Murine™ Earigate®, which has led the overall Murine brand to the #1 position in the OTC ear care category, according to independent audit surveys. Clear Eyes® eye care products enjoyed double digit growth, as a result of the introduction of Clear Eyes Maximum Redness and several new 1-ounce sizes of Clear Eyes most popular products. Chloraseptic® sore throat treatments also contributed to fourth quarter results due to increased demand as the cold/flu season modestly rebounded in February and March.

The household cleaning products segment reported net revenues of $29.7 million, 2% greater than the comparable period’s results of $29.0 million. The segment’s newest product, Comet® SprayGel Mildew Stain Remover, contributed to this growth as a result of higher levels of distribution over the prior year comparable quarter. These gains were partially offset by decreases in the Spic and Span® and Chore Boy® lines.

The Company’s free cash flow for the fourth quarter ended March 31, 2008 was $9.6 million, composed of operating cash flow of $9.7 million less capital expenditures of $0.1 million, a 42% decrease over free cash flow of $16.5 million, composed of operating cash flow of $16.6 million less capital expenditures of $0.1 million generated in the fourth quarter ended March 31, 2007. The decrease in free cash flow for the quarter is primarily related to an increase in accounts receivable. For fiscal year 2008, free cash flow totaled $44.5 million, composed of operating cash flow of $45.0 million less capital expenditures of $0.5 million.

According to Mark Pettie, Chairman and CEO, “We are generally pleased with the results of the quarter and the fiscal year, and believe we are on the road to sustainable organic growth. Importantly, during fiscal 2008, we identified the strategic changes necessary to deliver this growth and are well down the road to implementing them as we head into fiscal 2009. The key elements of disciplined portfolio management, breakthrough innovation, international growth, and improved organizational effectiveness set the stage for what we anticipate will be improved organic growth performance in the new fiscal year and beyond.”

The Company will host a conference call today at 8:30 a.m. EDT. To access the call, listeners calling from within North America may dial 866-271-6130 at least 15 minutes prior to the call. To access the call from outside North America, callers should dial 617-213-8894. The conference pass code is “prestige”. The Company will provide a live internet webcast as well as an archived replay which can be accessed from the Investor Relations page of http://www.prestigebrandsinc.com.

Located in Irvington, New York, Prestige Brands Holdings, Inc. is a marketer and distributor of brand name over-the-counter healthcare, personal care, and household products sold throughout the U.S., Canada, and certain international markets. Key brands include Compound W® wart remover, Chloraseptic® sore throat treatment, New-Skin® liquid bandage, Clear Eyes® eye care and Murine® eye and ear care products, Little Remedies® pediatric over-the-counter products, Cutex® nail polish remover, Comet® and Spic and Span® household products, and other well-known brands.

Note: This news release contains “forward-looking statements” within the meaning of the federal securities laws and is 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 “assumptions,” “target,” “guidance,” “outlook,” “plans,” “projection,” “may,” “would,” “expect,” “intend,” “estimate,” “anticipate,” “believe,” “potential,” 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 outlook for Prestige Brands Holdings’ market and the demand for its products, earnings per share, future cash flows from operations, future revenues and margin requirements and expansion, the success of new product introductions, growth in costs and expenses, and the impact of acquisitions, divestitures, restructurings and other unusual items, including Prestige Brands Holdings’ ability to integrate and obtain the anticipated results and synergies from its acquisitions. These projections and 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 projected as a result of certain factors. A discussion of factors that could cause results to vary is included in the Company’s Annual Report on Form 10-K and periodic and other reports filed with the Securities and Exchange Commission.

	Three Months Ended March 31
(In thousands, except per share data)	2008			2007
Revenues
Net sales	$	80,096		$	77,683
Other revenues		337			353
Total revenues		80,433			78,036

Cost of Sales
Cost of sales		39,221			38,797
Gross profit		41,212			39,239

Operating Expenses
Advertising and promotion		6,290			6,196
General and administrative		7,375			7,655
Depreciation and amortization		2,754			2,755
Total operating expenses		16,419			16,606

Operating income		24,793			22,633

Other (income) expense
Interest income		(151	)		(185	)
Interest expense		8,936			10,000
Miscellaneous		(187	)		--
Total other (income) expense		8,598			9,815

Income before income taxes		16,195			12,818

Provision for income taxes		5,844			4,423
Net income	$	10,351		$	8,395

Basic earnings per share	$	0.21		$	0.17
Diluted earnings per share	$	0.21		$	0.17

Weighted average shares outstanding: Basic		49,842			49,607
Diluted		50,037			50,027

	Year Ended March 31
(In thousands, except per share data)	2008			2007			2006
Revenues
Net sales	$	324,621		$	316,847		$	296,239
Other revenues		1,982			1,787			429
Total revenues		326,603			318,634			296,668

Cost of Sales
Cost of sales		158,096			153,147			139,430
Gross profit		168,507			165,487			157,238

Operating Expenses
Advertising and promotion		34,665			32,005			32,082
General and administrative		31,414			28,416			21,158
Depreciation and amortization		11,014			10,384			10,777
Impairment of goodwill		--			--			1,892
Impairment of intangible asset		--			--			7,425
Total operating expenses		77,093			70,805			73,334

Operating income		91,414			94,682			83,904

Other (income) expense
Interest income		(675	)		(972	)		(568	)
Interest expense		38,068			40,478			36,914
Miscellaneous		(187	)		--			--
Total other (income) expense		37,206			39,506			36,346

Income before income taxes		54,208			55,176			47,558

Provision for income taxes		20,289			19,098			21,281
Net income	$	33,919			36,078			26,277

Basic earnings per share	$	0.68		$	0.73		$	0.54
Diluted earnings per share	$	0.68		$	0.72		$	0.53

Weighted average shares outstanding: Basic		49,751			49,460			48,908
Diluted		50,039			50,020			50,008

(In thousands)	March 31
Assets	2008			2007
Current assets
Cash and cash equivalents	$	6,078		$	13,758
Accounts receivable		44,219			35,167
Inventories		29,696			30,173
Deferred income tax assets		3,066			2,735
Prepaid expenses and other current assets		2,316			1,935
Total current assets		85,375			83,768

Property and equipment		1,433			1,449
Goodwill		308,915			310,947
Intangible assets		646,683			657,157
Other long-term assets		6,750			10,095

Total Assets	$	1,049,156		$	1,063,416

Liabilities and Stockholders’ Equity
Current liabilities
Accounts payable	$	20,539		$	19,303
Accrued interest payable		5,772			7,552
Other accrued liabilities		8,030			10,505
Current portion of long-term debt		3,550			3,550
Total current liabilities		37,891			40,910

Long-term debt		407,675			459,800
Other long-term liabilities		2,377			2,801
Deferred income tax liabilities		122,140			114,571

Total Liabilities		570,083			618,082

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 – 50,060 shares at March 31, 2008 and 2007		501			501
Additional paid-in capital		380,364			379,225
Treasury stock, at cost – 59 shares and 55 shares at March 31, 2008 and 2007, respectively		(47	)		(40	)
Accumulated other comprehensive income		(999	)		313
Retained earnings		99,254			65,335
Total stockholders’ equity		479,073			445,334

Total Liabilities and Stockholders’ Equity	$	1,049,156		$	1,063,416

	Year Ended March 31
	2008			2007			2006
(In thousands)
Operating Activities
Net income	$	33,919		$	36,078		$	26,277
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		11,014			10,384			10,777
Amortization of financing costs		3,007			3,257			2,649
Impairment of goodwill and intangible assets		--			--			9,317
Deferred income taxes		10,096			9,662			14,976
Stock-based compensation costs		1,139			655			383
Changes in operating assets and liabilities, net of effects of purchases of businesses
Accounts receivable		(9,052	)		4,875			(1,350	)
Inventories		477			4,292			(7,156	)
Prepaid expenses and other assets		(381	)		(1,235	)		2,623
Accounts payable		(975	)		(186	)		(6,037	)
Income taxes payable		--			(1,795	)		1,795
Other accrued liabilities		(4,255	)		5,912			(393	)
Net cash provided by operating activities		44,989			71,899			53,861

Investing Activities
Purchases of equipment		(488	)		(540	)		(519	)
Purchases of intangible assets		(33	)		--			(22,655	)
Change in other assets due to purchase price adjustments		(16	)		750			--
Purchases of businesses, net		--			(31,261	)		(30,989	)
Net cash used for investing activities		(537	)		(31,051	)		(54,163	)

Financing Activities
Proceeds from the issuance of notes		--			--			30,000
Payment of deferred financing costs		--			--			(13	)
Repayment of notes		(52,125	)		(35,280	)		(26,730	)
Proceeds from the issuance of equity, net		--			--			(63	)
Redemption of equity interests		(7	)		(10	)		(26	)
Net cash provided by (used for) financing activities		(52,132	)		(35,290	)		3,168

Increase (decrease) in cash		(7,680	)		5,558			2,866
Cash - beginning of year		13,758			8,200			5,334

Cash - end of year	$	6,078		$	13,758		$	8,200

	Three Months Ended March 31, 2008
	Over-the- Counter		Household		Personal
(In Thousands)	Healthcare		Cleaning		Care		Consolidated

Net sales	$	46,197	$	29,386	$	4,513	$	80,096
Other revenues		--		337		--		337

Total revenues		46,197		29,723		4,513		80,433
Cost of sales		17,276		19,147		2,798		39,221

Gross profit		28,921		10,576		1,715		41,212
Advertising and promotion		5,108		1,009		173		6,290

Contribution margin	$	23,813	$	9,567	$	1,542		34,922
Other operating expenses								10,129

Operating income								24,793
Other expenses								8,598
Provision for income taxes								5,844

Net income							$	10,351

	Three Months Ended March 31, 2007
	Over-the- Counter		Household		Personal
(In Thousands)	Healthcare		Cleaning		Care		Consolidated

Net sales	$	43,277	$	28,624	$	5,782	$	77,683
Other revenues		--		353		--		353

Total revenues		43,277		28,977		5,782		78,036
Cost of sales		17,403		18,120		3,274		38,797

Gross profit		25,874		10,857		2,508		39,239
Advertising and promotion		4,628		1,375		193		6,196

Contribution margin	$	21,246	$	9,482	$	2,315		33,043
Other operating expenses								10,410

Operating income								22,633
Other expenses								9,815
Provision for income taxes								4,423

Net income							$	8,395

	Year Ended March 31, 2008
	Over-the- Counter		Household		Personal
(In Thousands)	Healthcare		Cleaning		Care		Consolidated

Net sales	$	183,641	$	119,224	$	21,756	$	324,621
Other revenues		51		1,903		28		1,982

Total revenues		183,692		121,127		21,784		326,603
Cost of sales		69,344		75,459		13,293		158,096

Gross profit		114,348		45,668		8,491		168,507
Advertising and promotion		26,188		7,483		994		34,665

Contribution margin	$	88,160	$	38,185	$	7,497		133,842
Other operating expenses								42,428

Operating income								91,414
Other expenses								37,206
Provision for income taxes								20,289

Net income							$	33,919

	Year Ended March 31, 2007
	Over-the- Counter		Household		Personal
(In Thousands)	Healthcare		Cleaning		Care		Consolidated

Net sales	$	174,704	$	117,249	$	24,894	$	316,847
Other revenues		--		1,787		--		1,787

Total revenues		174,704		119,036		24,894		318,634
Cost of sales		65,601		73,002		14,544		153,147

Gross profit		109,103		46,034		10,350		165,487
Advertising and promotion		24,201		6,679		1,125		32,005

Contribution margin	$	84,902	$	39,355	$	9,225		133,482
Other operating expenses								38,800

Operating income								94,682
Other expenses								39,506
Provision for income taxes								19,098

Net income							$	36,078

	Year Ended March 31, 2006
	Over-the- Counter		Household		Personal
(In Thousands)	Healthcare		Cleaning		Care		Consolidated

Net sales	$	160,942	$	107,372	$	27,925	$	296,239
Other revenues		--		429		--		429

Total revenues		160,942		107,801		27,925		296,668
Cost of sales		58,491		65,088		15,851		139,430

Gross profit		102,451		42,713		12,074		157,238
Advertising and promotion		22,424		6,495		3,163		32,082

Contribution margin	$	80,027	$	36,218	$	8,911		125,156
Other operating expenses								41,252

Operating income								83,904
Other expenses								36,346
Provision for income taxes								21,281

Net income							$	26,277